Schroder & Strom, LLP | Real Estate Tax Counsel

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Exemption Restored to HMO, Resulting in $750,000 in Savings

In 2006, the Town of Babylon revoked a long-standing tax exemption for a medical building owned by the Health Insurance Plan of Greater New York (HIP), a client of our firm. A non-profit HMO is exempt from taxation when it owns a building that is used to provide medical services to patients. After reviewing the grounds for the Town’s revocation of the existing exemption, Schroder & Strom determined that HIP could be entitled to another exemption under a New York State statute applicable to HMOs. The statute provided an as-of-right exemption which would be more difficult to revoke. Accordingly, our firm commenced a proceeding to compel the Assessor to restore HIP’s tax exemption under the as-of-right provision. Although the lower Court initially refused to restore the exemption, we brought the case to the Appellate Division in the matter of Health Insurance Plan v. Town of Babylon, 845 N.Y.S. 2d 98, which resulted in successfully restoring the exemption. As expected, the Town requested an appeal which was denied by the Appellate Division and the Court of Appeals. The restoration of HIP’s exemption resulted in a recovery and refund to HIP in excess of $750,000.