Rep. Mayfield files bill in North Carolina Senate to limit hospitals’ tax benefits

A new bill filed by State Sen. Julie Mayfield seeks to tie nonprofit hospitals’ tax benefits to the amount of charity care they provide, according to the North Carolina State Senate.

The bill, filed as SB 895 on April 29 during the 2025 regular session, was formally listed with the short title: ‘Nonprofit Hospitals Tax Exemption.’

The following is our breakdown, based on the actual bill text, and may include interpretation to clarify its provisions.

In essence, this bill limits property and sales tax benefits for nonprofit, nonstock charitable hospitals based on the actual cost of “qualified charity care” they provide. It ties a hospital’s property tax exemption for each parcel to the cost of charity care delivered on that parcel, calculated using the hospital’s Medicare cost-to-charge ratio and excluding bad debt, contractual allowances and amounts paid by third parties. It defines eligible patients by income and screening criteria, adjusts cross-references in existing law, and caps nonprofit hospitals’ annual sales tax refunds at the lesser of $31.7 million or their verified charity care costs. Most changes take effect July 1, 2027.

Of the two sponsors of this bill, Jim Burgin proposed the most bills (93) during the 2025 regular session.

Bills in North Carolina follow a multi-step process before becoming law. A lawmaker starts by filing a bill, which is assigned to a committee for review. The bill must be read three times in each chamber. If one chamber changes the bill after the other passes it, both must agree on the final version. Once both chambers approve the same bill, it goes to the governor, who has 10 days (or 30 if the legislature is not in session) to sign, veto, or let it become law without a signature.

You can read more about the bills and other measures here.

Mayfield graduated from Davidson College in 1989 with a BA and again in 1996 from Emory University School of Law with an MD.

Mayfield, a Democrat, was elected to the North Carolina State Senate in 2021 to represent the state’s 49th Senate district, replacing previous state senator Terry Van Duyn.