Court over­turns Illinois law on hospi­tals’ tax ex­emp­tions

Modern Healthcare - - LATE NEWS - —Lisa Schencker

An Illinois ap­peals court has ruled that a law defin­ing what not-for-profit hospi­tals have to do to get tax breaks is un­con­sti­tu­tional. The law says that the value of cer­tain char­i­ta­ble and other ser­vices of­fered by a hos­pi­tal must ex­ceed the es­ti­mated value of its prop­erty tax li­a­bil­ity if the hos­pi­tal ex­pects to get a prop­erty- and sales-tax ex­emp­tion. It was passed af­ter the Illinois Supreme Court, in 2010, up­held a de­ci­sion to re­voke Provena Covenant Med­i­cal Cen­ter’s ex­emp­tion. The Ur­bana hos­pi­tal is now part of Pres­ence Health.

The most re­cent case in­volved the city of Ur­bana and other lo­cal tax­ing dis­tricts. Carle Foun­da­tion Hos­pi­tal had been seek­ing re­lief from taxes for 2004 to 2011. A lower court sided with the hos­pi­tal, but the ap­peals court re­versed that de­ci­sion, say­ing the Illinois Con­sti­tu­tion al­lows law­mak­ers to ex­empt only prop­erty “used ex­clu­sively” for “char­i­ta­ble pur­poses.”

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