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House Bill 246 — Hospital property tax exemptions

House Bill 246 — Hospital property tax exemptions

Parrish Miller
March 2, 2023

Bill Description: House Bill 246 would limit the kinds of properties that are exempt from taxation because they are owned by a nonprofit hospital.

Rating: +1

NOTE: House Bill 246 is similar to House Bill 109, introduced earlier this session, but House Bill 246 would not be as beneficial to taxpayers as the original version.

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 currently grants nonprofit hospitals an exemption from paying property taxes. Exemptions include taxes on these hospitals’ "acute care, outreach, satellite, outpatient, ancillary or support facilities." Even properties that would not "independently satisfy the definition of hospital" can receive an exemption.

House Bill 246 would amend Section 63-602D, Idaho Code, by striking “acute care, outreach, satellite, outpatient, ancillary or support facilities” from the list of exempt properties. It also limits the definition of a hospital to what is found in chapter 13, title 39, Idaho Code. The bill also strikes language allowing property that "is being prepared for use as a hospital" to be tax exempt. 

House Bill 246 further stipulates that property "losing an exemption under this section shall not be included on any new construction roll prepared by the county assessor pursuant to section 63-301A, Idaho Code."

By eliminating this special property tax exemption for clinics and other facilities that are not part of a hospital, House Bill 246 would indirectly reduce the property taxes of property owners in the same taxing district as the facilities losing their exemption. 


Does it increase government redistribution of wealth? Examples include the use of tax policy or other incentives to reward specific interest groups, businesses, politicians, or government employees with special favors or perks; transfer payments; and hiring additional government employees. Conversely, does it decrease government redistribution of wealth?

Allowing doctors' offices and clinics owned by a hospital to receive a special tax exemption gives them an unfair financial advantage compared to similar facilities that are privately owned. Eliminating this exemption helps to level the playing field and stops forcing private facilities to pay more in taxes to subsidize their competition. 


Does it violate the principles of federalism by increasing federal authority, yielding to federal blandishments, or incorporating changeable federal laws into Idaho statutes or rules? Examples include citing federal code without noting as it is written on a certain date, using state resources to enforce federal law, and refusing to support and uphold the Tenth Amendment. Conversely, does it restore or uphold the principles of federalism?

Unlike with House Bill 109, House Bill 246 would expand the definition of hospital under this section to include "facilities designated by the centers for medicare and medicaid services as critical access hospitals, rural health clinics, or federally qualified health centers." 

This addition not only reduces the potential benefit of this bill to property taxpayers, but it also gives the federal government the ability to alter the scope of Idaho tax policy through current or future designations. 

Idaho law should not be based on federal designations, especially unknown future designations that may run counter to the principles and policies of the state of Idaho. 


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