While federal legislators like Sen. Chuck Grassley (R-IA) have made threatening noises over whether non-profit hospitals had earned their income tax exemption, to date none of them have taken steps to actually revoke or limit that exemption. In Boston, however, it's another story, where Mayor Thomas Menino is going after their real estate tax exemption enjoyed by the city's not-for-profit institutions.
Right now, many of the hospitals already pay a voluntary fee in lieu of taxes, but it's not much. All told, the city's tax-exempt institutions pay $32.4 million per year in lieu of taxes, about 10 times less then they'd pay if they were taxed. Menino wants to raise the amount they kick in, in an effort to address economic problems and what some see as an unfair system.
He also wants to even out how much institutions pay, as the amount they contribute varies wildly from one hospital to another right now. For example, Mass General pays $2 million annually, while Beth Israel Deaconess gives $125,000.
The hospitals, of course, think that raising taxes is a bad idea, and note that they contributed $175 million worth of community benefits to the city last year in addition to the payments.
To learn more about the controversy:
- read this Boston Globe piece
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