On October 26, 2010, the Supreme Court of Ohio affirmed the decision of the Board of Tax Appeals (“BTA”) to deny a property tax exemption application that a non-profit organization filed as to one of the dialysis clinics (“the Clinic”) that it operated. The property owner—DCI—failed to prove that it provided any free charity care at the Clinic.

While the Court rejected DCI’s exemption application in this case, the Court’s holding reinforces the proposition that property that hospitals use to provide some free or reduced-rate charity care may enjoy property tax exemption in Ohio. The Court rejected the Tax Commissioner’s suggestion that hospitals and clinics must offer a certain threshold amount or percentage of care in order to achieve exemption. The Court also rejected DCI’s argument that its property should enjoy exemption under Ohio law simply because DCI was a non-profit organization that enjoyed federal income tax exemption.

The Court’s rejection of the Tax Commissioner’s argument that clinics and hospitals must meet a threshold level of charity care to receive property tax exemption reinforces the proposition that hospitals and other charitable healthcare providers may achieve exemption for facilities where they provide some level of charitable medical care, even as they continue to seek Medicare and Medicaid reimbursement for much of the care that they provide.

The case may be cited as Dialysis Clinic, Inc. v. Levin (Oct. 26, 2010), ___ Ohio St. 3d ___, 2010-Ohio-5071.