Could you lose your property tax exemption?

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Abstract: A recent ruling from the New Jersey Tax Court in AHS Hospital Corp. v. Town of Morristown provides a powerful example of how a hospital can lose its property tax exemption if it engages in certain financial practices. This article discusses the pertinent issues of the case and the court’s exemption analysis, noting that the analysis focused mainly on the hospital’s operations rather than the charitable benefits it provided the community. A sidebar looks at recent IRS guidance on how to determine whether executive compensation is reasonable. AHS Hospital Corp. v. Town of Morristown, No. 010900-2007, N.J. Tax Court, 2015