Hospitals get clear criteria for tax exemptions

With some nonprofit hospitals denied tax exemptions in Illinois, the state Senate yesterday approved a bill that clarifies how hospitals can qualify for tax-exempt status and outlines how charity care is determined.

The bill, SB 2194, creates a new income tax credit for for-profit, investor-owned hospitals, in addition to imposing a $1-per-pack cigarette tax hike that would give the state Medicaid program about $700 million, The State Journal-Register reported.

The House already passed the bill, which now goes to Gov. Pat Quinn, who has voiced his support.

"By working together to pass these bills, strong progress has been made in our mission to restructure Medicaid, so that it serves as a health and wellness system instead of a provider-payment system," Quinn said yesterday in a statement. "As a result, our Medicaid system will continue to serve the millions of Illinois residents who rely on it."

The state's hospitals have hailed the bill's approval, which "sets clear, fair and workable criteria" for tax exemptions, Illinois Hospital Association President and CEO Maryjane A. Wurth said yesterday in a statement. With the legislation, tax-exempt hospitals will be held accountable for what is required of them as nonprofit organizations, she noted.

Meanwhile, tax exemptions for not-for-profit hospitals in North Carolina are coming under close scrutiny as lawmakers try to offset revenue shortfalls.

To learn more:
- check out the bill
- read Gov. Quinn's statement
- here's the State Journal-Register article
- read the IHA reaction (.pdf)

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