H-3811.1          _______________________________________________

                                  HOUSE BILL 2400

                  _______________________________________________

State of Washington              54th Legislature             1996 Regular Session

By Representatives B. Thomas, Morris, Dyer and Cody

Read first time 01/10/96.  Referred to Committee on Finance.

Extending a tax exemption for prepayments for health care services provided under Title XVIII (medicare) of the social security act.

     AN ACT Relating to a tax exemption for prepayments for health care services provided under Title XVIII (medicare) of the federal social security act; and amending RCW 48.14.0201.

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

     Sec. 1.  RCW 48.14.0201 and 1993 sp.s. c 25 s 601 are each amended to read as follows:

     (1) As used in this section, "taxpayer" means a health maintenance organization, as defined in RCW 48.46.020, or a health care service contractor, as defined in RCW 48.44.010((, or a certified health plan certified under RCW 48.43.030)).

     (2) Each taxpayer shall pay a tax on or before the first day of March of each year to the state treasurer through the insurance commissioner's office.  The tax shall be equal to the total amount of all premiums and prepayments for health care services received by the taxpayer during the preceding calendar year multiplied by the rate of two percent.

     (3) Taxpayers shall prepay their tax obligations under this section.  The minimum amount of the prepayments shall be percentages of the taxpayer's tax obligation for the preceding calendar year recomputed using the rate in effect for the current year.  For the prepayment of taxes due during the first calendar year, the minimum amount of the prepayments shall be percentages of the taxpayer's tax obligation that would have been due had the tax been in effect during the previous calendar year.  The tax prepayments shall be paid to the state treasurer through the commissioner's office by the due dates and in the following amounts:

     (a) On or before June 15, forty-five percent;

     (b) On or before September 15, twenty-five percent;

     (c) On or before December 15, twenty-five percent.

     (4) For good cause demonstrated in writing, the commissioner may approve an amount smaller than the preceding calendar year's tax obligation as recomputed for calculating the health maintenance organization's, health care service contractor's, or certified health plan's prepayment obligations for the current tax year.

     (5) Moneys collected under this section shall be deposited in the general fund through March 31, 1996, and in the health services account under RCW 43.72.900 after March 31, 1996.

     (6) The taxes imposed in this section do not apply to:

     (a) Amounts received by any taxpayer from the United States or any instrumentality thereof as prepayments for health care services provided under Title XVIII (medicare) of the federal social security act.  ((This exemption shall expire July 1, 1997.))

     (b) Amounts received by any health care service contractor, as defined in RCW 48.44.010, as prepayments for health care services included within the definition of practice of dentistry under RCW 18.32.020.  ((This exemption does not apply to amounts received under a certified health plan certified under RCW 48.43.030.))

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