Here are three things to know about the bipartisan measure.
1. The bill is a response to lawsuit challenging Morristown (N.J.) Medical Center’s tax exemption status, according to Bloomberg. The 687-bed hospital lost the case and agreed to pay $15.5 million in property taxes due to “blurred lines” between its nonprofit and for-profit businesses, according to the report. Princeton (N.J.) University currently faces a similar lawsuit.
2. The Morristown Medical Center ruling is due in part to consolidation and the growth of joint ventures and other for-profit entities owned by nonprofit hospitals. According to the report, old tax codes do not fit these new business structures.
3. The bill to address this issue has passed a state Senate committee and would establish a tax code for the “new” nonprofit hospital that also has for-profit businesses, according to Bloomberg. It would require hospitals to pay $2.50 per bed per day to offset community costs for police, fire and ambulance services. According to the report, some money-losing hospitals would be considered exempt.
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