Advocacy Issue: Tax-Exempt Status

The mission of all hospitals and health systems, regardless of size and type of ownership, is to care for their patients and communities. Nonprofit hospitals with tax-exempt status make up the majority of the U.S.’s community hospitals and often go above and beyond to advance health by meeting the unique needs of their communities. In addition to providing financial assistance to those in need, they play a critical role in providing essential care and services tailored to the unique needs of their communities.

Beyond offering 24/7 emergency, acute, and chronic care, nonprofit hospitals reinvest in the communities they serve. They proactively work to improve health and wellbeing for patients, supporting initiatives to make communities healthier and investing in research, medical innovation, and workforce development.

AHA Position

Hospitals and health systems provide benefits to their communities that far outpace any other sector in health care. Many hospitals are exempt from federal and some state and local taxes. For that privilege, they annually report the range of benefits and services they provide to their communities to the IRS. Hospitals more than earn their tax exemption, in part because of the immense benefits they provide to the communities they serve. A recent analyses shows that nonprofit hospitals and health systems provided $10 in benefits to their communities for every dollar of federal tax exemption, and contributed an estimated $149 billion in total community benefit