Moody’s: N.J. hospital tax ruling is bad news for other hospitals

Morristown (N.J.) Medical Center being stripped of its property tax exemption could have negative consequences for other nonprofit hospitals in the state, according to Moody’s Investors Service.

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Morristown Medical Center lost its property tax exemption last month when a tax court judge ruled that the hospital failed to satisfy the legal test that it operated as a nonprofit, charitable organization.

The ruling may induce other New Jersey municipalities to file similar lawsuits to challenge the nonprofit status of hospitals, which is credit negative for New Jersey’s nonprofit hospitals that could face larger property tax bills, according to Moody’s.

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