Tax Alert
Illinois Passes Property and Sales Tax Exemptions for Hospitals
(June 5, 2012)
The Illinois Senate approved Senate Bills 2194 and 3261 on May 28, providing long-awaited relief to not-for-profit hospitals seeking to regain certain tax exemptions lost in the controversial Provena decision. Governor Pat Quinn likely will sign these into law shortly.
SB 2194 enacts property and sales tax exemptions for not-for-profit hospitals and a property tax credit for investor-owned hospitals. Also included in the bill is a cigarette tax increase. A companion bill, SB 3261, also known as the Hospital Uninsured Patient Discount Act, requires hospitals to provide discounts for low-income individuals.
Following is a summary of the key provisions of each bill:
SB 2194
- Provides property and sales tax exemptions for not-for-profit hospitals based on the value of each hospital’s charitable activities. Charitable activities include activities benefitting the health of low-income individuals and activities that lessen the government’s responsibility for the healthcare of low-income persons.
- Provides investor-owned hospitals with a property tax credit based on the amount of discounted or free care provided to low-income individuals.
- Increases cigarette taxes by $1 dollar per pack.
SB 3261
- Amends current law requiring hospitals to provide medically necessary free care to individuals with family income of up to 200 percent of the federal poverty guidelines in urban areas and up to 125 percent of the federal poverty guidelines in rural areas.
- Requires the attorney general to promulgate rules by June 2013 that will establish uses of presumptive eligibility for financial assistance determinations.
For More Information
Joe Calvanico
312.899.5491
joseph.calvanico@crowehorwath.com
Geralyn Hurd
312.899.8419
geralyn.hurd@crowehorwath.com
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