BRENTWOOD — A subsidiary of Exeter Health Resources Inc. that owns the new Epping Regional Health Center is suing the town of Epping, claiming its property is being illegally taxed.
Exeter Med Real Inc. filed suit late last month after it received a 2013 tax bill for the property at 212 Calef Highway.
EMR argues it’s exempt from taxes because it is recognized as a charitable organization that promotes public health.
According to the suit filed in Rockingham County Superior Court, EMR was formed as a “special purpose entity” to purchase or lease property which is then leased or subleased to its affiliates, which include Exeter Hospital and Core Physicians.
EMR, the hospital and Core Physicians are all subsidiaries of Exeter Health Resources.
EMR has owned Epping Regional Health Center since before it opened on April 1, 2013 and owns no other property in Epping.
It has leased the center to the hospital and Core Physicians. The hospital provides imaging and rehabilitative services to adults and children while Core Physicians offers pediatric care, adult primary care and lab service.
“Thus, the health center is entirely dedicated to the mission of promoting public health,” the suit said.
According to Town Clerk Erika Robinson, EMR’s total tax bill for last year was $115,583.
The property has an assessed value of $4,762,400.
EMR applied to the town for charitable tax exemption on March 12, 2013. The town denied its request on Sept. 23.
The reasons for the denial aren’t clear.
Town Administrator Gregory Dodge declined to provide the letter of denial given to EMR at the advice of the town’s attorney because the case is now in litigation.
While EMR paid the tax bill, it now wants the court to order an abatement on the entire tax bill to force the town to refund the money. EMR is also seeking interest on the money it paid to the town.
Under state law, charitable organizations can receive tax-exempt status. The statute, known as RSA 72:23, states: “The buildings, lands and personal property of charitable organizations and societies organized, incorporated, or legally doing business in this state, owned, used and occupied by them directly for the purposes for which they are established, provided that none of the income or profits thereof is used for any other purpose than the purpose for which they are established.”
The suit said the IRS has recognized Exeter Health Resources, including EMR, the hospital, and Core Physicians, as tax-exempt organizations.
The hospital and Core Physicians are required to “promote public health, specifically including the direct provision of medical service, on a non-profit basis,” the suit said. That means that “no part of their assets and net earnings can be distributed to any private individual or used for purposes other than the specific purpose for which the entities were formed…;,” the suit said.
“Like its affiliates, EMR’s organic documents require it to function as a charitable organization. Its specific purpose is to acquire and hold title to real property and remit any net income to its tax-exempt ‘shareholders.’ EMR’s sole shareholder initially was, and remains, (Exeter Health Resources Inc.) Accordingly, in the event that EMR realizes any net income that is not used to acquire real property or for related activities, that income is distributable solely to EHRI which, in turn, is required by its own organic documents to use all such income to promote public health,” the suit said.
The town has not yet responded to the suit in court.
