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House Bill 110 — Property taxes, hospitals

House Bill 110 — Property taxes, hospitals

Parrish Miller
February 13, 2023

Bill Description: House Bill 110 would allow county boards of equalization to decide if nonprofit hospitals will receive a property tax exemption. 

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Does it directly or indirectly create or increase any taxes, fees, or other assessments? Conversely, does it eliminate or reduce any taxes, fees, or other assessments?

Idaho law allows nonprofit hospitals to be exempt from property taxes. The exemption extends to their "acute care, outreach, satellite, outpatient, ancillary or support facilities" even when those individual facilities would not "independently satisfy the definition of hospital."

Allowing doctors' offices and clinics owned by a hospital to receive a special tax exemption gives them an unfair financial advantage over similar, privately owned facilities. Even worse, private facilities must pay higher property taxes to subsidize their competition.

House Bill 110 would amend Section 63-602D, Idaho Code, to make the property tax exemption for nonprofit hospitals and their other facilities optional and at "the discretion of the board of equalization for the county in which the property lies." 

A county that opts to eliminate this exemption would take a step toward leveling the playing field between for-profit and nonprofit entities. It would also indirectly reduce the property taxes of all property owners in the same taxing district as the facilities losing their exemption.

Unfortunately, House Bill 110 doesn't eliminate or reduce the exemption. It merely gives county boards of equalization that option, meaning that it could have no positive results. In addition, the bill is ripe for cronyism, encouraging nonprofit hospitals to play politics and seek favorable terms from county government. 

Some counties might even use a tax exemption as a way to compete for a hospital or its facilities, even though such incentives end up being funded by other taxpayers. 


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