Update on Tower Health’s Chester and Montgomery County Real Estate Tax Exemption Appeals
December 15, 2023
Publications
On October 16, 2023, the Pennsylvania Supreme Court granted Tower Health’s Petition for Allowance of Appeal related to the Montgomery County hospital property. The Supreme Court is going to address the following two issues on appeal:
- Whether the Commonwealth Court erred by holding that Pottstown Hospital, LLC, offered substantial executive compensation based upon the financial performance of the institution, thereby precluding it from establishing that it was operating entirely free from private profit motive to qualify as a purely public charity entitled to real estate tax exemption under the standard set forth in Hospital Utilization Project v. Commonwealth (“HUP”), 487 A.2d 1306, 1317 (Pa. 1985).
- Whether the operation of entities related to Pottstown Hospital, LLC, is relevant to a determination of whether it qualifies as a purely public charity under the HUP test.
Tower Health’s Supreme Court brief and reproduced record are due on December 27, 2023. We will keep you updated as this very important case for nonprofit organizations seeking real estate tax exemption in Pennsylvania makes its way through the Pennsylvania Supreme Court.
On December 5, 2023, the Pennsylvania Supreme Court issued an Order denying Tower Health’s Petition for Allowance of Appeal related to the three Chester County hospital properties. Accordingly, the Chester County hospitals are all taxable for real estate tax purposes pursuant to the Commonwealth Court’s affirmance of the trial court’s determination that Tower Health was not an institution of purely public charity. Unlike the Montgomery County hospital appeal, the Commonwealth Court actually dismissed all three Chester County appeals because all of the issues on appeal were waived for failure to comply with Rule 1925(b) of the Pennsylvania Rules of Appellate Procedure. Thus, the Chester County appeals contained procedural issues that I am sure the Supreme Court did not want to address.
Please contact Paul Morcom, Esq. at 717-237-5364 or Adam Koelsch, Esq. at 717-237-5305 if you have any questions regarding the “purely public charity” exemption in Pennsylvania.
