The last time there was a significant push by taxing authorities to challenge the tax-exempt status of hospitals in Pennsylvania was three decades ago. Pittsburgh is now conducting a review of tax-exempt property.

Ashad Hajela | March 13, 2023

HARRISBURG — A Commonwealth Court judge recently revoked a Southeastern Pennsylvania hospital’s property tax exemption and denied appeals regarding three others, decisions that one expert said should serve as a “warning shot” for nonprofit facilities statewide.

In response to a case brought by the Pottstown School District, Judge Christine Fizzano Cannon found that the nonprofit Tower Health system was operating a Montgomery County hospital with the motive of profit. She also upheld rulings that three Chester County hospitals owned by Tower Health aren’t eligible for property tax exemptions.

In Pennsylvania, a nonprofit organization must prove it is a “purely public charity” to qualify for a property tax exemption. The state Supreme Court in a 1985 ruling created five standards. An organization must show it:

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