Illinois hospital will have to meet constitutional charity standards, judge rules

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An Illinois judge has ruled that the operator of Carle Foundation Hospital in Urbana must meet constitutional standards for charitable organizations in order to receive tax exemptions, The News-Gazette reports.

The Carle Foundation is seeking retroactive property tax exemptions for 2004-2011 and a refund for taxes it paid to local authorities during that time. However, Champaign County Judge Randy Rosenbaum agreed with the recent Illinois Supreme Court ruling that hospitals seeking tax exemptions must not only offer as much charity care as they would have paid in taxes; they also must extend charity care to an indefinite number of people and not create any barriers to it.

Hospitals looking for a tax exemption  also must show they do not have any capital, stock or shareholders. Carle Foundation attorneys  have argued that they need only show that the hospital complies with the terms of the hospital tax-exemption law.

John Colombo, a retired law professor at the University of at Illinois Urbana-Champaign, said that the ruling is important for the Carle Foundation’s upcoming trial, but does not clearly define charitable use for the future of Illinois hospitals.

“The Illinois Supreme Court is going to have to say at some point, ‘Here’s what it takes for an Illinois hospital to be tax-exempt,'” said Mr. Colombo.



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