PeaceHealth St. John Medical Center in Longview, Wash., could face a significant financial burden due to a decade of missed business and occupation tax payments to the city, Oregon Public Broadcasting reported Aug. 12.
Hospital officials told Becker’s the issue dates back to 2010, when the hospital’s parent organization, PeaceHealth, consolidated its finance operations at its shared services center in Vancouver, Wash.
“In that transition, the B&O tax collection from PeaceHealth to the city ceased, unbeknownst to both the hospital and the city,” hospital officials said. “Recently, as the city was faced with a budget deficit and seeking solutions, it was discovered that the city had not invoiced PeaceHealth, nor had PeaceHealth paid the B&O tax.”
Now, PeaceHealth is negotiating with the city over whether the system will have to pay its tax liability, which, as a nonprofit, would be roughly 10% of its nonexempt ambulatory services, according to OPB.
PeaceHealth is analyzing years of archived data to determine how much is owed. Based on preliminary calculations going back a decade, the health system estimates arrears between $500,000 and $600,000 without penalties, hospital officials said.
At the same time, the Longview City Council is discussing whether PeaceHealth will lose an exemption from the B&O tax on St. John’s nonprofit hospital-based services, according to OPB.
PeaceHealth estimates that losing this exemption on those services would create an estimated $400,000 annual financial burden upon St. John. Hospital officials said this proposal is expected to be presented at an upcoming city council meeting.
“We value our decades-long partnership with the city and region that has enabled us to make ongoing investments back into the community to improve access, keep quality healthcare close to home, and respond to the ongoing and changing needs of those we serve,” hospital officials said. “Since 2019, PeaceHealth has made $2.9 million in community investments to help address housing access, food insecurity, and other social determinants of health. We remain committed to caring for a community we have served for more than 85 years.”
PeaceHealth is a nonprofit Catholic health system with approximately 16,000 caregivers, nearly 3,200 physicians and clinicians and more than 160 clinics and nine medical centers across Oregon, Washington and Alaska.
