Court: Nursing homes do not qualify as charitable, tax exempt

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Two Pennsylvania skilled nursing facilities are no longer entitled to an exemption from the payment of property taxes because they do not qualify as "pure public charities," according to a recent ruling by a Pennsylvania appeals court.

The skilled nursing facilities at Menno Village and Menno Haven Penn Hall in Chambersburg, PA, are affiliated with continuing care retirement communities, operated by Menno Haven Inc. The court ruled that Menno Haven failed to show that the facilities qualify for exemption because the facilities do not satisfy the statutory criteria set forth in the Institutions of Purely Public Charity Act. The court took issue with the fact that the costs of Menno Haven's skilled nursing residents were paid primarily by funds paid to Menno Haven in the form of entrance fees and service fees from residents in the operator's independent living and assisted living communities.

A New York court issued a similar ruling earlier this year saying that a Westchester County long-term care facility was no longer eligible for a tax exemption as a charity since it had a retirement component to the community.