Illinois – Hospital Exemption Enacted

SALT Report 1581 – The Illinois General Assembly recently enacted legislation that creates a sales tax exemption for hospitals.  Effective June 14, 2012 tangible personal property sold to, or used by a hospital that is licensed under the Hospital Licensing Act or operates under the University of Illinois Hospital Act, or an affiliate hospital that is not already exempt from sales and use tax and meets the exemption requirements, may qualify for an exempt from sales tax, use tax, service occupation tax (SOT) and service use tax (SUT).
Qualifying hospitals will be eligible for the sales and use tax exemption if the value of services or activities performed by the hospital equals or exceeds the hospital’s estimated property tax liability for the calendar year in which the exemption is requested.
Hospitals must be involved in one or more of the following services to qualify for the exemption:
  • Charity care,
  • Health services to low-income and under-served individuals,
  • Subsidy of state or local governments,
  • Support for state health care programs for low-income individuals,
  • Dual-eligible subsidy, or
  • Any other activity that the department determines relieves the burden of the government or addresses the health of low-income or underserved individuals

In a multi-state hospital system, only services that occur in Illinois will be eligible for the exemption.

For Further Information:

Illinois State Legislature – Public Act 97-0688