Cottonwood Hospital Medical Center, Alta View Hospital and Intermountain Health Care InstaCares have formally appealed to the state Tax Commission a 1987 decision that denied their traditional exemption from property taxes.
IHC made the appeal Monday.While defending their decision to tax the hospitals, Salt Lake County commissioners said Tuesday they hope the Tax Commission can develop standards that will make it easier to judge the hospitals in the future.
"I still think we ruled on the side of leniency," said Commissioner Dave Watson. "There is only one truly charitable hospital, and that's Shriners."
Last October, county commissioners denied property tax exemption to the two IHC hospitals as well as St. Mark's Hospital, Holy Cross Jordan Valley Hospital, Holy Cross's Magna Clinic and IHC InstaCares all not-for-profit medical facilities that were previously exempted from paying property taxes.
Those facilities retaining their tax-exempt status are Holy Cross Hospital, Primary Children's Medical Center, Shriner's Hospital, LDS Hospital, Wasatch Canyons Hospital and St. Joseph's Villa.
County commissioners issued their written decision on April 1. Monday was the last day the medical facilities could appeal.
"We know that the county commissioners struggled with this issue, and we recognize the confusion caused by a lack of objective standards in Utah," said Jack F. DeMann, volunteer trustee at Cottonwood. "But we disagree with their decision in several areas and feel it's important to seek a clarification with the Tax Commission for all concerned. This will ultimately help the commissioners and all the hospitals in the future."
Gordon Johnson, volunteer chairman of the board of trustees at Alta View added, "Our hospitals demonstrate their charitable nature every day when we treat people who cannot pay for their treatment, when we educate people about their health, when we provide free and low-cost medical testing at health fairs and the like, and when we train medical personnel."
Specifically, the hospitals disagree with the commissioners' decision in these areas:
Restricting the definition of the phrase "charitable purposes" to the care or relief of indigent persons;
Failing to consider all of the ways the hospitals benefit the community, such as free public education and health screening;
Holding that charitable service to indigents must be funded exclusively from private philanthropy; and
Failing to give the hospitals notice of the substantive standards for the judging of their applications.
Commissioners agree the standards need to be clarified.
"We're getting mixed decisions around the state," said Commissioner Mike Stewart. Salt Lake County was the only county in the state that decided to tax non-profit hospitals last year.
"Maybe the result (of the appeal) will be some clarification legislation."
IHC officials said in last year's application, Cottonwood and Alta View showed $3.16 million and $740,000, respectively, in gifts to the community through charity care, discounts for government-sponsored patients, community health screenings, community and medical professional education among other things.
This, they said, was substantially greater than their respective property tax burdens of $432,000 and $183,000.
Both Alta View and Cottonwood are not-for-profit hospitals governed by local people who volunteer their time to serve as trustees.