A state appeals court ruled that 728-physician Marshfield (Wis.) Clinic is not entitled to a property tax exemption for three clinics in Eau Claire, Wis., because the exemption had not been used exclusively for benevolent purposes. Marshfield said it would appeal the decision to the state Supreme Court. The ruling by Wisconsin's 3rd District Court of Appeals in Wausau upheld a 2002 Circuit Court decision. The clinic, the state's largest physician group with an annual operating budget of $498 million, has a federal tax exemption and received tax-exempt status from Wisconsin's revenue department in 1988. Eau Claire, however, challenged the exemption, and several other communities also have sued Marshfield for property taxes.
The appeals court ruled that the provision of medical care, however laudable, isn't always benevolent and pointed out that 97% of Marshfield's patients pay directly or through insurance. "Marshfield provides absolutely no itemized documentation of how much of the property's use is dedicated to research, education, patient care for destitute patients and patient care for paying patients," the judges wrote. Marshfield Executive Director Reed Hall said, "We don't think the courts have given enough deference to the state administrative agency. We think that this case has big national potential for not-for-profit organizations." -- by Mark Taylor