Illinois Supreme Court to consider hospital property taxes
A case scheduled to go before the Illinois Supreme Court this week is challenging the law that allows the state’s not-for-profit hospitals to skip paying property taxes.
Applications for hospital property tax exemptions have been in limbo for about a year while the courts consider the issue, the Chicago Tribune reported. The Supreme Court will hear the case Thursday.
Those challenging the law have said many not-for-profit hospitals enjoy hefty profits and should have to contribute to their communities like other businesses. Those opposed also argue that the Illinois Constitution allows exemptions only for property used exclusively for charitable purposes.
Hospitals contend that they provide valuable charitable care and use the exemptions to fulfill their communities’ health care needs.
“If the law is struck down, then it’s going to be a big issue for not-for-profit hospitals across the state,” said John Colombo, a tax law professor at the University of Illinois at Urbana-Champaign.
Nearly 160 of Illinois’ more than 200 hospitals are not-for-profit, which include Memorial Medical Center and HSHS St. John’s Hospital in Springfield, as well as many of the most well-known health care facilities in the Chicago area, such as Advocate Health Care, Northwestern Memorial Hospital and Rush University Medical Center.
It is not immediately clear how much the hospitals would have to pay in property taxes if the law is ruled unconstitutional. However, a report by the Center for Tax and Budget Accountability from 2009 put the value of 47 Chicago area not-for-profit hospitals’ property tax exemptions at $279 million.
An Illinois not-for-profit hospital can currently be considered tax-exempt if the value of its charitable services is equal to or greater than its estimated tax liability.