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Healthcare, Property Tax Exemptions and Implications from Recent Court Cases
Unformatted Document Text:  25 where to draw the line; almost any auxiliary facility can be found to improve the financial well-being of a hospital. Secondly, these exemptions because they are exceptions to the requirements of uniform taxation, tend to give an unfair competitive advantage to the exempted facility over similar facilities privately operated. 71 Where the courts have looked for evidence of the required charitable motive in the physician practice it has found it lacking in some cases. The court noted in Pennsylvania State University, Milton S. Hershey Medical Center v. Derry Township School District The fact that these practices are subsidized by the medical center arguably benefits the physicians in those practices in direct competition with other area physician practices. Thus, it can be determined that the medical center practices do not operate entirely free from a private profit motive since no compelling evidence was presented that any charitable care was rendered by the physician practice centers. The willingness of the medical center to fund those losses year after year lends credence to other motivations, primarily that the medical practices are not being acquired to ensure the availability of medical treatments to needy individuals, but rather to ensure the consistent flow of patient admissions to the medical center and not one of the other area hospitals. 72 Similarly, the court observed a profit motive rather than a charitable motive in Sturdy Memorial Foundation v. Board of Assessors of North Attleborough. 73 The court denied property tax exemption of the clinic facilities, finding that although the medical clinic operated at a loss, the loss was due to physician compensation and bonuses. 71 Chisago Health Services, Relator, v. Commissioner of Revenue, Et Al., Respondents 462 N. W. 2d 386; 1990 Minn. LEXIS 334. (Supreme Court of Minnesota 1990) 72 Pennsylvania State University, Milton S. Hershey Medical Center v. Derry Township School District 45 Pa. D. & D. 4th 51; 2000 Pa. D. & C. LEXIS 25. (Common Pleas Court of Dauphin County, Pennsylvania 2000) 73 Sturdy Memorial Foundation, Inc. v. Board of Assessors of North Attleborough 60 Mass. App. Ct. 573; 804 N.E. 2d. 368; 2004 Mass. App. LEXIS 250. (Appeals Court of Massachusetts 2004)

Authors: Fanning, Mary.
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25
where to draw the line; almost any auxiliary facility can be found to improve the
financial well-being of a hospital. Secondly, these exemptions because they are
exceptions to the requirements of uniform taxation, tend to give an unfair
competitive advantage to the exempted facility over similar facilities privately
operated.
Where the courts have looked for evidence of the required charitable motive in
the physician practice it has found it lacking in some cases. The court noted in
Pennsylvania State University, Milton S. Hershey Medical Center v. Derry Township
School District
The fact that these practices are subsidized by the medical center arguably benefits
the physicians in those practices in direct competition with other area physician
practices. Thus, it can be determined that the medical center practices do not
operate entirely free from a private profit motive since no compelling evidence was
presented that any charitable care was rendered by the physician practice centers.
The willingness of the medical center to fund those losses year after year lends
credence to other motivations, primarily that the medical practices are not being
acquired to ensure the availability of medical treatments to needy individuals, but
rather to ensure the consistent flow of patient admissions to the medical center and
not one of the other area hospitals.
Similarly, the court observed a profit motive rather than a charitable motive in
Sturdy Memorial Foundation v. Board of Assessors of North Attleborough.
denied property tax exemption of the clinic facilities, finding that although the medical
clinic operated at a loss, the loss was due to physician compensation and bonuses.
71
Chisago Health Services, Relator, v. Commissioner of Revenue, Et Al., Respondents 462 N. W.
2d 386; 1990 Minn. LEXIS 334. (Supreme Court of Minnesota 1990)
72
Pennsylvania State University, Milton S. Hershey Medical Center v. Derry Township School
District 45 Pa. D. & D. 4th 51; 2000 Pa. D. & C. LEXIS 25. (Common Pleas Court of Dauphin County,
Pennsylvania 2000)
73
Sturdy Memorial Foundation, Inc. v. Board of Assessors of North Attleborough 60 Mass. App.
Ct. 573; 804 N.E. 2d. 368; 2004 Mass. App. LEXIS 250. (Appeals Court of Massachusetts 2004)


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