BILL REQ. #:  Z-0283.3 

Read first time 01/13/2005.   Referred to Committee on Finance.

     AN ACT Relating to a tax on physician services to increase funding for the health services account; adding a new chapter to Title 82 RCW; providing an effective date; and declaring an emergency.

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

NEW SECTION.  Sec. 1   The definitions in this section apply throughout this chapter, unless the context clearly requires otherwise.
     (1) "Doctor of medicine" has the same meaning as "physician." "Physician" means a person licensed under chapter 18.71 RCW.
     (2) "Doctor of osteopathy" has the same meaning as "osteopathic physician." "Osteopathic physician" means a person licensed under chapter 18.57 RCW.
     (3) "Gross income" means all revenue, without deduction, that is derived from the performance of physician services and includes gross proceeds of sales, compensation for the rendition of services, gains realized from trading in stocks, bonds, or other evidences of indebtedness, interest, discount, rents, royalties, fees, commissions, dividends, and other emoluments however designated, all without any deduction on account of the cost of tangible property sold, the cost of materials used, labor costs, interest, discount, delivery costs, taxes, or any other expense whatsoever paid or accrued and without any deduction on account of losses.
     (4) "Physician services" means activities substantially related to the provision of services by doctors of medicine, doctors of osteopathy, or persons under the direction or control of doctors of medicine or osteopathy. "Physician services" includes services provided through clinics, hospitals, offices, or similar places where doctors of medicine and doctors of osteopathy provide those services.

NEW SECTION.  Sec. 2   (1) In addition to any other tax, a tax is imposed on persons engaging within this state in the business activity of providing physician services.
     (2) The tax is equal to the gross income multiplied by the rate of one percent.
     (3) A person entitled under RCW 82.04.460(1) to apportion gross income taxable under chapter 82.04 RCW, where such income is also taxable under this chapter, must apportion that gross income subject to tax under this chapter as provided in RCW 82.04.460(1) and in the same manner as for the tax imposed under chapter 82.04 RCW.
     (4) In computing the tax imposed under this chapter, there may be deducted from the measure of tax the amount of bad debts, as that term is used in 26 U.S.C. Sec. 166, as amended or renumbered as of January 1, 2003, on which tax was previously paid under this chapter.
     (5) Moneys collected under this chapter shall be deposited into the health services account in accordance with RCW 43.72.900.

NEW SECTION.  Sec. 3   This chapter does not apply to services provided by a:
     (1) Hospital as defined in RCW 70.41.020;
     (2) Health maintenance organization as defined in RCW 48.46.020; or
     (3) Person in respect to his or her employment in the capacity of an employee or servant as distinguished from that of an independent contractor.

NEW SECTION.  Sec. 4   (1) Chapter 82.32 RCW applies to the administration of the tax imposed by this chapter, in addition to any other provisions of law for the payment and enforcement of the tax imposed by this chapter.
     (2) The tax due dates, reporting periods, and return requirements applicable to the tax imposed in chapter 82.04 RCW apply to the tax imposed in this chapter.
     (3) Unless the context clearly requires otherwise or the term is defined in section 1 of this act, the definitions in chapter 82.04 RCW apply to this chapter.

NEW SECTION.  Sec. 5   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 6   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 July 1, 2005.

NEW SECTION.  Sec. 7   Sections 1 through 6 of this act constitute a new chapter in Title 82 RCW.