Medical Groups in Idaho Sue State in Tax-Exempt Dispute

Two medical groups affiliated with St. Luke's Regional Medical Center in Boise, Idaho, have filed suit after the state tax commission ruled the organizations aren't tax-exempt and owe more than $400,000, according to an Idaho State Journal report.  

St. Luke's-Idaho Elks Rehabilitation Services and the Center for Wound Healing and Hyperbaric Medicine are both located in Boise and were formed by St. Luke's Regional Medical Center and the Idaho Elks Rehabilitation Hospital in 1996 and 2005, respectively.

In December 2012, the state tax commission determined the two medical groups are for-profit and owe the state sales tax, including nearly $324,000 in back taxes and more than $77,000 in interest. The state says the groups are separate legal entities from the non-profit hospitals and file their own tax returns.  

The groups filed suit last month, claiming they are departments within IERH and "distinguishable" from the rehab hospital, thus making them tax-exempt. The groups also argued any profits they make go back to St. Luke's and IERH.

A result in the lawsuit isn't expected for at least six months, according to the report.

More Articles on Hospitals and Tax-Exempt Status:

IRS to Give Non-Profit Hospitals Slack on Community Needs Assessments
AHA to Congress: Hands Off Non-Profit Tax Exemptions
Pittsburgh vs. UPMC: Getting to the Bottom of the Tax-Exempt Battle


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