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The Associated Press April 4, 2012, 6:50PM ET

5 Ill. hospitals pull requests for tax exemptions

Five Illinois hospitals have withdrawn their applications for tax exemptions, leaving it up to county governments whether to assess taxes on the properties.

Illinois Department of Revenue spokeswoman Susan Hofer said Wednesday that hospitals in Murphysboro, Moline, Urbana, Monmouth and Hillsboro have pulled their applications in the past week. That clears county authorities to evaluate the properties and collect taxes.

The hospitals may be hoping for state lawmakers to come through with new legislation this spring to clarify how hospitals can qualify for tax exemptions, said Illinois Hospital Association spokesman Danny Chun. The current standard is "murky," he said.

"It's not a surprise, given the risk of denial that might be involved in having an application reviewed now when a potential legislative solution with clear standards is close at hand," Chun said. The hospital association hasn't advised hospitals to withdraw applications, but has included that action in a list of options available to hospitals, Chun said.

Chun said he doesn't know how many other hospitals may be considering withdrawing their applications. About 17 hospitals still have applications for tax exemptions pending before the Department of Revenue.

The withdrawals from the five hospitals come as Illinois leaders grapple with a 2010 Illinois Supreme Court ruling on hospitals and taxes. The court found that an Urbana hospital wasn't doing enough charity care to qualify for a property tax exemption. That ruling called into question other hospitals' tax exemptions.

Most hospitals in the state are nonprofit institutions and most enjoy numerous tax exemptions, including from local property taxes that support cities, schools and parks.

The 2010 Illinois Supreme Court ruling resulted in Provena Covenant Medical Center in Urbana paying about $1.2 million in local property tax payments annually.

Last year, the Illinois Department of Revenue cited the high court's ruling when denying property tax exemptions to three hospitals: Northwestern Memorial's Prentice Women's Hospital in Chicago, Edward Hospital in Naperville and Decatur Memorial Hospital in Decatur. Cook County has moved to tax the Northwestern women's hospital.

In Illinois, counties collect property taxes, and the Department of Revenue decides which institutions are eligible for tax exemptions. In Cook County alone -- according to a 2006 estimate -- nonprofit hospitals could generate an estimated $241 million in tax revenue. That would lower the tax burden for other taxpayers.

Hofer said the revenue department is continuing to review pending applications for property tax exemptions from other hospitals. She said the department is participating in ongoing discussions with patient advocates, legislators, hospital leaders and others in the effort to set standards for tax exemptions.

Gov. Pat Quinn authorized more rulings on hospital tax exemptions earlier this month when earlier efforts to find a legislative compromise failed.


AP Medical Writer Carla K. Johnson can be reached at

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