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November 28, 2012

Tacoma, Wash., Drops Tax Break for Big Nonprofit Hospitals

The Tacoma, Wash., City Council voted unanimously Tuesday to levy the city's full business and occupation tax on its two largest nonprofit hospital networks, The News Tribune reports. The move means the MultiCare and Franciscan health systems, which had paid 0.1 percent of revenue for the tax, will now pay 0.4 percent, as do commercial entities.

Tacoma, which is facing a $66-million budget shortfall, expects to raise about $5.5-million in 2013-14 by eliminating the partial tax break. "No one takes joy in raising taxes on anyone," Mayor Marilyn Strickland said. "But this is where we are right now as a city."

Tacoma health-care nonprofits had paid no business tax at all until February, when the 0.1 percent rate was imposed on those with annual gross incomes of at least $30-million. Smaller health-care nonprofits will remain fully exempt.