August 16, 2011

Illinois Department of Revenue Decision Regarding Property Tax Exemptions Requested by Three Non-Profit Hospitals

On August 16, 2011, the Illinois Department of Revenue denied the property tax-exemption applications of three non-profit hospitals. In this group of preliminary rulings, the Department of Revenue said Northwestern Memorial Hospital's Prentice Women's Hospital, Edward Hospital, and Decatur Memorial Hospital did not merit a property tax exemption because they did not operate as charities. To determine if a non-profit organization qualifies as a charity and if the property in question is used exclusively for charitable purposes, the Illinois Department of Revenue considers whether the non-profit organization has the following five characteristics of a charitable institution: has no capital, capital stock, or shareholders; derives its funds mainly from private and public charity; dispenses charity to all who need and apply; does not provide gain or profit in a private sense to any person connected with it; and places no obstacles in way of those who need and would avail themselves of charity.