The Tax Benefits of Not-for-Profit Hospitals

摘要: This paper investigates three special tax provisions for not-for-profit (NFP) hospitals. First taxes -- both income and property taxes. Second, they issue tax-exempt bonds so lenders do not pay on interest received. Third, donors deduct charitable contributions from their bases. The rationale these policies is that the NFP hospitals provide community benefits, definition of which often loosely-specified. value capital exemptions depends intensity hospitals, taxes, hospitals' profitability. For 1995, aggregate exemption $4.6 billion; median hospital receives benefits 1.8 percent total assets. exemption, we estimate an $1.7 billion. varies across depending state local asset mix. Tax-exempt deductible are concentrated among larger Only 19.7 had outstanding debt in 1994. Almost half existing bond could be replaced by using endowments; calculate annual benefit $354 million bonds. contributions, roughly four receive 71 contributions. We lost revenue $1.1 billion