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October 18, 2017

Harrison Hospital Fights Assessor’s Tax Ruling


North Arkansas Medical Services Inc. of Harrison has appealed the Boone County assessor’s decision not to grant tax-exempt status for one of its medical clinics.

The nonprofit NAMS asked that its Family Medicine Clinic, which is on the campus anchored by a 108-bed hospital, be given tax-exempt status because it is being used for nonprofit purposes such as medical services, educational activities and promoting health. The June 28 request was denied on June 30 by Boone County Assessor Karen Hardesty.

It has appealed her decision to the County Court of Boone County, which is the first step in the appeals process. The county judge’s ruling then could be appealed to Boone County Circuit Court.

Hardesty referred questions to her attorney, Ronald Kincade of Mountain Home.

Kincade said that just because the property is owned by a nonprofit charity or a public entity doesn’t mean that it’s automatically exempt from taxation.

He said that the property is being used as a doctor’s office and is operated by the hospital, North Arkansas Regional Medical Center. But Kincade said, the hospital doesn’t own the property — NAMS does.

NAMS acquired the property in 2013 and it’s been on the tax rolls since then, Kincade said. NAMS “asked for it to be exempted, but [Hardesty] didn’t think it met the criteria,” Kincade said.

Kincade said the tax bill is about $7,000 a year.

The hospital reported $95.8 million revenue and $1.3 million income for its fiscal year that ended March 31, 2014, according to its most recent IRS 990 form. For the previous year, it had $93.6 million in revenue and $3.8 million in income.

NAMS said in its court filing that any profit from the clinic goes toward maintaining the hospital and “extending and enlarging its charitable purposes.”

The clinic also has treated patients even if they couldn’t pay their bill, according to the filing by North Arkansas’ attorney John Baker of Mitchell Williams Selig Gates & Woodyard of Little Rock.

Baker said in the filing that “the Arkansas constitution requires exemption from taxation of all ‘buildings and ground and materials used exclusively for public charity.’”

Baker declined to comment because of the pending litigation.

NAMS Regional wants Boone County Judge Robert Hathaway to say that the property is exempt from taxation. It also wants Hardesty to file with the county clerk a list that shows the property’s tax-exempt status and its reason for the exemption.

The assessor has asked that the case be dismissed. “We want to follow the law, and we think we’re following the law,” Kincade said. “Hopefully, we’ll get this thing resolved.”

A court date has not been set.

North Arkansas Medical Services Inc. of Harrison has appealed the Boone County assessor’s decision not to grant tax-exempt status for one of its medical clinics.

The nonprofit NAMS asked that its Family Medicine Clinic, which is on the campus anchored by a 108-bed hospital, be given tax-exempt status because it is being used for nonprofit purposes such as medical services, educational activities and promoting health. The June 28 request was denied on June 30 by Boone County Assessor Karen Hardesty.

It has appealed her decision to the County Court of Boone County, which is the first step in the appeals process. The county judge’s ruling then could be appealed to Boone County Circuit Court.

Hardesty referred questions to her attorney, Ronald Kincade of Mountain Home.

Kincade said that just because the property is owned by a nonprofit charity or a public entity doesn’t mean that it’s automatically exempt from taxation.

He said that the property is being used as a doctor’s office and is operated by the hospital, North Arkansas Regional Medical Center. But Kincade said, the hospital doesn’t own the property — NAMS does.

NAMS acquired the property in 2013 and it’s been on the tax rolls since then, Kincade said. NAMS “asked for it to be exempted, but [Hardesty] didn’t think it met the criteria,” Kincade said.

Kincade said the tax bill is about $7,000 a year.

The hospital reported $95.8 million revenue and $1.3 million income for its fiscal year that ended March 31, 2014, according to its most recent IRS 990 form. For the previous year, it had $93.6 million in revenue and $3.8 million in income.

NAMS said in its court filing that any profit from the clinic goes toward maintaining the hospital and “extending and enlarging its charitable purposes.”

The clinic also has treated patients even if they couldn’t pay their bill, according to the filing by North Arkansas’ attorney John Baker of Mitchell Williams Selig Gates & Woodyard of Little Rock.

Baker said in the filing that “the Arkansas constitution requires exemption from taxation of all ‘buildings and ground and materials used exclusively for public charity.’”

Baker declined to comment because of the pending litigation.

NAMS Regional wants Boone County Judge Robert Hathaway to say that the property is exempt from taxation. It also wants Hardesty to file with the county clerk a list that shows the property’s tax-exempt status and its reason for the exemption.

The assessor has asked that the case be dismissed. “We want to follow the law, and we think we’re following the law,” Kincade said. “Hopefully, we’ll get this thing resolved.”

A court date has not been set.

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