Pennsylvania Court Rejects Property Tax Exemptions For Four Non-Profit Hospitals

The Pennsylvania Commonwealth Court recently ruled that four non-profit hospitals in northeastern Pennsylvania owned by Tower Health LLC (Tower Health) were not exempt from local property taxes. Although Tower Health purchased the facilities to run them as non-profit entities, they were actually operated as limited liability companies with Tower Health as the sole shareholder.

After being acquired, the four hospitals (Pottstown Hospital, Phoenixville Hospital, Brandywine Hospital, and Jennersville Hospital) paid Tower Health $1 million to $21 million annually for management fees, central business office fees, and bond issue interest payment obligations.

The ruling noted that Tower Health did . . .