Waukesha Circuit Court Judge Michael Bohren issued a decision earlier this month concluding that ProHealth Care, Inc. is not entitled to a tax exemption for its Pewaukee facilities, which provide administrative support for ProHealth’s non-profit affiliates Waukesha Memorial Hospital and Oconomowoc Memorial Hospital. The principal stumbling block to the health system’s exemption claim was that ProHealth’s Pewaukee operations also provide support to a taxable affiliate, Waukesha Health System, and ProHealth failed to establish that this support was only inconsequential or incidental. Judge Bohren analyzed the support of both exempt and non-exempt affiliates as a “dual use,” part of which involved a commercial purpose, such that the property was taxable. Judge Bohren’s decision did not attempt to apply a partial exemption analysis, however, even though ProHealth submitted evidence comparing the revenues, employees, and services attributable to Waukesha Health System against those attributable to the exempt hospitals.
While Judge Bohren’s ruling is instructive, it is not a binding precedent since it is only at the trial court level. ProHealth has stated that it does not intend to appeal the decision.