Reviews of nonprofit hospital tax breaks resume

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The Illinois revenue department has its marching orders to continue its review of hospital property tax exemptions. Gov. Pat Quinn yesterday lifted a moratorium on the state's review of tax exemptions that nonprofit hospitals are seeking for providing charity care.

The move now clears the path for the state Department of Revenue to continue reviewing applications from as many as 18 nonprofit hospitals, the Chicago Tribune reported. If the revenue department determines the nonprofit hospitals are not exempt from property taxes, they could be on the hook for millions of dollars in unpaid taxes that go back several years, the article noted.

Last August, the department denied three nonprofit hospitals of the tax exemptions: Prentice Women's Hospital in Chicago, part of Northwestern Memorial Hospital; Edward Hospital in Naperville; and Decatur Memorial Hospital. The revenue department said the institutions did not offer enough charitable care to qualify for the status.

Then in September, AHA News Now reported, the governor had granted a moratorium on the hospital tax rulings while the state worked to clarify the law.

The Illinois Hospital Association (IHA) fought back against lifting the moratorium, stating the trade group was "extremely concerned" with the decision.

"The issuance of further rulings would be a distraction from the work that needs to be accomplished in developing a legislative solution over the next three months of the General Assembly's spring session," IHA President and CEO MaryJane A. Wurth said in a statement yesterday. She continued, "Requiring non-profit hospitals across the state to pay property taxes would undermine patients' access to care, increase health care costs and damage an already fragile health care system."

The American Hospital Association in its report last month stated that nonprofit hospitals put an average of 11.3 percent of their total spending toward community benefits, including free care, community health improvement programs and subsidized services. The report also emphasized that hospitals do more for their communities outside of charity care, including health improvement programs, health professions education and medical research, as well as cash and in-kind donations to community groups.

For more information:
- read the Chicago Tribune article
- here's the AHA News Now brief
- read the IHA statement

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