Oswald v. Beard

Hospital Tax Exemption Statute Upheld by Supreme Court
September 20, 2018

The Oswald case was filed in 2012, shortly after the enactment of Public Act 97-688, which added Section 15-86 to the Property Tax Code establishing the new ownership test for charitable property tax exemption for hospitals. The case did not involve a hospital, it did not involve an application for tax exemption, and it did not involve any decision by the Department of Revenue. It was simply a legal challenge to the language of the statute itself. IHA intervened in the case as a defendant so that it could participate in the defense of the statute.

Oswald claimed that Section 15-86 was facially unconstitutional – meaning that no exemptions could be issued under the statute under any circumstances. Because the statute says that a hospital satisfying the statutory requirements “shall be issued a charitable exemption” Oswald claimed this requires the Department of Revenue to issue exemptions regardless whether the constitutional requirement that property be used exclusively for charitable purposes is satisfied.

Both the trial court and the appellate court rejected Oswald’s arguments and ruled that section 15-86 is constitutional. The Illinois Supreme Court ruled on September 20, 2018, that the statute is constitutional.

IHA was represented in the Oswald case by Neal Gerber Eisenberg.