Illinois hospital seeks $10M property tax refund

Presence Covenant Medical Center in Urbana, Ill., is seeking a refund of property taxes paid on 68 properties, according to The News-Gazette.

Presence Covenant Medical Center filed suit in April 2015 against the Champaign County treasurer, the county supervisor of assessments, the county board of review and the board's individual members, seeking $10 million in property taxes, plus interest. The hospital argued it is a charitable organization entitled to tax exemptions and therefore should not have been required to pay the property taxes, according to the report.

Presence's case was placed on hold five months after it was filed while a similar suit brought by Carle Foundation Hospital in Urbana worked its way through the courts.

Under a 2012 law, a nonprofit hospital in Illinois doesn't have to pay property taxes if it can show its charitable services are equal to or exceed its property tax liability. In January 2016, the Illinois 4th District Appellate Court ruled the 2012 law is unconstitutional. The appellate court held that the Illinois Constitution only allows lawmakers to exempt property "used exclusively" for "charitable purposes." The ruling was issued in the case filed by Carle Foundation Hospital against the city of Urbana and other local taxing districts.

In March, the Illinois Supreme Court vacated the appellate court's decision on jurisdictional grounds and remanded the Carle Foundation Hospital case back to the circuit court. 

With the Carle Foundation Hospital lawsuit being reexamined in the lower court, Presence Covenant Medical Center's case was restarted. On Monday during status hearing, a circuit court judge granted the assistant state's attorney handling the case one month to rewrite a motion to dismiss the lawsuit.

At issue in the case are property taxes paid on 68 Presence-owned properties for several tax years between 2003 and 2012, according to The News-Gazette.

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