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HOUSE BILL 2732
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Passed Legislature - 2002 Regular Session
State of Washington 57th Legislature 2002
Regular Session
By
Read first time 01/25/2002. Referred to
Committee on Finance.
Excluding government
subsidized social welfare compensation from taxation.
AN ACT Relating to the
tax treatment of revenue from federal or state subsidized health care; amending
RCW 82.04.4297; adding a new section to chapter 82.04 RCW; creating new
sections; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF
WASHINGTON:
NEW SECTION. Sec.
1. The legislature finds
that the provision of health services to those people who receive federal or
state subsidized health care benefits by reason of age, disability, or lack of
income is a recognized, necessary, and vital governmental function. As a result,
the legislature finds that it would be inconsistent with that governmental
function to tax amounts received by a public hospital or nonprofit hospital
qualifying as a health and social welfare organization, when the amounts are
paid under a health service program subsidized by federal or state government.
Further, the tax status of these amounts should not depend on whether the
amounts are received directly from the qualifying program or through a managed
health care organization under contract to manage benefits for a qualifying
program. Therefore, the legislature adopts this act to provide a clear and
understandable deduction for these amounts, and to provide refunds for taxes
paid as specified in section 4 of this act.
NEW SECTION. Sec.
2. A new section is added
to chapter 82.04 RCW to read as follows:
A public hospital that
is owned by a municipal corporation or political subdivision, or a nonprofit
hospital that qualifies as a health and social welfare organization as defined
in RCW 82.04.431, may deduct from the measure of tax amounts received as
compensation for health care services covered under the federal medicare
program authorized under Title XVIII of the federal social security act;
medical assistance, children's health, or other program under chapter 74.09
RCW; or for the state of Washington basic health plan under chapter 70.47 RCW.
The deduction authorized by this section does not apply to amounts received
from patient copayments or patient deductibles.
Sec. 3. RCW 82.04.4297 and 2001
2nd sp.s. c 23 s 2 are each amended to read as follows:
In computing tax there
may be deducted from the measure of tax amounts received from the United States
or any instrumentality thereof or from the state of Washington or any municipal
corporation or political subdivision thereof as compensation for, or to
support, health or social welfare services rendered by a health or social
welfare organization or by a municipal corporation or political subdivision,
except deductions are not allowed under this section for amounts that are
received under an employee benefit plan. ((For purposes of this section,
"amounts received from" includes amounts received by a health or
social welfare organization that is a nonprofit hospital or public hospital
from a managed care organization or other entity that is under contract to
manage health care benefits for the federal medicare program authorized under
Title XVIII of the federal social security act; for a medical assistance,
children's health, or other program authorized under chapter 74.09 RCW; or for
the state of Washington basic health plan authorized under chapter 70.47 RCW,
to the extent that these amounts are received as compensation for health care
services within the scope of benefits covered by the pertinent government
health care program.))
NEW SECTION. Sec.
4. A public hospital owned
by a municipal corporation or political subdivision, or a nonprofit hospital
that qualifies as a health and social welfare organization under RCW 82.04.431,
is entitled to:
(1) A refund of
business and occupation tax paid between January 1, 1998, and the effective
date of this act on amounts that would be deductible under section 2 of this act;
and
(2) A waiver of tax
liability for accrued, but unpaid taxes that would be deductible under section
2 of this act.
NEW
SECTION. Sec. 5. This act is necessary for
the immediate preservation of the public peace, health, or safety, or support
of the state government and its existing public institutions, and takes effect
immediately.
