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
OHA's 2010 community benefit report outlines the $2.6 billion Ohio hospitals provide.
There is good news on the real estate tax exemption front for Ohio hospitals and other health care providers! The Ohio Tax Department has begun to apply the standards articulated in Dialysis Clinic, Inc. v. Levin, 2010-Ohio-5071 (decided in October of 2010) to clear the substantial backlog of pending hospital exemption applications. Read OHA's whitepaper discussing the Recent Developments in Property Tax Exemption.
OHA Media Statement - President Barack Obama FFY 2013 Budget
February 15, 2012:
Earlier this week President Barack Obama’s administration released the FFY 2013 federal budget spending and policy targets. The package proposes a total of $364 billion in health savings over ten years, including $268 billion in Medicare provider cuts and $51 billion in Medicaid cuts. After review of this budget, OHA has made this initial statement:
“Ohio hospitals strongly believe all critical aspects of the health care system must be adequately supported, without undercutting some segments to provide for others. In the federal budget proposal submitted by President Obama, programs that provide training for future physicians, assure access to care in rural communities and support health care for the low-income seniors, families and children are all put at risk. As Congress begins to review this budget and addresses more immediate concerns with physician payment cuts, unemployment compensation and payroll taxes, hospitals welcome the opportunity to demonstrate how proposed budget cuts could have unintended consequences of health care job losses and reduced access to care,” said Mike Abrams, president and CEO of the Ohio Hospital Association.
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