Amicus Brief

Wexford Medical Group v City of Cadillac

Case Year: 2005
Case Forum: Michigan Supreme Court
Keywords: General Property Tax Act (GPTA), charitable institution, public health purpose exemption
Amicus Counsel:

Richard D. Reed (P19296) | Matthew L. Lager (P58589) | Lewis, Reed & Allen, P.C. | 136 East Michigan Avenue, Suite 800 |
Kalamazoo Michigan 49007 | 269-388-7600

CoAmicus Parties:

Michigan Townships Association (MTA)


The factual findings of the Michigan Tax Tribunal are supported by competent, material and substantial evidence. The denial of exemption, pursuant to the charitable purposes and public health exemptions, is consistent with the language of the exemption statutes and longstanding consistent interpretation. Further, to expand exemption to include the property of what is essentially the office of private practice physicians would
violate uniformity of taxation. The only way to avoid this would be to include the property of all private practice physicians, dentists, opticians, chiropractors and other similarlysituated
taxpayers as exempt under the General Property Tax Act. Such an expansion would have devastating consequences for Michigan municipalities and would be well beyond legislative intent.


Michigan Supreme Court:
Whether an institution is a charitable institution within the meaning of MCL 211.7o is a fact-specific question that requires examining the claimant’s overall purpose and the way in which it fulfills that purpose. The determination will rarely, if ever, rest on one specific fact, such as the percentage of monetary value of services given for free. Because the Tax Tribunal and the Court of Appeals misapplied existing law by erroneously narrowing the focus of their inquiry to the value of the free medical care petitioner rendered in the given tax years, they erroneously denied the requested exemption. Petitioner is a charitable institution because it exists for, and carries out, the purpose of giving a gift for the benefit of an indefinite number of persons by providing free and below-cost medical care to anyone who needs it without qualification, and it realizes no pecuniary gain from its activities. As such, it is entitled to an ad valorem tax exemption. We reverse the part of the Court of Appeals judgment that held that petitioner was not a charitable institution. We further vacate the part of its judgment pertaining to whether petitioner served a public health purpose. We remand this case to the Tax Tribunal for entry of judgment for petitioner.

MSC requested LDF amicus brief? No

Petitioner Wexford Medical Group is a nonprofit corporation that provides health care in Wexford County, Michigan, which is a federally designated health professional shortage area. Petitioner is a §501(c)(3) (nonprofit) organization and is owned jointly by Trinity Health Care and Munson Health Care, two other § 501(c)(3) organizations. Petitioner’s articles of incorporation identify petitioner’s mission as “providing access to quality and affordable health care services to the communities it serves.” Both its statement of purpose and its bylaws further declare that petitioner will, among other things, conduct its activities within the confines of the rules governing § 501(c)(3) organizations, prevent inurement of funds to private individuals, and refrain from political activities. In accord with its mission, petitioner has a “charity care” policy and an “open-access” policy for Medicare and Medicaid patients. The charity care policy provides free and discounted health care to anyone whose income is up to twice the federal poverty level. Under its open-access policy, patients are treated on a first-come, first-served basis, and petitioner places no limit on the number of Medicare and Medicaid patients it will treat. In 2000, two patients took advantage of the charity care program; 11 patients used it in 2001. The total value of care rendered to these 13 patients was $2,400. Petitioner also reported that 50 percent of its patients utilized Medicare or Medicaid, which it stated was a significantly higher percentage than was true for other providers in the area. After respondent assessed and taxed petitioner’s property in 2000 and 2001, petitioner appealed the assessments to the Tax Tribunal. Petitioner argued that it was entitled to the GPTA’s charitable institution exemption, MCL 211.7o, and its public health purpose exemption, MCL 211.7r, so it should not have to pay ad valorem property taxes. The Tax Tribunal upheld the assessment, finding that petitioner did not qualify for either exemption. With respect to the charitable institution exemption, the tribunal held that while petitioner extended charity care and indigent services to the community, its primary purpose was to operate as a typical family medical practice.

Case Number: 2004-18
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