Illinois' recent legislation that defined charity care criteria for property tax exemptions could be a positive sign for non-profit hospitals in the state, according to a report from Fitch Ratings.
Last week, the Illinois House and Senate passed bills that explained the new charity care guidelines. In order to quality for a property tax exemption, non-profit hospitals must provide charity care that equals or exceeds the estimated value of a hospital's property tax exemption, which is calculated using a formula based on fair market value. For-profit hospitals will also receive an income tax credit based on their charity care.
The legislation also included a $1-per-pack tax increase on cigarettes, which is expected to add $700 million to the state Medicaid coffers.
Fitch analysts said the bills, which are expected to be signed by Democratic Gov. Pat Quinn, provide "long overdue clarity as to what constitutes charity care," according to the report.
These types of non-profit hospital charity care benchmarks could also spread to other states, as South Carolina has also recently questioned the tax status of state non-profit and academic medical centers.
Last week, the Illinois House and Senate passed bills that explained the new charity care guidelines. In order to quality for a property tax exemption, non-profit hospitals must provide charity care that equals or exceeds the estimated value of a hospital's property tax exemption, which is calculated using a formula based on fair market value. For-profit hospitals will also receive an income tax credit based on their charity care.
The legislation also included a $1-per-pack tax increase on cigarettes, which is expected to add $700 million to the state Medicaid coffers.
Fitch analysts said the bills, which are expected to be signed by Democratic Gov. Pat Quinn, provide "long overdue clarity as to what constitutes charity care," according to the report.
These types of non-profit hospital charity care benchmarks could also spread to other states, as South Carolina has also recently questioned the tax status of state non-profit and academic medical centers.
More Articles on Illinois Hospitals:
UIC Medical Center Workers Kick Off 3-Day Strike
Illinois Set to Finalize New Charity Care, Tax Exemption Regulations for Hospitals
Illinois Legislature Passes $1.6B in Medicaid Cuts