An Illinois appellate court ruled Thursday that a 2012 law that allows nonprofit hospitals to avoid paying property taxes is constitutional, according to the Chicago Tribune.
The appellate court upheld a lower court's decision. The ruling comes just weeks before the Illinois Supreme Court is slated to hear a different case on the same issue.
The dispute in Illinois over hospital tax exemptions has been going on for years. In 2010, the Illinois Supreme Court handed down a decision that suggested nonprofit hospitals in the state that behave like for-profit businesses should not qualify for tax exemptions. Subsequently, the Illinois Department of Revenue denied tax exemptions to three hospitals.
Illinois hospitals were issued a win in 2012 when state lawmakers passed legislation that simply required a nonprofit hospital's charitable services to exceed its property tax liability to qualify for tax exemptions.
However, the tax exemptions were once again brought into question in January when the Illinois 4th District Appellate Court ruled the 2012 law unconstitutional, saying the Illinois Constitution only allows lawmakers to exempt property "used exclusively" for "charitable purposes." The ruling was issued in a case brought by Carle Foundation Hospital in Urbana, Ill., against the city of Urbana and other local taxing districts.
The Illinois Supreme Court announced in May it would hear Carle Foundation Hospital's appeal. The court is scheduled to hear oral arguments in the case Jan. 12.
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