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Fredrikson attorneys persuaded the Minnesota Supreme Court that the Perham Hospital District’s three clinics should be exempt from property tax because they were operated to improve and run Perham Hospital.

Our client, the Perham Hospital District, owns and operates a hospital in Otter Tail County, MN. The county acknowledged that the hospital was exempt from property tax but sought to tax three clinics that were owned by the hospital district and operated by the hospital as hospital departments, contending that clinic property was separate from the hospital and did not, in the words of the applicable statute, “improve” it.

Representing Perham Hospital District before the Minnesota Supreme Court, Fredrikson attorneys Masha Yevzelman and Lynn Linné persuaded the Court that the hospital’s three clinics should be exempt from property tax.  The court agreed with the District that the plain meaning of the word “improve” was broad: “to make or become better.”  The court unanimously affirmed the Minnesota Tax Court’s opinion that medical clinics owned and operated by Perham Hospital District were exempt from property tax because they were operated to improve and run Perham Hospital—they helped attract physicians and patients, improved the hospital’s overall operations and service delivery, increased patient follow-up, provided physical space for use by other hospital departments, etc.

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