Bill Kennedy and Jared Johnson Discuss How Tower Health Fights for its Tax-Exempt Status
Nonprofit hospitals and municipalities and school districts across Pennsylvania are closely watching the tax assessment cases involving Tower Health. In October, a Chester County judge rejected Tower’s bid for property tax exemptions for three of its Chester County hospitals. Noting the money the hospitals transferred to Tower, Judge Jeffrey Sommer ruled the hospitals are more aligned with for-profit companies.
“A recent trial court decision could have significant, long-term consequences for the financial models of Pennsylvania nonprofit health care providers,” commented Partners Bill Kennedy and Jared Johnson, in an article published in Reading Eagle. “Ruling that three nonprofit Chester County hospitals of the Reading, Pa.,-based non-profit Tower Health system are not tax exempt ‘charities,’ a judge has ordered them to begin paying millions in annual local property taxes which fund local school districts.”
Bill and Jared said hospitals have long organized as nonprofit corporations and received recognition as tax-exempt organizations by the IRS. More than two decades after for-profit hospitals entered the market, there are still twice as many nonprofit hospitals as there are for-profits in the U.S.
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