Arkansas AG Clarifies Tax Exemption Criteria for Medical Clinics Using Federal Grants

The Arkansas Office of the Attorney General (AG) issued a general opinion addressing whether a medical clinic can claim a business personal property tax exemption based on using federal grant funds to purchase equipment, and whether billing patients and referring delinquent accounts to collection agencies impacts the clinic’s tax-exempt status. The AG clarified that a medical clinic cannot claim an exemption solely because property was purchased with federal grant money, but it may qualify for the “public charity” exemption, under the Arkansas Constitution, if it meets certain criteria. To qualify, the clinic must be open to the public, provide services ...