Cook County Record

Monday, October 21, 2019

Tax exemption ruling against Chicago hospice could have ramifications for health care, taxpayers alike


By Cook County Record | Mar 28, 2019

CHICAGO – An Illinois appeals court has upheld state revenue officials' decision to deny a tax exemption to a suburban Chicago hospice facility.

And that decision could have significant ramifications felt throughout the state, affecting health care facilities, local governments and other property tax payers.

In February, a three-justice panel of the Illinois First District Appellate Court ruled for the Illinois Department of Revenue in a lawsuit filed by Midwest Palliative Hospice and Care Center, challenging the state's decision to deny them a requested tax exemption.

Attorney Scott Metcalf | JDSupra

In the denial, state officials determined less than 1 percent of the hospice's $30 million annual revenue went to charity, even though the Glenview facility shares land with a sister palliative facility that is exempt.

Midwest Palliative opened the facility in 2008 providing in-home care to terminally ill patients, next to the Marshak Family Hospice Pavilion, an inpatient care center.

The application for the Midwest Palliative tax exemption was denied, as state officials said the new hospice facility did not qualify because it did not exclusively or primarily engage in charity.

The ruling could produce a significant impact, said attorney Scott Metcalf of the Franczek law firm.

Metcalf said the decision  "may indicate that there is a trend in the law toward a more restrictive view of charitable property tax exemption." He added that medical facilities "are very large and often expensive facilities, that, if they are taxable, pay a large amount of taxes."

"Whether they are on the tax rolls, or off the tax rolls, it has a big impact," Metcalf said. "If they are allowed to get an exemption, that means all the other property owners in the school district and the municipality pay more money in taxes ... if these medical facilities are denied an exemption, the tax burden for everyone else goes down a little bit."

Metcalf said local governments must still proceed cautiously in seeking to revoke tax exemptions for health care-related facilities, as "it depends on the amount of charitable care the facility provides."

The attorney also said "there really isn't a mechanism for school districts or municipalities to end a property tax exemption once it's granted."

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Franczek Radelet Illinois Department of Revenue Illinois First District Appellate Court

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