In an earlier column,1 we analyzed the controversial revocation by the Illinois Department of Revenue of the real estate tax-exemption of Provena Covenant Medical Center, a not-for-profit Catholic hospital. That revocation was ultimately upheld by the Illinois Supreme Court. Since then, there have been more attempts by various taxing authorities to challenge the real estate tax-exemptions of not-for-profit hospitals and health care systems. A recent decision2 from the Tax Court of New Jersey revoking most of the real estate tax exemption of Morristown Memorial Hospital has raised concern among not-for-profit hospitals in that state and elsewhere. The 88-page decision is as notable for its result as it is for the court’s historical and legal analysis.
Exemption Criteria
New Jersey’s tax exemption for hospitals3 reads, in relevant part:
