Millions of dollars in additional property taxes could be in store for New Jersey hospitals if a tax court judge rules to eliminate Morristown (N.J.) Medical Center's property-tax exemption, according to a New Jersey Spotlight report.
Morristown government officials argue the hospital's property-tax exemption should be eliminated because it relies on for-profit physicians' practices, and its prices, they contend, are unreasonable for a nonprofit hospital that is property-tax exempt, according to the report. But the hospital argues it does not have full control over the amount it receives for its services and that its business model is in line with other nonprofit hospitals, the report reads. Both arguments refer to the main hospital building.
The judge has already ruled office space rented by the hospital for physicians' offices and the cafeteria could not be considered property-tax exempt, according to the report.
The report states that a ruling against the hospital this time around would mean New Jersey nonprofit hospitals would have to think about making structural changes to make it less likely they would lose their property-tax exempt status or shell out large amounts to local governments.
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