Hospitals must pay property taxes on leased equipment unless a contract states otherwise.

A not-for-profit hospital has decided to rent medical and office equipment instead of purchasing the items. Under the terms of the lease, the hospital is required to reimburse the supplier for any property taxes on the equipment covered by the lease. The lessor has billed the hospital for personal property taxes assessed by the county government. The hospital materials manager is concerned that the hospital isn't able to claim its usual tax exemption since it didn't purchase the equipment and can't claim to be the owner of it. In this dialogue, Dr. Decker discusses this problem and offers some possible solutions.