California, New York have highest hospital property tax exemptions
This is part two of a three-part series examining key takeaways from our 2025 Hospital Property Tax Report. Read part one to see the list of hospitals with the highest property tax exemptions.
Most nonprofit hospitals are exempt from federal, state, and local taxes, a benefit worth billions per year. One of the most substantial parts of these exemptions is for property taxes. With many communities struggling to fund their schools and other local services, it’s important to understand how much tax revenue is being foregone.
California hospitals benefit from $731 million in property tax breaks
Overall, hospitals in 18 states own a total of $170 billion in assessed real property value and benefit from a total of $4.3 billion in real estate tax exemptions. However, this benefit is not spread out equally among states.
Our research finds that California and New York have the greatest total real estate tax exemption value out of the states studied. Together they have $1.4 billion in property tax exemptions, accounting for nearly one-third of the total for all 18 states.
At the individual hospital level, Massachusetts and New York had high average tax exemptions at $6.8 million and $5.6 million per hospital, respectively. Illinois also had a high average tax exemption at $5.9 million per hospital, although low availability of property data may not make this representative of all hospitals in the state.
States by total property tax exemption
From Lown Institute analysis of 1,485 hospitals across 18 states
| State | Number of hospitals | Total, property tax exemption | Average, property tax exemption |
|---|---|---|---|
| California | 200 | $731 M | $3.8 M |
| New York | 128 | $717 M | $5.6 M |
| Ohio | 136 | $422 M | $3.3 M |
| Massachusetts | 50 | $340 M | $6.8 M |
| Texas | 131 | $335 M | $3.3 M |
| Illinois* | 56 (84 not available) | $330 M | $5.9 M |
| Pennsylvania | 125 | $328 M | $2.8 M |
| Florida | 88 | $259 M | $3.3 M |
| Maryland | 47 | $144 M | $3.2 M |
| Iowa | 56 | $113 M | $2.1 M |
| Indiana | 67 | $107 M | $1.6 M |
| Colorado | 41 | $102 M | $2.7 M |
| Minnesota | 105 | $97 M | $1.0 M |
| North Carolina | 54 | $82 M | $1.7 M |
| Oregon | 42 | $71 M | $1.8 M |
| Louisiana | 29 | $63 M | $3.2 M |
| Tennessee | 46 | $50 M | $1.3 M |
| Georgia | 84 | $42 M | $605 K |
| TOTAL | 1,485 | $4.3 B | $3.2 M |
*Property information was not provided in assessment portals. The value of hospital property tax exemptions were sourced from municipal forms where available.
Property taxes are an important source of funding for local services, and in communities where hospitals have a large presence like San Francisco and New York City, these exemptions can strain local budgets. Some states and localities are already taking action on this issue. Since 2011, Boston has implemented a “payment in lieu of taxes” (or PILOT) program that asks nonprofits to give back a portion of their property tax exemption to help fund local services. In Montana, lawmakers are considering a bill that would require hospitals to spend as much on community benefits as the value of their property tax breaks, with any shortfall in this spending going toward critical access hospitals.
Read our report on property tax breaks to learn more.