Wisconsin city to appeal medical imaging equipment exemption
The city of La Crosse, Wis., plans to appeal a state rule that exempts scores of computerized medical equipment from local property taxes.
The move prolongs a battle between City Hall, Gundersen Clinic and the Wisconsin Department of Revenue over whether to classify medical devices as taxable or exempt, according to the La Crosse Tribune.
Robert Horowitz, an attorney for the city, said the case is important because it decides whether major medical devices, like ultrasound equipment and MRI machines, are exempt from property taxes—an exemption the legislature never intended to make.
The court’s ruling would have statewide ramifications if upheld on appeal, creating a major tax loophole and shifting tax liabilities across the state, officials said.
With state reimbursement, local taxing entities still came up $80,700 short in 2002, the first year Gundersen Clinic claimed the exemption, said City Assessor Mark Schlafer.
This year, the shortfall likely would amount to about $290,000, with a $10 million gap between what the city and clinic consider taxable property, Schlafer noted.
The statute exempts mainframe computers, personal computers and electronic peripheral equipment but not “custom software, fax machines, copiers ... equipment with embedded computerized components,” reported the La Crosse Tribune.
The city contends the court misinterpreted the statute and guidelines in shifting ultrasound, radiation oncology, laser, cardiology, nuclear medicine, digital imaging and other equipment from taxable to exempt.
Peripheral equipment was intended to include printers and scanners, not x-ray and ultrasound machines, according to the city.
Gundersen Clinic is La Crosse’s largest taxpayer, paying $2.36 million in 2007, according to the city assessor’s office. An assessment earlier this year valued its property at $84.2 million.
The La Crosse Tribune reported that the city has not yet filed a petition for judicial review, however, the city council has authorized an appeal.
The move prolongs a battle between City Hall, Gundersen Clinic and the Wisconsin Department of Revenue over whether to classify medical devices as taxable or exempt, according to the La Crosse Tribune.
Robert Horowitz, an attorney for the city, said the case is important because it decides whether major medical devices, like ultrasound equipment and MRI machines, are exempt from property taxes—an exemption the legislature never intended to make.
The court’s ruling would have statewide ramifications if upheld on appeal, creating a major tax loophole and shifting tax liabilities across the state, officials said.
With state reimbursement, local taxing entities still came up $80,700 short in 2002, the first year Gundersen Clinic claimed the exemption, said City Assessor Mark Schlafer.
This year, the shortfall likely would amount to about $290,000, with a $10 million gap between what the city and clinic consider taxable property, Schlafer noted.
The statute exempts mainframe computers, personal computers and electronic peripheral equipment but not “custom software, fax machines, copiers ... equipment with embedded computerized components,” reported the La Crosse Tribune.
The city contends the court misinterpreted the statute and guidelines in shifting ultrasound, radiation oncology, laser, cardiology, nuclear medicine, digital imaging and other equipment from taxable to exempt.
Peripheral equipment was intended to include printers and scanners, not x-ray and ultrasound machines, according to the city.
Gundersen Clinic is La Crosse’s largest taxpayer, paying $2.36 million in 2007, according to the city assessor’s office. An assessment earlier this year valued its property at $84.2 million.
The La Crosse Tribune reported that the city has not yet filed a petition for judicial review, however, the city council has authorized an appeal.