While millions of Americans suffer the consequences of medical debt, nonprofit hospitals do not provide charity care that amounts to the net benefit they receive from tax exemption.
Key points
– Nationally, nonprofit hospitals receive a federal income tax exemption so long as they provide a benefit to the community, as defined by Section 501(c)(3) of the Internal Revenue Code.
– Texas nonprofit hospitals receive a state property tax exemption in exchange for providing charity care to their community.
– Compared to for-profit hospitals, Texas nonprofit hospitals provide less charity care to the community—despite benefitting from a tax-exempt status.