Charitable Organizations
In recognition of their charitable contributions to the community, the Internal Revenue Service (IRS) does not require charitable organizations—such as libraries, museums, universities and non-profit hospitals—to pay federal income taxes, as described in Internal Revenue Code (IRC) Section 501(c)(3).
As a charitable organization, each hospital must promote health as its charitable purpose, measured by a community benefit standard. The IRS will consider any combination of the following factors, including whether the hospital:
- Operates a full-time emergency room that provides treatment regardless of ability to pay
- Provides non-emergency services to Medicare and Medicaid beneficiaries
- Has an open medical staff, consistent with the size and nature of the hospital
- Has a governing board that includes independent civic leaders drawn from the community
- Serves a broad cross section of the community through medical training, education and research programs
- Has a formal charity care policy
Tell Your Local Legislators the Tax Hurts You
March 3, 2010:
OHA created templates letters for CEOs as well as hospital/health system employees to let local legislators know they are angry the hospital is paying a tax to the state when it could be using those funds to hire staff or expand the local economy. With a few simple clicks, the letters can be e-mailed or printed and mailed to local legislators.
View template letter from CEOs
View template letter from hospital/health system employee