Non-profit nursing homes owe taxes after all, says state high court

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The Illinois Supreme Court ruled Thursday that the Eden Retirement Center of Glen Carbon, IL, must pay county property taxes despite its nonprofit status.

In a reversal of two lower court rulings, the Supreme Court sided with the Illinois Department of Revenue to require that the nursing home keep paying its nearly $44,000 in annual property tax bill.

The facility, which includes independent living apartments and skilled-nursing beds, had claimed tax-exempt status as a nonprofit charity. But the Supreme Court agreed with the state Department of Revenue's argument that because incoming residents were required to submit financial statements and pay significant fees, the organization does not live up to the state's definition of a charity.  State officials had further argued that facilities are not necessarily tax-exempt because they are nonprofit.

The decision has "huge implications" for nursing homes and retirement communities throughout the state, Jane Rubin, the facility's executive director told the St. Louis Post-Dispatch.

While the center has reluctantly paid its tax bill since 1996 when it received a county property tax bill for its independent living apartments, Rubin noted that the federal government grants tax-exempt status to the facility. State officials brought the challenge on behalf of the school district and the village, which would benefit from increased tax revenues.

Eden took in just $12,552 in charitable contributions, while earning more than $989,000 in income from "independent living" residents, according to Supreme Court opinion notes.