Mayo Clinic’s Bid for Tax-Exempt Status Gets Appeals Judge’s Ear

An Eighth Circuit judge appeared highly skeptical of the government’s position that Mayo Clinic shouldn’t qualify as a tax-exempt educational institution during oral arguments Wednesday.

The US appealed a Minnesota district court ruling that the academic medical center is owed an $11.5 million tax refund because the nonprofit’s educational status exempts its debt-financed property income from unrelated business income tax, or UBIT. Without its desired status as an educational institution, nonprofits like Mayo can still be liable for UBIT on income unrelated to its exempt qualifying purpose.

US counsel Judith A. Hagley told the US Court of Appeals for the ...