Business
Cleveland Clinic loses tax-exempt case
NEWS IN BRIEF — Posted Dec. 5, 2005
An outpatient clinic and surgery center run by the Cleveland Clinic is not entitled to the same tax exemption enjoyed by its owner, a tax commissioner ruled.
Even though the Beachwood Family Health and Surgery Center is affiliated with a tax-exempt hospital and may funnel patients there, there is "minimal, if any," charity care on site at the clinic, Ohio Tax Commissioner William Wilkins wrote in an Oct. 20 final determination.
The decision could force the Cleveland Clinic to pay $2.7 million in taxes, penalties and interest, said the Beachwood school district, which stands to net about 65% of the assessment.
The Cleveland Clinic, which plans to appeal the decision, strongly defended its position that the Beachwood facility is an integral part of a broader charitable system.
The dispute has arisen at a time when hospital tax exemptions are increasingly under scrutiny, with scores of lawsuits challenging if the institutions fulfill their charitable missions and regulators closely examining hospital operations and relationships.
Note: This item originally appeared at http://www.ama-assn.org/amednews/2005/12/05/bibf1205.htm.
