JULY 1, 2015, 11:47 PM LAST UPDATED: WEDNESDAY, JULY 1, 2015, 11:48 PM
BY LINDY WASHBURN
STAFF WRITER |
THE RECORD
A ruling in state tax court that has taken away the property-tax exemption of a major medical center because it operates more like a for-profit business than a charitable institution could have implications for other non-profit hospitals around the state if the municipalities that host them seek to collect property taxes.
Judge Vito Bianco declared in a closely watched opinion that Morristown Medical Center failed “to qualify for property tax exemption” for three years beginning in 2006. The case has been in the court system for the better part of a decade. It is unclear how the ruling applies to later years.
Non-profit hospitals have changed a lot since their origins as “charitable alms houses providing free basic medical treatment to the infirm poor,” he said, likening Morristown’s business model to that of its “new for-profit competitors.” Eight hospitals statewide currently are owned by for-profit companies, with two more due to be acquired at the end of this month. These investor-owned facilities pay taxes, unless they negotiate tax abatements with local authorities.
Like the for-profits, “today’s non-profit hospitals have evolved into labyrinthine corporate structures, intertwined with both non-profit and for-profit subsidiaries and unaffiliated corporate entities,” Bianco wrote. They “generate significant revenue and pay their professionals salaries that are competitive even by for-profit standards.”
https://www.northjersey.com/news/hospital-s-tax-ruling-could-have-ripple-effect-1.1366632
