A Waukesha County Circuit Court judge has ruled that nonprofit health care provider ProHealth Care is liable for about $12,000 in property taxes on various equipment in its corporate headquarters.
Judge Michael O. Bohren found that the city of Pewaukee could collect taxes on equipment at the corporate headquarters because it helped support the system’s for-profit operations that do not qualify as benevolent organizations.
The system had sought an exemption on about $1 million worth of equipment, arguing that the equipment primarily supported operations at the nonprofit hospitals and not its for-profit ventures, such as a fitness center.
“Though organizations do not have to be charities to qualify as benevolent, they must serve a public purpose in order to be relieved of their tax burden,” the ruling read.
ProHealth is not expected to appeal the ruling, according to published reports. The system was created a decade ago by the merger of Waukesha Memorial Hospital and Oconomowoc Memorial Hospital.
State and local governments across the country have been escalating attempts to challenge the tax exemptions granted to nonprofit health care systems that also face increasing federal scrutiny.