Illinois requires nonprofit hospitals to provide charity care or other “health services to low-income or underserved individuals” as a condition of property and sales tax exemption.

Illinois specifies a minimum level of charity care or other “health services to low-income or underserved individuals” that a nonprofit hospital must provide to qualify for property and sales tax exemption.

Effective in 2012, an Illinois statute requires that nonprofit hospitals seeking property tax exemption provide charity care or other specified services or activities at levels at least equivalent to what the hospital otherwise would be required to pay in property taxes. S.B. 2194, codified at 35 ILCS 200/15-86(c) (2012). For-profit hospitals are eligible to receive an income tax credit in an amount that is the lesser of 1) real property taxes paid during the tax year on property used for hospital purposes during the previous tax year and 2) the cost of free or discounted services provided pursuant to the hospital’s financial assistance policy. S.B. 2194, codified at 35 ILCS 5/223(a) (2012).

The Illinois Community Benefits Act requires that each nonprofit hospital to which it applies develop a community benefit plan and file an annual report of the plan with the Office of the Attorney General. 210 ILCS 76/20 (2003).

The Act does not apply to 1) government hospitals, 2) hospitals located outside of a metropolitan statistical area, or 3) hospitals with 100 or fewer beds. 210 ILCS 76/5 (2003).

Illinois requires that a nonprofit hospital to which the Illinois Community Benefits Act applies develop a community benefit plan that identifies the populations and communities the hospital serves and outlines the hospital’s goals and objectives for providing community benefits, including charity care and government-sponsored indigent health care. 210 ILCS 76/15 (2003).

A nonprofit hospital to which the Act applies must develop and submit to the Attorney General an annual report of its community benefits plan disclosing the amount and types of “community benefits actually provided, including charity care.” The hospital must include with its report an audited annual financial report for the preceding fiscal year. 210 ILCS 76/20 (2003). The hospital must include a financial assistance report disclosing, among other things, the number of financial assistance applications received, approved, and denied as well as the total amount of financial assistance provided. Ill. Admin. Code tit. 77 §4500.60 (2013).

Hospitals to which the Illinois Community Benefits Act applies must include in annual reports of their community benefits plans “a disclosure of the health care needs of the community that were considered in developing the hospital’s community benefits plan.” 210 ILCS 76/20(a)(2) (2003).

The Act does not apply to 1) government hospitals, 2) hospitals located outside of a metropolitan statistical area, or 3) hospitals with 100 or fewer beds. 210 ILCS 76/5 (2003).

A nonprofit hospital to which the Illinois Community Benefits Act applies is required to develop a community benefit plan.

The community benefit plan must identify the populations and communities served by the hospital and set out goals and objectives for providing community benefits that include charity care and government-sponsored indigent health care. 210 ILCS 76/15 (2003).

The Act does not apply to 1) government hospitals, 2) hospitals located outside of a metropolitan statistical area, or 3) hospitals with 100 or fewer beds. 210 ILCS 76/5 (2003).

Illinois requires both nonprofit and for-profit hospitals to provide discounts to uninsured patients.

The 2012 amendments to the Illinois Hospital Uninsured Patient Discount Act mandate that hospitals provide patient discounts that take into account hospital type and family income once an application for a discount is made. 210 ILCS 89/10. The law requires that hospitals provide:

Charitable discount of 100 percent of charges for medically necessary health care services exceeding $300 for uninsured patients with family incomes of not more than 125 percent of the federal poverty level. Note: This applies to rural and critical access hospitals. 210 ILCS 89/10, (a)(4).

Charitable discount of 100 percent of charges for medically necessary health care services exceeding $300 for uninsured patients with family incomes of not more than 200 percent of the federal poverty level. Note: This applies to hospitals other than rural and critical access hospitals. 210 ILCS 89/10, (a)(2).

Discount from charges for medically necessary health care services exceeding $300 to any uninsured patient with a family income of not more than 300 percent of the federal poverty level. Note: This applies to rural and critical access hospitals. 210 ILCS 89/10, (a)(3)(2012).

Discount from charges for medically necessary health care services exceeding $300 to any uninsured patient with a family income of not more than 600 percent of the federal poverty level. Note: This applies to hospitals other than rural and critical access hospitals. 210 ILCS 89/10, (a)(1) (2012).

The 2012 amendment to the Fair Patient Billing Act (S.B. 3261, codified as 210 ILCS 88/27) also directed the Office of the Attorney General to develop rules requiring hospitals to include specifically prescribed language in financial assistance applications. The final rules require, among other things, that financial assistance applications include an opening statement advising applicants that they may be eligible for free or discounted care and that they are not required to provide a Social Security number. A required certification at the end of financial assistance applications must include the text that the rule prescribes, and none other. 77 Ill. Admin. Code §4500.30(a), (h) (2013); (38 Ill. Reg. 12673) (June 20, 2014).

The statute also required the Attorney General to promulgate rules setting forth appropriate methodologies for determining “presumptive eligibility” under which patients would be deemed “eligible for hospital financial assistance without further scrutiny.” S.B. 3261, codified as 210 ILCS 88/27 (2012). Ill. Admin. Code tit. 77 §4500.40(a) (2013). Under those rules, patients in rural or critical access hospitals will be deemed presumptively eligible if they are homeless, deceased with no estate, mentally incapacitated, or Medicaid eligible—but not on the date of service or for a non-covered service. Ill. Admin. Code tit. 77 §4500.40(b);(d) (2013). In addition to the above criteria, patients in hospitals that are not rural or critical access hospitals will also be presumptively eligible if enrolled in a public assistance program for individuals below 200 percent of the federal poverty level such as the Women, Infants and Children Nutrition Program, and the Supplemental Nutrition Program. Ill. Admin. Code tit. 77 §4500.40(b) (2013). A hospital may include additional presumptive eligibility criteria, provided it expands a patient’s presumptive eligibility. Ill. Admin. Code tit. 77 §4500.40(c);(e)(2013).

Illinois requires both nonprofit and for-profit hospitals to post and otherwise disseminate their financial assistance plans.

Each hospital must post a sign containing specified language conspicuously in the admission and registration areas. 210 ILCS 88/15 (2007). Each hospital that has a website must also post notice there and make a brochure, an application for financial assistance, or other written material available in the hospital admission or registration area. 210 ILCS 88/15(d) (2007). In addition, each patient bill or other summary of charges to an uninsured patient must include a prominent statement that an uninsured patient meeting specified income requirements may qualify for an uninsured patient discount, and information about how to apply for the discount. S.B. 3261, codified as 210 ILCS 89/10(d) (2012).

Illinois law limits nonprofit and for-profit hospital collection practices.

Generally, Illinois hospitals may collect as payment for health care services no more than 25 percent of the family income of a patient eligible for an uninsured patient discount. S.B. 3261, codified as 210 ILCS 89/10(c) (2012).

Before pursuing a collection action against an uninsured patient, a hospital must afford the patient an opportunity to assess the accuracy of the bill, apply for financial assistance, and agree to a reasonable payment plan offered by the hospital. In addition, for an uninsured patient who has indicated the inability to pay the full amount of the bill in a single payment, the hospital must give the patient at least 60 days after discharge to submit an application for financial assistance/charity care. 210 ILCS 88/30(a)(1)-(3) (2007). A hospital may not refer a bill to a collection agency without first offering the patient an opportunity to request a reasonable payment plan within 30 days of the date of the initial bill, and giving the patient another 30 days from the request to agree to a reasonable payment plan offered by the hospital. 210 ILCS 88/30(b) (2007).

Additionally, a hospital may not pursue legal action for non-payment against an uninsured patient who has clearly demonstrated a lack of sufficient income or assets to pay the bill and who has acted reasonably and cooperated with the hospital in good faith. 210 ILCS 88/35 (2007).

Illinois law exempts the income of nonprofit hospitals from state income tax.

Illinois law exempts from state income tax the income of charitable or similar organizations that are exempt from federal income tax. 35 ILCS 5/205(a) (2011).

For-profit hospitals are eligible to receive an income tax credit in an amount that is the lesser of a) real property taxes paid during the tax year on property used for hospital purposes during the previous tax year and b) the cost of free or discounted services provided pursuant to the hospital’s financial assistance policy. 35 ILCS 5/223(a) (2012).

Illinois law requires nonprofit hospitals to provide charity care/community benefits as a condition of property tax exemption.

Illinois’ statute, adopted in 2012, requires that nonprofit hospitals seeking property tax exemption (real property and tangible personal property) provide specified services and activities (charity care, health services to low-income and underserved individuals, etc.) at levels at least equivalent to what the hospital otherwise would be required to pay in property taxes. S.B. 2194, codified as 35 ILCS 200/ 15-86(c); 2012 Ill. Pub. L. No 97-0688 (2012).

For-profit hospitals are eligible to receive an income tax credit in an amount that is the lesser of a) real property taxes paid during the tax year on property used for hospital purposes during the previous tax year and b) the cost of free or discounted services provided pursuant to the hospital’s financial assistance policy. S.B. 2194 codified as 35 ILCS 5/223(a) (2012).

Illinois law requires nonprofit hospitals to provide charity care/community benefits as a condition of sales and use tax exemption.

Illinois’ statute, adopted in 2012, requires that nonprofit hospitals seeking sales tax and use tax exemptions provide specified services and activities (charity care, health services to low-income and underserved individuals, etc.) at levels at least equivalent to what the hospital otherwise would be required to pay in property taxes. 35 ILCS 120/2-9; 35 ILCS 105/ 3-8 (2012).

Nevada requires charity care to be provided by nonprofit and for-profit hospitals that have at least 100 beds and are located in a county that has at least 2 licensed hospitals. Nev. Rev. Stat. §439B.300(2); Nev. Rev. Stat. §439B.320.

Nevada requires that a specified minimum level of charity care be provided by nonprofit and for-profit hospitals that have at least 100 beds and are located in a county that has at least 2 licensed hospitals.

Nevada requires that nonprofit and for-profit hospitals that have at least 100 beds and are located in a county that has at least 2 licensed hospitals annually provide care for indigent inpatients in an amount that represents at least 0.6 percent of the hospital’s net revenue for the preceding fiscal year. Nev. Rev. Stat. §439B.320. If the amount of treatment a hospital provides to indigent patients is less than 0.6 percent of its net revenues for the previous year, the county will deduct the shortfall from payments otherwise owed to the hospital. Nev. Rev. Stat. §439B.340(2)(c).

Nevada requires community benefit reporting by nonprofit and for-profit hospitals that have at least 100 beds and are located in a county with at least 2 licensed hospitals.

Nevada requires each nonprofit and for-profit hospital that has at least 100 beds and is located in a county that has at least 2 licensed hospitals to file an annual report with the state Department of Health and Human Services that details the expenses associated with providing community benefits and in-kind services to the community in which it is located. Nev. Rev. Stat. §449.490(3)(a).

Nevada does not require hospitals to conduct community health needs assessments.

Nevada does not require hospitals to develop community benefit plans or implementation strategies.

Nevada does not require hospitals to adopt or implement financial assistance policies, but it requires nonprofit and for-profit hospitals that have at least 100 beds and are located in a county with at least 1 other hospital to provide indigent care equivalent to at least 0.6 percent of the hospital’s net revenues.

Nevada requires nonprofit and for-profit hospitals with 200 or more beds to include with a patient’s first statement after discharge a notice of any reduction or discount of charges available, along with the criteria a patient must meet in order to qualify for the reduction or discount. Nev. Rev. Stat. §§439B.260 (2).

Nevada law limits hospital charges and billing and collection practices.

Nevada requires nonprofit and for-profit hospitals with 200 or more beds to reduce by at least 30 percent the total charges billed for inpatient medical services to patients who are uninsured, ineligible for publicly funded health coverage, and make reasonable arrangements within 30 days after the hospital sends a bill that notifies them of available discounts and eligibility criteria. Nev. Rev. Stat. §§439B.260 (1) –(2).

Before undertaking collection efforts against patients who are insured or who may be eligible for public insurance, a hospital must have submitted its claim for hospital services to the third-party payer and received a determination as to payment. Nev. Rev. Stat. §449.757.

Nevada does not have a state income tax.

Nevada law exempts from taxation the property of nonprofit hospitals.

Nevada law exempts from taxation the property and buildings owned by a nonprofit corporation and used by “a hospital … for the care or relief of … sick, infirm, or indigent persons.” Nev. Rev. Stat. §361.083.

Also exempt is the property of any corporation “prohibited by its articles of incorporation from declaring or paying dividends” where its income is “devoted to the general purposes of charity” without private inurement and “where indigent persons without regard to race or color may receive medical care and attention without charge or cost.” Nev. Rev. Stat. §361.140(b).

Nevada law exempts nonprofit hospitals from state sales and use taxes.

Nevada law exempts from taxation personal property sold by or to nonprofit organizations created for charitable purposes. Nev. Rev. Stat. §§372.326; 372.3261.

Pennsylvania requires “institutions of purely public charity” to provide community benefits as a condition of tax exemption.

In 2012, the Supreme Court of Pennsylvania ruled that to qualify for a property tax exemption an organization must first meet the definition of an institution of purely public charity under Pa. Const. art. VIII, § 2(a)(v). An organization will qualify as a purely public charity under the Pennsylvania Constitution if it: (1) advances a charitable purpose, (2) donates or renders gratuitously a substantial portion of its services, (3) benefits a substantial and indefinite class of persons who are legitimate subjects of charity, (4) relieves the government of some of its burden, and (5) operates entirely free from private profit motive. Hospital Utilization Project v. Commonwealth, 507 Pa. 1, 487 A.2d 1306, 1317 (Pa. 1985).

If an organization satisfies the constitutional standards, only then does a court look to the Institutions of Purely Public Charity Act to determine eligibility for property tax exemption under the statutory requirements. Mesivtah Eitz Chaim of Bobov, Inc. v. Pike County Board of Assessment Appeals, 615 Pa. 463, 44 A.3d 3 (Pa. 2012).

Pennsylvania’s Institutions of Purely Public Charity Act establishes specific criteria that a nonprofit corporation must satisfy in order to qualify as an “institution of purely public charity” that is exempt from Pennsylvania property and sales tax. These criteria include a requirement that the organization “donate or render gratuitously a substantial portion of its services” to benefit the community. 10 Pa. Stat. §375(d). In addition, the Hospital & Healthsystem Association of Pennsylvania has developed voluntary guidelines for hospital charity care and financial assistance policies: Charity Care and Financial Aid Guidelines for Pennsylvania Hospitals (2004).

Pennsylvania law permits most nonprofit hospitals to choose from among seven alternative community benefit standards in order to qualify as a tax-exempt “institution of purely public charity.” Six of these standards specify a minimum level of community benefits.

Pennsylvania’s Institutions of Purely Public Charity Act requires that in order to be deemed an “institution of purely public charity,” a hospital must do all of the following: advance a charitable purpose, operate free from any private profit motive, donate a substantial portion of its services to benefit the community, “benefit a substantial and indefinite class of persons who are legitimate subjects of charity,” and relieve government of some of its burden. 10 Pa. Stat. §375 (a)-(f).

To fulfill the requirement of §375(d)(1) that a hospital “donate or render gratuitously a substantial portion of its services to benefit the community,” a hospital must satisfy one of seven standards. Six of these seven standards specify a minimum level of community benefits.

1. Providing goods or services to all who seek them without regard of their ability to pay if the institution a) has a written policy to this effect, b) has published this in a reasonable manner, and c) provides these uncompensated goods or services equal to at least 75% of net operating income, but not less than 3% of total operating expenses. 10 Pa. Stat. §375(d)(1)(i)(C).
2. Providing goods or services that are based upon the recipient’s ability to pay if a) the institution can demonstration implementation of a written policy and fee schedule based on individual or family income, b) at least 20% of the individuals receiving these goods or services pay no fee or a fee which is lower than the cost of the goods or services, c) at least 10% of the individuals receiving the goods or services receive a reduction in fees of at least 10% of the cost of the goods or services provided to them, and d) no individual pays a fee which is greater than or equal to the cost of the goods or services. 10 Pa. Stat. §375(d)(1)(ii)(B)-(D).
3. Providing wholly gratuitous goods or services to at least 5% of those receiving similar goods or services from the institution. 10 Pa. Stat. §375(d)(1)(iii).
4. Providing financial assistance or uncompensated goods or services to at least 20% of those receiving similar goods or services if at least 10% either paid no fees or paid fees accounting for 90% or less than the cost of the goods or services. 10 Pa. Stat. §375(d)(1)(iv).
5. Providing uncompensated goods or services which in the aggregate equal at least 5% of the institution’s cost of providing the goods or services. 10 Pa. Stat. §375(d)(1)(v).
6. Providing goods or services at no fee or reduced fees to government agencies or goods or services to individuals eligible for government programs if any one of the following applies:
1. The institution receives 75% or more of its gross operating revenue from grants or fee-for-service payments by government agencies and if the aggregate amount of government agency fee-for-service payments does not exceed 95% of the institution’s costs for providing goods or services to the individuals for whom the fee for services payments are made. 10 Pa. Stat. §375(d)(1)(vi).
2. This alternative (which does not specify a minimum level of community benefits) does not apply to nonprofit general hospitals.
7. Providing fundraising on behalf of (or grants to) an institution of purely public charity. 10 Pa. Stat. §375(d)(1)(vii). (This standard does not specify a minimum level of community benefit.)

Pennsylvania requires nonprofit hospitals to report community benefits annually.

Except for religious institutions, a nonprofit hospital or other institution of purely public charity that receives contributions of $25,000 or more per year or collects service revenues of $5 million or more per year must submit an annual report, including a copy of its federal tax return, to the state Bureau of Charitable Organizations. 10 Pa. Stat. §379.

Pennsylvania does not require nonprofit hospitals to perform community health needs assessments.

Pennsylvania does not require nonprofit hospitals to develop community benefit plans or implementation strategies.

Pennsylvania requires hospitals, including nonprofit hospitals, to adopt and implement financial assistance policies.

As a condition of receiving reimbursement from the state’s Uncompensated Care Program, hospitals must verify that they have a financial assistance policy in place under which the hospital: 1) accepts all individuals regardless of ability to pay for emergent medically necessary services; 2) seeks to collect claims only from the person(s) responsible for payment; 3) seeks to obtain health care coverage for patients, including assisting patients to apply for available public medical coverage; 4: ensures that emergency admission or treatment is not delayed or denied for monetary reasons; and 5) posts adequate notice of the availability of medical services and the obligations of hospitals to provide free services. Pa. Stat. §5701.1104(b). The Hospital & Healthsystem Association of Pennsylvania has also developed voluntary guidance on hospital financial assistance policies. Charity Care and Financial Aid Guidelines for Pennsylvania Hospitals (2004).

Pennsylvania requires all hospitals to post notices of the hospital’s obligation to provide charity care.

As a condition of receiving reimbursement from the state’s Uncompensated Care Program, hospitals must post adequate notice of the hospital’s obligation to provide free services. 35 Pa. Stat. §5701.1104(b)(5).

The voluntary guidance developed by the Hospital & Healthsystem Association of Pennsylvania also addresses the dissemination financial assistance policies. Charity Care and Financial Aid Guidelines for Pennsylvania Hospitals (2004).

Pennsylvania state law does not limit nonprofit hospital charges, billing, or collection practices.

However, the voluntary guidelines developed by the Hospital & Healthsystem Association of Pennsylvania offer a number of recommendations regarding hospital billing and collection policies including, among other things, offering reasonable patient payment plans and instituting legal action only when there is evidence that the patient has income or assets to meet his or her financial obligation. Charity Care and Financial Aid Guidelines for Pennsylvania Hospitals, p. 10 (2004).

Pennsylvania exempts from state income tax organizations that are exempt from federal income tax.

A corporation, trust or other entity that is an exempt organization under §501 of the Internal Revenue Code is exempt from Pennsylvania’s corporate net income tax. 72 Pa. Stat. § 7401(1)(iii)(3).

Pennsylvania Department of Revenue, Frequently Asked Questions.

Pennsylvania exempts institutions of purely public charity from state property tax.

All hospitals that are institutions of charity under the Pennsylvania Constitution and the Institutions of Purely Public Charity Act are exempt from state property tax. Mesivtah Eitz Chaim of Bobov, Inc. v. Pike County Board of Assessment Appeals, 615 Pa. 463, 44 A.3d 3 (Pa. 2012).

Pennsylvania exempts institutions of purely public charity from sales tax.

The sale [of personal property or services] at retail to or use by any charitable organization that has been granted exemption by the Internal Revenue Service is exempt from Pennsylvania sales tax. 72 Pa. Stat. § 7204(10). Pa. Rev-72–Application for Sales Tax Exemption.

Texas requires nonprofit hospitals to provide community benefits as a condition of state tax exemption.

Texas law requires that, in order to qualify as tax-exempt “charitable organizations,” nonprofit hospitals and hospital systems must provide “charity care and government-sponsored indigent health care” or “charity care and community benefits” in at least the amount specified in accordance with one of four alternative standards. Nonprofit disproportionate share hospitals, nonprofit hospitals in counties with a population of less than 58,000, and hospitals that exclusively provide free care are exempt from this requirement. Texas Tax Code Ann. §11.1801; Tex. Health and Safety Code Ann. §§311.043 & 311.045.

Texas law directs nonprofit hospitals, as a condition of tax exemption, to provide community benefits in accordance with one of three alternative community benefit standards. Two of these alternative standards specify a minimum level of community benefits that a hospital must provide.

A nonprofit hospital may qualify as a tax-exempt charitable organization by providing community benefits in an amount that satisfies one of the following standards:

(1) Charity care and government-sponsored indigent health care (shortfall) at a level that is “reasonable in relation to the community needs, as determined through the community needs assessment, the available resources of the hospital or hospital system, and the tax-exempt benefits received by the hospital or hospital system;”

(2) Charity care and government-sponsored indigent health care (shortfall) provided in an amount equal to at least 100 percent of the hospital’s or hospital system’s tax-exempt benefits, excluding federal income tax;

(3) Charity care and community benefits provided in a combined amount equal to at least 5 percent of the hospital’s or hospital system’s net patient revenue, provided that charity care and government-sponsored indigent health care are provided in an amount equal to at least 4 percent of net patient revenue. Texas Tax Code Ann.§§11.1801(a); Tex. Health and Safety Code Ann. §§ 311.031(2) & (8); 311.045.

Texas requires nonprofit hospitals to submit annual community benefit reports.

The Texas Department of Health requires that each nonprofit hospital submit an “annual report of its community benefit plan” that includes a specification of: the hospital’s mission statement; the health needs of the community considered in developing the hospital’s community benefit plan; the amount and types of community benefits actually provided; total operating expenses; and the hospital’s cost to charge ratio. Tex. Health and Safety Code Ann. § 311.046(a).

Texas requires nonprofit hospitals to perform community-wide health needs assessments.

Nonprofit hospitals are directed to seek input from representatives in the community, including the local health department, consumers, private business, insurance companies, and health science centers. Tex. Health and Safety Code Ann. §311.044(a)-(d).

Texas requires nonprofit hospitals to develop community benefit plans.

A nonprofit hospital’s community benefit plan must be an operational plan for serving the community’s health care needs as determined by a community-wide health needs assessment. The plan must include mechanisms to evaluate the plan’s effectiveness, measureable objectives to be achieved within a specified time frame, and a budget for implementing the plan. Tex. Health and Safety Code Ann.§311.044.

Texas requires nonprofit hospitals to have a financial assistance policy that incorporates specified eligibility criteria.

Each Texas nonprofit hospital must “develop, implement, and enforce” a written financial assistance policy. The policy must provide that patients who satisfy the statutory definitions of “financially indigent” or “medically indigent” are eligible for financial assistance. A “financially indigent” patient is one with income at or below 200 percent of the federal poverty level; a “medically indigent” patient is one who is unable to pay the remaining balance on hospital bills that, after payment by third-party payers, exceeds a percentage of the patient’s annual gross income (as specified in the hospital’s financial assistance policy). Tex. Health and Safety Code Ann. §§324.101, 311.031(11),(13).

Texas requires a nonprofit hospital to make information available to the public about its community benefit plan and its charity care program.

Texas law requires that a nonprofit hospital provide to each person seeking any health care service at the hospital a notice (in appropriate languages and in language readily understandable to the average reader) about the hospital’s charity care program, including its eligibility policies and how to apply for the program. The notice must be posted in prominent hospital locations, including the general waiting area, the emergency department waiting area, and the business office. A nonprofit hospital must also publish notice of its charity care policies annually in a local newspaper. Tex. Health and Safety Code Ann. §311.046(d).

Texas law requires hospitals to submit patient bills in a timely manner.

Texas law requires that medical providers submit their bills for medical services to patients and health plans in a timely manner. The law specifies the number of days within which billing must occur under various circumstances. Tex. Health and Safety Code Ann. §146.002. Claims billed in violation of these timeliness standards may be unenforceable against a patient who, had the billing been timely, would not have been obligated to pay. Tex. Health and Safety Code Ann. §146.003.

Texas does not levy a corporate income tax.

Texas exempts nonprofit hospitals from property tax if they provide medical care without regard to ability to pay, “which means they provide charity care and community benefits in accordance with Texas law.” Texas Tax Code Ann. §11.18(d)(1).

Texas exempts charitable organizations from state sales tax.

Texas law exempts from state sales tax organizations that are exempt from federal income tax under Internal Revenue Code §501(c)(3). Texas Tax Code Ann. §151.310(a)(2). Nonprofit hospitals that qualify for an exemption under that provision must provide community benefits that include charity care and government-sponsored indigent health care. Texas Tax Code Ann. §151.310(e).

Utah requires that nonprofit hospitals provide community benefits as a condition for property tax exemption.

Utah’s Property Tax Exemption Standards of Practice (Standards of Practice) require charitable institutions to contribute “something of value ... to the common good” as a “gift to the community … identified either by a substantial imbalance in the exchange between the charity and the recipient of its services or in the lessening of a government burden through the charity’s operation.” Utah County v. Intermountain Health Care, Inc., 709 P.2d 265, 269 (Utah 1985). These gifts may include: unreimbursed indigent care, medical discounts, community education and service, donations of time, donations of money, operation of critical services or programs that might not otherwise be available in the community, or the continued operation of hospitals at a loss. Each nonprofit hospital must establish a charity care plan and have an open access policy that permits indigent persons to receive needed services for no charge or for a reduced charge in accordance with their ability to pay. Standards of Practice, Appendix 2D, Standards III-V, (2014) pp. 32-34.

As a condition of property tax exemption, Utah requires a nonprofit hospital to contribute annual “gifts to the community” (community benefits) in an amount exceeding the value of its annual property tax liability in the absence of the exemption. Standards of Practice, Appendix 2D, Standard V, (2014) p. 33.

Utah requires community benefit reporting as a condition of property tax exemption.

Utah does not require nonprofit hospitals to conduct community health needs assessments.

A rebuttable presumption of compliance with the requirements for property tax exemption arises if the hospital: is governed by a Board composed of a broad-based membership from the community served by the hospital; confers at least annually with the county board of equalization about the community’s clinical needs that the hospital might appropriately address; and maintains a charity plan to ensure compliance with the Standards of Practice. Standards of Practice, Appendix 2D, Standard IV, (2014) p. 33.

Utah does not require nonprofit hospitals to develop community benefit plans or implementation strategies.

Utah requires nonprofit hospitals to adopt and implement financial assistance policies as a condition of tax exemption.

As a condition of property tax exemption, Utah requires nonprofit hospitals to develop an “open access policy” that provides for indigent persons receiving needed medical services for no charge or for a reduced charge in accordance with their ability to pay. Standards of Practice, Appendix 2D, Standard III (2014) p. 32.

Utah requires nonprofit hospitals to adopt and implement financial assistance policies.

As a condition of property tax exemption, a nonprofit hospital must “provide evidence of its efforts to affirmatively inform the public of its open access policy and the availability of services for the indigent.” Standards of Practice, Appendix 2D, Standard III, (2014) p. 32.

As a condition of property tax exemption, Utah limits what nonprofit hospitals may charge indigents who are unable to pay the charges ordinarily billed.

To qualify for property tax exemption, a nonprofit hospital must ensure that “indigent persons who, in the judgment of the admitting physician, require the service generally available at the hospital … receive those services for no charge or for a reduced charge, in accordance with their ability to pay.” Standards of Practice, Appendix 2D, Standard III, p. 32.

Utah law exempts nonprofit hospitals from state income tax.

Utah law exempts from state income tax organizations that are exempt from federal income tax under Internal Revenue Code §501. Utah. Code. §59-7-102.

Utah law exempts from taxation property owned by a nonprofit hospital that complies with the Standards of Practice.

Utah law exempts from state property tax nonprofit hospitals that satisfy the requirements of the Standards, including: adoption of an open access policy, informing the public of their charity plans and charity and discounted care policies, adoption of policies reflecting the public interest, and making annual “gifts to the community” in amounts that exceed their property tax liabilities in the absence of exemption. Standards of Practice, Appendix 2D, Standard III-V, (2014) pp. 32 – 34.

Utah exempts charitable institutions from sales and use tax.

Utah law exempts from state sales and use tax sales made to or by charitable institutions “in the conduct of their regular charitable … functions and activities.” Utah Code §59-12-104(8), Utah Code §59-12-104.1.