Charitable Exemptions for Hospitals Remains a Hot Topic


According to a recent report in Crain’s Chicago Business, the Illinois Department of Revenue has not issued a single decision concerning hospital property tax exemption applications since the Illinois Supreme Court issued its decision in Provena Covenant Medical Center v. Dept. of Revenue in March 2010. According to the report, more than 95 hospital properties are currently awaiting rulings on their exemption applications.

We alerted you to the Provena case in a FR Alert when the Illinois Supreme Court upheld the revocation of the Provena Medical Center’s property tax exemption by the Champaign County Board of Review. Three Justices joined in an opinion stating that the evidence established that Provena Covenant Medical Center was not entitled to a charitable property tax exemption because almost all its revenue was derived from fees and only 0.7% of the care it provided was free of charge. Two Justices wrote separately to emphasize that in their opinion the Court should not set a numerical threshold for the amount of charity care that must be provided in order to receive an exemption. Instead, they voted to uphold the revocation of the exemption because the hospital failed to provide sufficient evidence establishing that it was entitled to an exemption.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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