PROPERTY TAXES – Amends existing law to provide that a county board of equalization may exempt the property of certain hospitals from property taxes.

Hospital tax relief comes with new requirements

Beginning January 1, 2026, Idaho county boards of equalization can exempt qualifying hospital property from property taxes. The law broadens the hospital definition to include nonprofit medical clinics and federally designated critical access and rural emergency hospitals. Eligible owners include nonprofit hospitals, county hospitals, hospital districts, critical access hospitals, and rural emergency hospitals. The exemption covers owned real estate and owned or leased personal property, including medical equipment, located and used in a hospital. Nonprofit hospitals must document nonprofit incorporation under Idaho law or equivalent state law, federal 501(c)(3) status, and IRS Form 990 Schedule H. Unless federally designated as critical access or rural emergency hospitals, they must also meet added community-benefit and patient-care requirements. These include submitting their latest community health needs assessment, adopted response plan, financial-assistance policy, and emergency-care policy. They must limit charges for eligible patients and make reasonable efforts to check financial-assistance eligibility before extraordinary collection actions. They must also show a general public benefit to their county through an annual community-benefit report. Non-exempt business use remains tax-free when it represents no more than 3% of the property's total value. Above 3%, the assessor taxes the share tied to all non-exempt uses, not just the amount above the threshold. Nonprofit hospitals with 150 or more beds must file a detailed community-benefit report with the county board by December 31 each year. It must itemize prior-year charity care, bad debt, under-reimbursed care, below-cost programs, donations, subsidies, donated services, and building and equipment additions. It must also explain how costs exceeding government payments are calculated and how community needs tied to the hospital's mission are identified. This detailed report is informational and cannot be used to approve or deny the exemption. The law does not specify household tax savings.