_______________________________________________
HOUSE
BILL 2732
_______________________________________________
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.
Passed the House February 18, 2002.
Passed the Senate March 12, 2002.
Approved by the Governor
April 2, 2002.
Filed
in Office of Secretary of State April 2, 2002.
