CROWN POINT | Lake County Assessor Paul Karras said the county may decide later this week whether to appeal a state ruling to exempt from taxation five doctors' offices and a chaplain's home associated with St. Margaret Mercy Healthcare Centers.

The Indiana Board of Tax Review recently ruled in favor of the hospital's position that its charitable work with uninsured patients justifies the property tax exemptions for the physicians' offices.

The state board ruled the chaplain's home, located on the state line near the hospital campus in downtown Hammond, was exempt because the chaplain performed masses at the hospital.

The state board overturned an earlier decision by the Lake County Property Tax Board of Appeals denying exemptions.

Robert Anderson, a Schererville attorney representing the hospital, said Monday the state upheld the hospital's position that "the physicians are employed by the hospital, and their practices are related to and support the hospital's ethical and health care mission."

Karras said, "We aren't asking for 100 percent of the taxes, just 35 to 40 percent, but the state board usually favors the taxpayer."

Karras said he has an attorney's office studying whether an appeal would be worth the legal costs.

Sharon Fleming, who investigates nonprofit organizations for the assessor and local tax board, said the state decision could have a significant monetary effect on the county because a number of local hospitals claim similar exemptions for outpatient clinics and other health care properties.

She said the county might have to refund millions of dollars in past-collected taxes and would lose future revenue.

Anderson said the county has estimated it would have to refund hundreds of thousands of tax dollars St. Margaret has paid since 2001.