Illinois Department of Revenue Denies Charitable Property Tax Exemptions to Three Hospitals


As reported by Crain’s Chicago Business last week, the Illinois Department of Revenue denied charitable property tax exemptions to Prentice Women’s Hospital at Northwestern Memorial Hospital in Chicago, Edward Hospital in Naperville, and Decatur Memorial Hospital. Local public television station WTTW also aired a discussion of the issue on its Chicago Tonight program. The decisions were initial administrative determinations that can be appealed within the Department. This is the latest development in an ongoing realignment of Illinois property tax exemption law.

As discussed in a FR Alert, in 2010 the Illinois Supreme Court upheld the revocation of a charitable property tax exemption for Provena Covenant Medical Center in Urbana on the grounds that the hospital provided insufficient charity care as a percentage of its total revenues. The Court declined, however, to state what an adequate level of charity care would be. As government officials have attempted to define the adequate level of charity care provided by a hospital, numerous exemption applications from hospitals have remained on hold. These three recent decisions may indicate that more rulings are on the way.

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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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