Officials with North Arkansas Regional Medical Center in Harrison say they are ready if Boone County officials appeal a tax exemption lawsuit ruling to the supreme court.
The Harrison Daily Times reports the ruling this week follows the hospital requesting tax exempt status on seven parcels of property North Arkansas Medical Services, Inc. purchased, including the Millenium Building. The building houses Mediquick, formerly owned by two physicians as a private facility.
Boone County Assessor Karen Hardesty denied the hospital’s request, saying the building did not meet the qualifications of a charitable exemption. In making her decision, Hardesty also cited the Arkansas Constitution, saying though the hospital had been designated a 501(c)3, the designation did not automatically exempt it from property taxes.
In hearings, Hardesty and county civil attorney Ron Kincade of Mountain Home argued even though the hospital does offer some charity care, it still bills patients if its determined they have any means to pay for services.
Her decision was appealed to the equalization board and Boone County Court, both of which upheld her decision.
The matter was then appealed to Boone County Circuit Court, where retired Circuit Judge Russell Rogers was appointed to hear the appeal in June.
In testimony at the June hearing, Kelly Cunningham, controller at Baxter Regional Medical Center, was called as a witness for NAMS and asked to describe the Fairlamb Senior Health Clinic.
Cunningham said Fairlamb is run by the hospital on property it owns across the street from BRMCs main campus, calling it a department of the medical center.
She testified BRMC does pay property taxes on some other property it owns, but not on the hospital or the Fairlamb clinic.
Judge Rogers ruled the treatment of the Fairlamb clinic in Baxter County as tax exempt also undercuts the assertion the seven parcels owned by NARMC should be treated differently.
Vince Leist, CEO/President of NARMC, says hospital officials believe Judge Rogers’ decision impacts all 501(c)(3) organizations in the Harrison community, not just the medical center. In a statement he said the county assessors position on this issue would have made many local not-for-profit 501(c)(3) organizations subject to tax. If the county assessor could tax the hospital, then she could easily tax local non-profits.
Leist said the decision could be appealed to the supreme court.
In the statement, Little Rock lawyer John Baker, who represented NARMC, said, “If the county decides to appeal this ruling, which is certainly their right, we will look forward to proving our case to the high court.”
Kincade said Hardesty is in the process of researching the efficiency of such an appeal.
However, the case could set precedent for any future similar cases, and a formal ruling by the high court could finally settle the matter.
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