The Charity Care Requirement for Hospital Property Tax Exemptions

The trial court found that ‘‘[s]services provided to private
pay[ing] patients . . . are simply not charitable services . . .
.’’ Both the town and the court seem to equate the term
‘‘charitable’’ with ‘‘free,’’ and conclude that the
acceptance of private paying patients renders the Center’s
purpose not exclusively charitable. We do not agree. The
trial court’s conclusion that merely charging a fee to those
who have the means to pay renders the Center’s purpose
not exclusively charitable is not in keeping with our
precedents, and is belied by the realities of the modern
health care system.
This court never has held that accepting payment or
charging a fee, without more, alters the character of a
charitable or otherwise tax-exempt organization. In Yale
University v. New Haven, 71 Conn. 316, 42 A. 87 (1899),
we declared what common sense requires: ‘‘A church is
none the less a church, because the worshippers contribute
to the support of services by way of pew rent. A hospital is
none the less a hospital, because the beneficiaries
contribute something towards its maintenance. And a
college is none the less a college, because its beneficiaries
share the cost of maintenance . . . .’’ Id., 328. Likewise, a
charitable, nonprofit nursing home is no less charitable
simply because some patients pay for all or part of the cost
of their care.
Ultimately, the Court denied exemption because of a deviation between the Center’s
charter and its activities. (The Center provided rehabilitative care, which was an activity
that was found not to be set forth in its charter as one of its charitable purposes.)
Presumably the Center can secure an exemption by amending its charter or limiting its
rehabilitative care program. In any case, the Court’s analysis of the effect of private pay
for the services rendered differs from the approach taken by the Illinois appellate court in
Provena. The Court in St. Joseph’s applied an analysis of the overall nature of the
activities of the property owner in contrast to an analysis of one factor--the amount of
free or discounted care.
IV.
Charitable Exemption for Medical Facilities in Other States
A. Case Law
1. Utah—Intermountain Health Care
In 1985, the Supreme Court of Utah rendered a decision that has been influential
thereafter. Utah County v. Intermountain Health Care, Inc. 709 P.2d 265 (Utah 1985).
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