Baptist Memorial Hospital – Jonesboro, Inc. v. Hannah Towell, in Her Official Capacity as Tax Assessor for Craighead County, Arkansas

── Baptist Memorial Hospital – Jonesboro, Inc. v. Hannah Towell, in Her Official Capacity as Tax Assessor for Craighead County, Arkansas ── Court: Court of Appeals of Arkansas Date: April 01, 2026 Category: General Cite as 2026 Ark. App. 209 ARKANSAS COURT OF APPEALS DIVISION III No. CV-23-771 BAPTIST MEMORIAL HOSPITAL – JONESBORO, INC., D/B/A NEA Opinion Delivered April 1, 2026 BAPTIST MEMORIAL HOSPITAL; AND APPEAL FROM THE CRAIGHEAD NORTHEAST ARKANSAS CLINIC COUNTY CIRCUIT COURT, CHARITABLE FOUNDATION, INC. WESTERN DISTRICT [NOS. 16JCV-20-330 & 16JCV-22-166] APPELLANTS HONORABLE MELISSA BRISTOW V. RICHARDSON, JUDGE HANNAH TOWELL, IN HER OFFICIAL CAPACITY AS TAX ASSESSOR FOR CRAIGHEAD COUNTY, ARKANSAS APPELLEE AFFIRMED WENDY SCHOLTENS WOOD, Judge Appellants Baptist Memorial Hospital – Jonesboro, Inc., d/b/a NEA Baptist Memorial Hospital (“NEA Hospital”) and Northeast Arkansas Clinic Charitable Foundation, Inc., d/b/a NEA Baptist Clinic (“NEA Clinic”), appeal from the decision of the Craighead County Circuit Court in which the court ruled that certain property owned by NEA Hospital was not exempt from the payment of ad valorem taxes. We affirm.  I. Background NEA Hospital is an Arkansas nonprofit corporation that owns and operates a full- service hospital in Jonesboro. NEA Clinic, also an Arkansas nonprofit corporation, is a multi-specialty physician practice group with approximately two hundred doctors and nurse practitioners that provide outpatient medical services at over twenty locations in Northeast Arkansas. NEA Hospital and NEA Clinic are separate entities that are part of a large, multi- institutional healthcare system controlled by Baptist Memorial Health Care Corporation (“BMHCC”), which is headquartered in Memphis, Tennessee, and is a “charitable” entity under Tennessee law. NEA Hospital and NEA Clinic are affiliated in that they have the same sole corporate member, NEA Baptist Health System, Inc., an Arkansas nonprofit corporation, which has BMHCC as its sole corporate member.1 In 2014, NEA Hospital opened a newly constructed hospital complex in Jonesboro. The main hospital is located at 4800 East Johnson Avenue. Connected to the hospital is a five-floor medical office building, known as the “doctor’s building,” with an address of 4802 East Johnson Avenue. Both the main hospital and the doctor’s building are included on one parcel of land, parcel No. 01-144023-02900 (the “Hospital and Doctor’s Building parcel”), which contains roughly forty-eight acres. NEA Hospital owns all the real estate, buildings, 1 BMHCC is a twenty-two-hospital medical-care system with eighty to ninety entities— both nonprofit and for profit—that generates annual revenue of about $3.5 billion. BMHCC is a parent entity that provides financial support and operational services to its affiliated/subsidiary entities pursuant to a services agreement. NEA Hospital and NEA Clinic together pay about $22 million a year to BMHCC under the services agreement. 2 and parking lots on the Hospital and Doctor’s Building parcel. The Hospital and Doctor’s Building parcel was listed as tax exempt in the Craighead County Assessor’s records when the hospital opened in 2014. NEA Hospital leases physician office space in the doctor’s building to NEA Clinic at a market monthly rental rate of $243,364, or over $2.9 million a year, pursuant to a standard commercial lease agreement. NEA Clinic uses the doctor’s building mainly for specialty-care practices, including cardiology, general surgery, gastroenterology, endocrinology, neuros