William W. Backus Hospital v. Stonington, 349 Conn. 713

The William W. Backus Hospital (Backus) operated an outpatient rehabilitation facility in Stonington, Connecticut, within a suite subleased from its corporate affiliate, Hartford Healthcare, which leased the building.
Backus claimed personal property tax exemptions for equipment used at the facility under Connecticut’s charitable and hospital exemptions (Conn. Gen. Stat. § 12-81 (7) and (16)).
The Stonington assessor denied the exemptions, citing Conn. Gen. Stat. § 12-66a, which makes certain properties acquired by health systems after Oct. 1, 2015, taxable even if otherwise exempt.
The trial court held for Backus, finding the property was leased, not “acquired,” and thus § 12-66a did not apply.
The Town appealed, arguing the facility was “acquired” within the meaning of § 12-66a and that the property was taxable.
The Supreme Court reviewed whether “acquired” in § 12-66a includes leased property and whether the associated personal property is taxable.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does "acquired" in § 12-66a include leased property?	Only purchased property is “acquired;” leasing is excluded.	Leasing is acquiring; statute covers possession.	"Acquired" includes property obtained by lease, not just purchase.
Applicability of § 12-66a tax to personal property	Not applicable, as property was only leased, not acquired.	Personal property at facility is taxable under law	Personal property used at leased facility is taxable under § 12-66a.
Relationship to definition of "health system"	Plaintiff is a hospital, not a health system for the statute	Plaintiff is affiliated with a health system	Statutory definition includes affiliates; Backus falls under definition of health system
Purpose/structuring to avoid taxation	Town can still tax owner; no need to extend statute’s reach	Limiting statute to purchases would allow avoidance	Restricting to purchases would defeat statute’s purpose; includes leasing

Rainbow Housing Corp. v. Cromwell, 340 Conn. 501 (strictly construing statutory tax exemptions against party claiming exemption)
St. Joseph’s Living Center, Inc. v. Windham, 290 Conn. 695 (burden is on party claiming exemption)
Isaiah 61:1, Inc. v. Bridgeport, 270 Conn. 69 (strict construction of property tax exemptions)
Tyler Equipment Corp. v. Wallingford, 212 Conn. 167 (form of transaction should not be used to avoid taxation)