Lebanon's board of assessors voted last week that the Dartmouth-Hitchcock Medical Center should no longer qualify as a charity under state law, a decision that could cost DHMC $6 million in property taxes.
This large amount of money would lower the tax rate in Lebanon by 21 percent, saving residents hundreds of dollars each year.
But taxpayers will not notice the change immediately because the city will not get the money until all appeals of the decision have been exhausted.
DHMC will most likely challenge the decision in court.
Since 1991, when DHMC moved to Lebanon from Hanover, it has received tax exemptions because it qualified as a charity and an educational institution.
A study conducted by Lebanon attorney Adele Fulton led to the change. Fulton reviewed numerous documents about the various corporate aspects of the DHMC, according to the Associated Press.
Although the study cost the city $45,000, City Finance Director Len Jarvi told the Valley News that the city has spent more money on other legal fights with Wal-Mart and Costco.
Although Vice President of Regional Planning for DHMC Stephen Marion declined to comment for this article, he told the Associated Press that the decision will be contested.
The DHMC had received exemptions for seven years, but the Lebanon city board is more informed now because of the new study, board member Reuben Cole said at a board meeting earlier this month, according to the Valley News.
"Any benefits the public may receive from DHMC are too remote to be considered charitable -- it is not a charity," Fulton wrote in her report.
Cole said the Medical School itself would have to own its property in order to qualify for the tax exemption. Currently, Hitchcock Clinic Inc., a for-profit corporation that employs the practicing physicians, owns the land, according to the Valley News.
"It appears that the Clinic is a non-profit facade for the for-profit HCI," Fulton wrote in the report. "There is no apparent difference between the operations of the Clinic/HCI and operations of private for-profit physician practices."
Cole told the board that the decision would most likely end up being appealed and in court, according to the Valley News.
