Court restores facility's tax-exempt status

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An Illinois Circuit Court judge is allowing Provena Covenant Medical Center in Urbana, Ill., to be exempt from property taxes, reversing the ruling of the director of the Illinois Department of Revenue. The decision highlights the growing debate over whether healthcare facilities should have tax-exempt status.

If the judge maintained the previous decision, the hospital would have been the first in the state to be denied a property tax exemption. Instead, the judge determined that the facility is entitled to an exemption because it qualifies as both a charitable and a religious organization.

IDOR Director Brian A. Hamer found that the hospital did not qualify for an exemption from state property taxes because the institution's commitment to charitable care was insufficient under state laws. Hospitals and nursing homes alike have come under increased scrutiny for their ability to justify exemption from state property taxes.