Critics accuse Atrium of 'double-dipping' on tax refunds
Plus: Ledger Election Hub selected for nonprofit pitch competition; New playground at big Mecklenburg park; Cheap getaways from CLT; Lawsuit says N.C. college admitted a sex offender
Good morning! Today is Monday, February 24, 2025. You’re reading The Charlotte Ledger, an e-newsletter with local business-y news and insights for Charlotte, N.C.
Need to subscribe — or upgrade your Ledger e-newsletter subscription? Details here.
Today's Charlotte Ledger is sponsored by GraserSmith, PLLC:
Experience when you need it most.
At GraserSmith, we exclusively focus on providing personalized advocacy in family matters of divorce, child custody, child support, alimony, property division, and prenuptial agreements.
We also offer private mediation options to resolve your matters without unnecessary delay or costly litigation.
Atrium Health files two separate requests for sales tax refunds, likely allowing it to avoid a state limit of $45M on sales tax exemptions. That’s possible because of its complicated legal structure.
By Michelle Crouch
Co-published with N.C. Health News
Atrium Health received a $45 million sales tax refund from North Carolina in 2023 and 2024, hitting a statutory limit allowed by the state for nonprofits, tax records reviewed by The Charlotte Ledger/NC Health News show. And that may not even be the full amount.
Thanks to a legal loophole, the hospital system’s total refund is likely even higher.
Atrium’s Wake Forest Baptist enterprise, operating in the Winston-Salem area, files separately for sales tax refunds, an Atrium spokesperson said.
Critics said the two filings effectively allow Atrium as a whole to skirt the $45 million state cap on nonprofit sales tax refunds.
Former State Sen. Bob Rucho, a Mecklenburg County Republican who helped push through the nonprofit sales tax cap in 2013, said he thinks it’s wrong for Atrium to bypass the cap by filing two separate refund requests.
Rucho told The Ledger/NC Health News, “It should all be under a $45 million umbrella.”
Democratic Mecklenburg County Commissioner Laura Meier called it “double-dipping.”
Atrium Health Wake Forest Baptist is a separate legal entity from the Charlotte-Mecklenburg Hospital Authority, the $12.6 billion government entity that does business as Atrium Health in the Charlotte region and Georgia. But the two “combined” to create what Atrium called “a single enterprise” in 2020.
Then, in late 2022, Atrium completed another combination with hospitals in Illinois and Wisconsin to create the $32 billion entity known as Advocate Health, the nation’s third-largest nonprofit health system.
Atrium did not answer specific questions from The Ledger/NC Health News about how much of a refund Atrium Health Wake Forest Baptist received or address claims that Atrium Health is exceeding the cap.
In an emailed response, a spokesperson said, “We file separately due to our legal structure.”
The hospital system also noted that it invested nearly $3 billion last year in free, discounted and undercompensated care for low-income patients and those on Medicare and Medicaid, as well as other health, wellness and community-building initiatives.
Hospitals receive $295 million in nonprofit sales tax refunds
One of the perks nonprofits and public hospitals in North Carolina enjoy is an exemption from sales taxes. They pay sales taxes up front on products they buy but can later request refunds from the N.C. Department of Revenue.
Hospitals are, by far, the biggest beneficiaries.
Of the $396 million the state’s nonprofits received in refunds in 2023, hospitals and other medical facilities claimed about 75% of the money, or $295 million, according to a state report. Universities collected another 11%.
In 2013, some N.C. senators, including Rucho, noticed the state’s larger hospitals and universities were paying their executives seven-figure salaries and stockpiling millions in reserves while claiming substantial sales tax refunds.
“Think about all that money,” Rucho said. “If a nonprofit has that much money set aside, I don’t think it’s a nonprofit anymore.”
Arguing that such flush institutions could afford to contribute more in taxes, the senators pushed for a limit on the amount those groups could get back — proposing a cap that would eventually drop to $130,000 a year.
After intense lobbying from hospitals and nonprofits, the legislators couldn’t get a significant cap through the House. As a compromise, they settled on a $45 million limit — consisting of $31.7 million in state sales tax refunds and $13.3 million in local sales tax refunds.
At the time, $45 million far exceeded the amount even the largest nonprofits collected, Rucho said, and the cap seemed more symbolic than practical.
But the tax forms obtained by The Ledger/NC Health News show that Atrium Health hit the $45 million cap in the 2022-23 and 2023-24 fiscal years.
Mecklenburg faces budget strain as sales tax revenue flattens
In Mecklenburg County alone, Atrium requested a refund of $10.3 million in county and transit sales tax in 2022-23 and $7.5 million in 2023-24, the tax records show. The system also claimed refunds in seven other counties.
At a January retreat, Mecklenburg County’s chief financial officer noted a steep decline in the growth of the county’s sales tax revenue, which he said put constraints on the county budget. That prompted county leaders to say a property tax increase may be required this year.
Meier, the Mecklenburg commissioner, asked about the nonprofit tax issue at the meeting, at which the chief financial officer said budgeting is tricky because of the uncertainty over the amount nonprofits would request in tax refunds.
“So Atrium Health is one? Any church?” Meier asked.
“Yep,” chief financial officer David Boyd said.
“Exempt from property tax and sales tax?”
“That’s right.”
In an interview, Meier said the sales taxes that Atrium avoids could have helped fill the budget gap.
“We could pay for more mental health services, more park land or it could go to affordable housing investments,” she said. “There is so much we could do with that money.”
Elaine Powell, another Mecklenburg commissioner, agreed, adding that the $7.5 million Atrium gets back in sales taxes, combined with the property tax it avoids, could make a big difference in paying for the county’s needs.
“It’s something the General Assembly needs to look at,” Powell said. “It’s such an obscenely profitable nonprofit.”
Atrium is the state’s largest hospital system. In 2024, its operations in the Charlotte region and Georgia reported $12.6 billion in net revenue and $1.31 billion in net income, which some would call profit.
Unclear whether other nonprofits have hit the refund cap
The Ledger/NC Health News was able to get Atrium’s tax forms because the hospital authority is a government entity subject to public records laws.
It’s not clear if 2023 marked the first time Atrium hit the cap, or if other nonprofits have hit the limit.
David Heinen, vice president for public policy and advocacy at the North Carolina Center for Nonprofits, said nonprofits are not required to release tax records that show their individual sales tax refunds.
Should hospitals qualify as nonprofits?
Today’s health care systems report even higher salaries, revenues and reserves than they did in 2013, so the millions they receive in sales tax refunds add fuel to the ongoing debate about whether they should qualify as nonprofits.
“They might have the label ‘nonprofit,’ but they are acting like corporations, paying millions of dollars in salaries, and they have a huge surplus that any other corporation would call profit,” Meier said. “They are in effect making money off the backs of sick people.”
In return for not paying taxes, the Internal Revenue Service says charitable hospitals must operate in the public interest and provide a “community benefit.” The agency doesn’t specify what that means.
Atrium said it provided $3 billion in community benefits in North Carolina, South Carolina and Georgia in 2023, including free and discounted care, Medicare and Medicaid shortfalls, medical research costs and community initiatives. The hospital also has one of the most generous charity care policies in the state, offering free care to patients in households that earn up to three times the federal poverty level ($46,950 for an individual or $96,450 for a family of four).
Heinen emphasized that tax breaks, including sales tax exemptions, are essential for nonprofits to be able to provide services to the community.
He said larger 501(c)(3) charities such as hospitals and smaller ones like houses of worship and food pantries are subject to the same Internal Revenue Service regulations and should be treated the same for tax purposes.
“Even though the numbers are quite different, they are following the same rules,” Heinen said.
Atrium’s unique status as a government entity
As a government entity, Atrium enjoys additional benefits, including property tax breaks on land that’s not being used for medical purposes, the power of eminent domain and antitrust immunity. Critics say the system plays it both ways because it doesn’t follow public records and open meetings requirements in the same way other public entities do.
State law restricts hospital authorities from extending more than 10 miles past their county line, which likely explains why Atrium “combined” with Wake Forest Baptist rather than fully merging.
The arrangement allows Atrium to continue to benefit from its status as a hospital authority, while enjoying the efficiencies that typically come from hospital consolidation.
And it ultimately gave Atrium an additional advantage, Meier said: being able to exceed the sales tax refund cap by filing two tax returns.
Meier said it’s another reason state legislators should reconsider the decades-old law that gives hospital authorities like Atrium special privileges compared to their nonprofit peers.
“They have all the advantages of being a nonprofit and all the advantages of being a government entity,” she said, “yet they act like a corporation with a private board.”
Michelle Crouch covers health care. Reach her at mcrouch@northcarolinahealthnews.org.
This article is part of a partnership between The Ledger and North Carolina Health News to produce original health care reporting focused on the Charlotte area.
Related Ledger/N.C. Health News articles:
“Atrium Health is a unit of ‘local government’ like no other,” (Feb. 5, 2024)
“Atrium and Novant get millions in property tax breaks,” (April 3, 2023)
Today’s supporting sponsor is Landon A. Dunn, attorney-at-law in Matthews:
Ledger’s Election Hub accepted into nonprofit pitch competition SEED20; New nonprofit will expand information for voters
The Charlotte Ledger received a bit of good news recently — that our Election Hub, a source of helpful and impartial information on political candidates in the last three local elections, has been accepted into the prestigious SEED20 nonprofit pitch competition.
SEED20 is a project of Social Venture Partners Charlotte, and it aims to connect the community with “the region’s most promising social entrepreneurs tackling pressing challenges.” Sucharita Kodali, who has headed the Election Hub for us, will be one of 10 people making three-minute presentations to hundreds of people at an event at Central Piedmont Community College on April 1. The winning organization receives a cash prize, and all the organizations receive mentoring and exposure.
New nonprofit: Today, we’re happy to tell you that we are spinning off our Election Hub into a separate, independent nonprofit organization. We’ve enlisted a lawyer and have the paperwork submitted on that, because we think educating local citizens about elections and candidates is important.
Frankly, it is difficult nowadays to find responsible, free information on the dozens of local candidates vying to represent us in the state legislature, as judges, and on city and town councils and county boards of commissioners.
Organizing the Hub as a nonprofit gives more options to make it financially viable. We think it’s inappropriate to charge people to access civic information that informs their votes, or to sell ads against that information.
In 2023 and 2024, paying Ledger members made the Hub possible. In November’s election, the Hub provided information on 200 candidates across five local counties, with high standards of accuracy and fairness, and we reached tens of thousands of voters. We’re planning to do it again this fall, when there are city council and school board races on the ballot.
Nonprofit status makes it easier to apply for grants and donations to support and expand that vital work. (Many thanks to Envision Charlotte, our fiscal sponsor that we have partnered with on candidate receptions, as we establish the Hub as a separate nonprofit.)
For The Ledger, this is part of a larger effort to find innovative ways to solve the problem of the deterioration of local news. We are continuing to grow amid a tough and competitive media environment.
➡️ You can find out more about Social Venture Partners and SEED20 here, and tickets are now available for the April 1 event (both in-person and online).
You can also find out about the nine other worthy local participants, who are using innovative methods to provide behavioral healthcare, recycle materials into art supplies and boost student’s math and English skills. —Tony Mecia
A new playground for McAlpine Creek Park
Attention, lovers of the outdoors: One of Mecklenburg County’s major parks — McAlpine Creek Park — has a new addition as of Saturday: a playground. The 107-acre park off Monroe Road is a popular launching point to the McAlpine Creek Greenway and the home of cross-country meets. The new playground is located next to the parking lot, before the bridge that leads to the lake. (Photo by Lindsey Banks)
Cheap getaways from CLT
Charlotte to New York LaGuardia, $45 round-trip on Spirit (nonstop), March 6-10.
Charlotte to New Orleans, $87 round-trip on Spirit (nonstop), March 13-17.
Charlotte to Miami, $59 round-trip on Spirit (nonstop), April 4-7.
Charlotte to Denver, $124 round-trip on Frontier (nonstop), April 3-7.
Charlotte to Porto, Portugal, $551 round-trip on United/Lufthansa (one-stop), March 31-April 8.
Charlotte to Catania, Italy (Sicily), $540 round-trip on Lufthansa (one-stop), March 30-April 8.
Source: Google Flights. Fares retrieved Monday morning. They might have changed by the time you read this.
You might be interested in these Charlotte events: Tech humor, I-77 discussion, movie screening, middle school ukulele
Events submitted by readers to The Ledger’s events board:
WEDNESDAY: “Crack Up Code,” 7-9 p.m., The Comedy Zone, 900 North Carolina Music Factory Boulevard, B3. Get ready to crack up at Crack Up Code II! This year’s hilarious fundraiser is bringing comedy and technology together once again. Enjoy a night filled with laughter featuring 5 first-time comedians making their debuts. Proceeds benefit the Dottie Rose Foundation, empowering the next generation of women in tech. $46-74.
THURSDAY: “I-77 South Expansion: Presentation and Discussion,” 5-6:30 p.m., The Launch Factory, 2459 Wilkinson Blvd., 3rd Floor. Join the Charlotte Area Chamber of Commerce’s Public Policy Meeting to learn about the planned widening of I-77 between uptown and the South Carolina line, with a presentation by the N.C. Department of Transportation. Free.
THURSDAY: The Independent Picture House hosts a special screening of “The Annihilation of Fish” starring James Earl Jones and Lynn Redgrave, 7 p.m. Becky Winkler, daughter of screenwriter Anthony Winkler, will be in attendance for a post-screening discussion as part of IPH’s Black History Month series. Tickets are $9.25.
MARCH 5: “Middle School Ukulele 1.0: Billie Eilish,” 6:15 p.m., Arts+ Community Campus, 2304 The Plaza, Charlotte. Middle school is the perfect time to start learning the ukulele! We'll teach the basics of how to produce a great sound, some fundamental strumming patterns, and the first few starter chords. $25.
➡️ List your event on the Ledger events board.
In brief:
Lawsuit says N.C. college admitted sex offender: Two former students at St. Andrews University in Laurinburg, 90 miles east of Charlotte, said in a lawsuit that the school knowingly accepted a registered sex offender from Rock Hill who had spent a year in military prison before enrollment and who went on to sexually assault them on campus. The man is now serving a 12-year sentence in connection with assaults on three St. Andrews students. (The Assembly)
New company HQ for Charlotte: Logistics company Odyssey Logistics has moved its headquarters to Charlotte from Connecticut. Its headquarters location at Whitehall Corporate Center in the Steele Creek area will have 80 employees. (Biz Journal, subscriber-only)
Uptown stabbing death: A 21-year-old was stabbed to death around 1 p.m. Thursday near the Charlotte Transportation Center, police said. No arrests have been made. (WSOC)
Apple to expand N.C. data center: Apple plans to increase the capacity of its data center in Maiden, 35 miles northwest of Charlotte, as part of a $500B U.S. expansion announced Monday. (Axios Charlotte)
Sewage spill: A grease blockage in Charlotte’s sewer system caused about 1,200 gallons of sewage to spill into Little Sugar Creek uptown on Thursday, Charlotte Water officials said. (WCNC)
Laissez les bons temps rouler: Charlotte on the Cheap has a list of Charlotte-area Mardi Gras celebrations and stores that sell king cake. Fat Tuesday is March 4.
Need to sign up for this e-newsletter? We offer a free version, as well as paid memberships for full access to all 4 of our local newsletters:
The Charlotte Ledger is a locally owned media company that delivers smart and essential news. We strive for fairness and accuracy and will correct all known errors. The content reflects the independent editorial judgment of The Charlotte Ledger. Any advertising, paid marketing or sponsored content will be clearly labeled.
◼️ About The Ledger • Our Team • Website
◼️ Newsletters • Podcast • Newcomer Guide • A Better You email series
◼️ Subscribe • Sponsor • Events Board • Merch Store • Manage Your Account
◼️ Follow us on Facebook, Instagram, X/Twitter, LinkedIn
Thank you for this excellent reporting. And thank you to Cmrs Meier, Powell, and Rodriguez-McDowell for putting the needs of their constituents before the demands of corporate greed.
Thank you for your public service.