August 17, 2011 | Read Time: 1 minute
The state of Illinois on Tuesday denied property-tax exemptions to three nonprofit hospitals, saying they did not provide sufficient charity care to warrant tax breaks, The Chicago Tribune reports.
The institutions–Decatur Memorial Hospital, Edward Hospital in Naperville, and Chicago’s Prentice Women’s Hospital–reported spending 0.96 percent to 1.85 percent of their revenue on free care in applications for tax exemptions. The state’s Department of Revenue reviews nonprofit hospitals’ tax status when the facilities expand or change ownership.
In a statement, the revenue agency said it was following the guidance of the Illinois Supreme Court, which last year upheld the rejection of another medical center’s tax break over charity care.
“The fundamental question is whether hospitals operate as businesses or as charities,” the department said.
Officials with the hospitals defended their record of providing free care and other community benefits, and the Illinois Hospital Association said it was “deeply concerned” about moves to tax institutions that are already under financial pressure from the lingering economic downturn and the new federal health-care law.
