COLUMBUS, Ohio—A judge in the U.S. District Court for the southern district of Ohio, eastern division, ruled against VSP in the managed-vision giant’s latest attempt to regain tax payments it made after losing its tax-free status seven years ago. The company’s status as a non-profit entity was not affected by this court decision.

In his ruling, Judge James L. Graham noted VSP’s arguments in the case that its operations “promote the social welfare purpose of ‘health,’” and that the company should be entitled to a tax exemption because it has “engaged in considerable charity and community outreach work to non-subscribers.” But according to court documents in the case, Graham said in his ruling that those activities “were not the activity in which plaintiffs were primarily engaged. Those efforts were minimal in relation to plaintiffs’ non-exempt activity of providing vision services for subscribers.”

VSP had tax-exempt status from 1955 to 2003, when that status was revoked by the Internal Revenue Service. The company has continued to do business as a not-for-profit since then, and has been paying federal income taxes while appealing that revocation and seeking a refund of the taxes it has paid through the court.

Noting that the company’s vision-benefits business model has not changed since it had tax-exempt status, a VSP spokesman told VM the company is still analyzing Graham’s decision “and determining next steps.” He said, “We remain interested in the IRS articulating clear rules for not-for-profit health plans to qualify for tax-exemption.”

Added the spokesman, “VSP is today a tax paying not-for-profit committed to benefiting the communities we serve including the nearly 600,000 low-income, uninsured children who have received free eyecare and eyewear at a cost of over $115 million through our Sight for Students program.” The company also operates a Mobile Eyes program, in partnerhip with Transitions, and the VSP Eyes of Hope program. ■ ■