Background
The Providence Community Health Centers, Inc. (PCHC) is a federally qualified nonprofit health center established in 1968, operating exclusively in Providence, Rhode Island. It serves patients regardless of ability to pay, with approximately 78 percent of its roughly 62,000 annual patients either uninsured or covered by public insurance. PCHC owns twenty-five properties in Providence and, in July 2020, acquired a single property at 1 Coastway Boulevard in Warwick, which it uses for administrative functions including billing, human resources, and executive leadership, as well as virtual patient case management.
In 2021, the Rhode Island General Assembly enacted G.L. § 44-3-3(a)(70), which exempts from taxation “[r]eal and tangible personal property of The Providence Community Health Centers, Inc., a Rhode Island domestic nonprofit corporation, located in Providence, Rhode Island.” PCHC applied to the Warwick tax assessor for an exemption on its Warwick property, arguing the statute granted a statewide exemption. The assessor denied the application, concluding the statute was Providence-specific. PCHC was assessed $155,716.15 in taxes for 2022 and exhausted administrative appeals before the city’s Tax Board of Review before seeking relief in Superior Court.
In Superior Court, PCHC argued in the alternative that it was also exempt under the general charitable exemption in § 44-3-3(a)(12), which covers property held for the aid or support of the poor or for a nonprofit hospital for the sick or disabled. The Superior Court granted summary judgment to the tax assessor on both grounds, holding that § 44-3-3(a)(70) limited the exemption to Providence properties and that PCHC did not qualify under § 44-3-3(a)(12) because it does not serve the poor exclusively. PCHC appealed.
The Court’s Holding
The Rhode Island Supreme Court unanimously affirmed the Superior Court’s judgment. On the § 44-3-3(a)(70) question, the Court held that the phrase “located in Providence, Rhode Island” modifies “real and tangible personal property,” not the description of PCHC as a nonprofit corporation. Giving the words their plain and ordinary meaning and applying the anti-surplusage canon, the Court reasoned that accepting PCHC’s reading—that the phrase merely describes where PCHC is headquartered—would render those words meaningless. The Court noted that had the General Assembly intended to describe headquarters location rather than property location, it would have used language such as “headquartered in Providence.” Post-hoc legislator letters offered to show broader intent were disregarded as improper extrinsic evidence in the face of unambiguous text.
On the § 44-3-3(a)(12) general charitable exemption, the Court extended its holding from the companion case PACE Organization of Rhode Island v. Frew, 355 A.3d 44 (R.I. 2026), finding the statute ambiguous as applied to PCHC’s facts. Under Rhode Island’s settled rule that ambiguity in a tax exemption statute must be resolved in favor of the taxing authority, the Court held that PCHC was not entitled to the exemption. The Court therefore declined to reach PCHC’s argument invoking the “proviso canon” to avoid an exclusivity requirement.
The Court also reaffirmed the baseline principle that statutory tax exemptions are strictly construed in favor of the taxing authority, and that the party claiming the exemption bears the burden of demonstrating clear legislative intent to grant it.
Key Takeaways
- A property tax exemption statute naming a specific nonprofit organization and referencing a geographic location will be read to limit the exemption to property physically situated in that location, not to all property owned by the organization statewide.
- Post-hoc statements by individual bill sponsors are not legitimate legislative history and will be given no weight by Rhode Island courts when construing unambiguous statutory text.
- Ambiguity in a Rhode Island statute granting a tax exemption is resolved in favor of the taxing authority — the burden lies with the party claiming the exemption to show clear legislative intent.
- The terms “in” and “within” are treated as interchangeable in Rhode Island statutory construction; placement of those terms relative to the named entity, not their literal dictionary definitions, is the controlling interpretive factor.
Why It Matters
This decision has practical significance for nonprofits that operate across multiple Rhode Island municipalities under organization-specific legislative tax exemptions. It signals that courts will read geographic modifiers in such statutes as limiting the exemption to property within the named location, even when the organization’s mission is statewide, unless the legislature explicitly provides otherwise. Nonprofits seeking multi-municipal exemptions should ensure enabling legislation uses unambiguous statewide language.
More broadly, the decision reinforces Rhode Island’s strict-construction framework for tax exemptions and underscores the limits of legislative history: sponsors’ letters and post-enactment affidavits will not override plain statutory text. Organizations that lobbied for and received a specific exemption—rather than relying on the general charitable exemption—may find that specificity cuts against them if they later expand operations beyond the named geographic area.