S-5744.1  _______________________________________________

                    SUBSTITUTE SENATE BILL 6608

          _______________________________________________

State of Washington      53rd Legislature     1994 Regular Session

By Senate Committee on Ways & Means (originally sponsored by Senators Rinehart and Gaspard)

Read first time 03/03/94.

Relating to the business and occupation taxation of moneys received by health or social welfare organizations from governmental entities for health or social welfare services.

    AN ACT Relating to the business and occupation taxation of moneys received by health or social welfare organizations from governmental entities for health or social welfare services; and creating a new section.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1.  The 1993 health care reform act, chapter 492, Laws of 1993, established a business and occupation tax on nonprofit and public hospitals to finance, in part, health care coverage for the citizens of the state.  However, by inadvertent error, the health care reform act failed to address an existing deduction from the business and occupation tax for governmental payments to nonprofit organizations for health and social welfare services, such as federal medicaid and medicare payments.  Failure to correct this error will result in revenues significantly less than those assumed by the legislature in adopting the health care reform act and making appropriations from the health services account.  It is therefore the intent of this act to clarify that revenues received by nonprofit and public hospitals from governmental entities for health and social services are subject to the business and occupation tax as intended by chapter 492, Laws of 1993.

                            --- END ---