Hospital tax exemptions halted in Illinois

Ayla Ellison (Twitter) - Print  | 

The Illinois Department of Revenue will put off issuing any new property tax exemptions to hospitals after an Illinois appellate court ruled part of a law that allows nonprofit hospitals to avoid paying property taxes is unconstitutional.

In a ruling earlier this month, the Illinois 4th District Appellate Court held that the Illinois Constitution only allows lawmakers to exempt property "used exclusively" for "charitable purposes." The ruling conflicted with a 2012 law that simply required a nonprofit hospital's charitable services to exceed its property tax liability to qualify for tax exemptions.

The case will likely be appealed to the Illinois Supreme Court, and the Illinois Department of Revenue said it will hold off on issuing any new tax exemptions to hospitals until the matter is resolved, according to the Chicago Tribune.

There are several hospitals with pending applications for tax exemptions before the revenue department, including Swedish Covenant Hospital and Mercy Hospital and Medical Center, both based in Chicago.

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