State Supreme Court finds Backus Hospital owes personal property taxes in Stonington
Jul. 25—A state Supreme Court decision in a case pitting Backus Hospital against the Town of Stonington sheds some light on the property tax burden borne by ever-expanding health care systems.
Earlier this month, the high court reversed a trial court ruling that Backus is exempt from taxes on personal property it owns in an office suite it leases from Hartford HealthCare in the Hartford Healthcare Health Center at 100 Perkins Farm Drive in Mystic.
Backus had filed a lawsuit over the town Board of Assessment Appeals' 2020 denial of its application for an exemption from personal property taxes on furniture and equipment used in providing outpatient medical rehabilitation services. The personal property taxes assessed on the grand lists of 2020 and 2021 came to $12,433 ― an amount Backus paid under protest pending the outcome of the court case ― Stonington's director of assessment, Jennifer Lineaweaver, said in February.
Stonington appealed Superior Court Judge John Cordani's Oct. 7, 2022, ruling granting the hospital's request for summary judgment.
In its decision, which Chief Justice Richard Robinson wrote, the Supreme Court considered whether state law enacted in 2015 to address the property tax implications of major health care systems' takeover of hospital-based medical facilities and medical practices around the state applies to personal property located on real property leased ― but not purchased ― by a health care system.
The court, Robinson wrote, agreed with the town's argument that the Backus rehabilitation facility had been "acquired" by Hartford HealthCare in a way that negated the charitable and hospital tax exemptions to which Backus otherwise would be entitled.
While the high court "remanded" the matter to Superior Court, its unanimous decision "should effectively end the case," New London attorney Lloyd Langhammer, who represented Stonington, said Thursday in an email.
"The decision clarifies the limited scope of exemptions available to health care systems ...," Langhammer wrote. "With the constant expansion of health care systems this decision serves to limit their ability to shift the burden to individual taxpayers rather than have these multi-billion corporations bear their fair share of taxes."
The Connecticut Conference of Municipalities, a nonprofit organization of local officials, had filed a friend-of-the-court brief in Superior Court in support of Stonington's position. The CCM said it was interested in the case "because it concerns municipal authority to tax certain real and personal property."
In its brief, the CCM contended Judge Cordani "improperly construed" the 2015 law the legislature enacted to limit the ability of large health systems to qualify for municipal tax exemptions.
