The Dartmouth Hitchcock Medical Center paid over $6 million in taxes from its savings account to the city of Lebanon on Monday, but it plans to fight to get the money back.
DHMC was required to pay this money as part of its 1997 property tax bill, after its application for a charitable tax exemption was denied last month by the Lebanon Board of Assessors. The decision also applies to the Hitchcock Clinic, Mary Hitchcock Hospital and the Dartmouth Medical School.
DHMC spokesperson Laurie Storey-Manseau said DHMC will file an appeal within the next month to try to retrieve the money.
"We are paying the bill simply to protect our rights," she said. "DHMC is a charitable institution in every sense of the definition."
However, Lebanon attorney Adele Fulton called the center a "non-profit facade for the for-profit Hitchcock Clinic Inc.," in a report on the taxable status of DHMC.
Lebanon had granted DHMC property tax exemption since the medical facility moved there in 1991.
City finance director Len Jarvi said the money DHMC paid will not be spent, but will be held in a bank until the appeals process is over since the money is not appropriable.
Depending upon the length of the appeals process, it might remain in that state for years, according to Jarvi.
Even if the Board of Assessors decision is upheld in Superior Court, another appeal will likely be filed, and the case could be settled in the New Hampshire Supreme Court, possibly many years in the future.
"We'd like them not to appeal," Jarvi said.
If the money is eventually appropriated to the city of Lebanon, it could have a profound impact, Jarvi said.
One of the greatest effects would be a tax rate relief, which could lower Lebanon residents' taxes by as much as 21 percent. In addition, if the decision is upheld, Lebanon could rely on a consistent tax revenue from DHMC to help with the city's improvement costs that are yearly over $1 million.
But since the appeals process has yet to begin, Jarvi said, "It's a tad bit premature to speculate."
The medical center has until November 25 to file an appeal, either with the state Board of Tax and Land Appeals or in New Hampshire Superior Court.
Another court battle will likely take place over DHMC's 1998 property tax bill if the Board of Assessors rejects the charitable or educational exemption on its property.
