Illinois Supreme Court strikes appellate court ruling on nonprofit hospitals tax exemption
Supreme Court justices said Appellate Court lacked jurisdiction, sent case back to lower court for reconsideration, didn't rule on constitutionality.
Decatur Memorial Hospital is a tax-exempt facility. Photo by SIU Medicine
The Illinois Supreme Court last week vacated an appellate court's ruling that found a state law allowing nonprofit hospitals to avoid paying property taxes in some cases was unconstitutional.
That means nonprofit hospitals in the state, such as HSHS St. Mary's and Decatur Memorial Hospital, will continue to avoid being taxed for the time being.
[Also: Democrats shun $400 million insurance CEO tax break in heated Ways and Means session]
In a statement issued last week, the Illinois Health and Hospital Association said Section 15-86, the constitutionality of which was upheld, "was a bipartisan and reasonable approach to hospital property tax exemption that accomplished a number of important goals," including promoting healthcare delivery to low-income residents and ensuring hospitals have the proper resources to serve their communities.
The current law allows nonprofit hospitals to avoid paying property taxes if the value of their charitable services is equal to or greater than their tax liability. The appeals court said the Illinois Constitution allows lawmakers to exempt only property used solely for charitable purposes.
The Supreme Court justices said the Illinois 4th District Appellate Court lacked jurisdiction and remanded the case to the court in which it started for reconsideration. The Supreme Court did not rule on whether the tax-exempt status was constitutional. IHHA has said it would like to see the high court weigh in on the situation.
Twitter: @JELagasse
