City Council to consider ending PeaceHealth's tax exemption

Bellingham City Council will hold a May 19 public hearing on an ordinance to repeal a business and occupation tax exemption for religion-affiliated, nonprofit health care providers, including the PeaceHealth St. Joseph Medical Center.

The proposed ordinance would also adopt health care deductions and exemptions from Washington state’s business and occupation tax code.

The hearing will take place at 7 p.m. in council chambers at City Hall, located at 210 Lottie St.

Written comments on the ordinance can be sent to the Council Office, 210 Lottie St., emailed to or faxed to 360-778-8101.

Comments must be received by 10 a.m. on May 14 to be added to the agenda packet for the public hearing. Late comments will be forwarded to council members but not included in published meeting materials.

In recent meetings and committee sessions, City Council has addressed new scrutiny of PeaceHealth’s local tax exemption.

PeaceHealth has for many years claimed the exemption on the grounds of its nonprofit status and its affiliation with the Catholic church. Yet the city attorney’s office has raised questions over whether PeaceHealth’s tax immunity is proper, particularly in light of the group’s takeover of Madrona Medical and North Cascade Cardiology, which cost Bellingham hundreds and thousands of dollars in B&O tax revenue.

View an April 21 memo to City Council and Bellingham Mayor Kelli Linville, which includes further information on the proposed ordinance. City Council passed a motion on April 21 to schedule a public hearing on an ordinance concerning the first option described in the memo.
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Evan Marczynski, associate editor of The Bellingham Business Journal, can be reached at 360-647-8805, Ext. 5052, or


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