The Wisconsin Supreme Court agreed this month to review lower-court decisions in favor of Wauwatosa after Children’s Hospital sued seeking tax relief for a construction project that the city deemed taxable until it was completed.
The origins of the case date back to 2020, when the Wauwatosa Assessor’s Office assessed a portion of the Children’s Hospital property as taxable because it was not yet being used for tax-exempt nonprofit purposes. The hospital at the time was in the middle of a major expansion and renovation project on a wing of the facility described as the “North Tower.”
Taxing jurisdictions generally give nonprofit hospitals like Children’s an exemption from paying property taxes, but only on the portions of their properties that are being used for exempt purposes. Emergency services, for example, would qualify for such exemptions. Commercial purposes, like a fitness center or a doctor’s office, would not.
At issue in the case known as Children’s Hospital of Wisconsin v. City of Wauwatosa (appeals case no. 2023AP1432) is whether a building that eventually would house tax-exempt functions could be taxed while it was still under construction. Children’s says no. Wauwatosa says yes.