Bill Text: MN SF2512 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Eating disorders treatment payments gross revenues tax exemption
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2012-03-19 - Referred to Taxes [SF2512 Detail]
Download: Minnesota-2011-SF2512-Introduced.html
1.2relating to taxation; gross revenues taxes; modifying credits and exemptions
1.3to include treatment of eating disorders;amending Minnesota Statutes 2010,
1.4section 295.53, subdivision 4a; Minnesota Statutes 2011 Supplement, section
1.5295.53, subdivision 1.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2011 Supplement, section 295.53, subdivision 1, is
1.8amended to read:
1.9 Subdivision 1. Exemptions. (a) The following payments are excluded from the
1.10gross revenues subject to the hospital, surgical center, or health care provider taxes under
1.11sections295.50 to
295.59 :
1.12(1) payments received for services provided under the Medicare program, including
1.13payments received from the government, and organizations governed by sections 1833
1.14and 1876 of title XVIII of the federal Social Security Act, United States Code, title 42,
1.15section 1395, and enrollee deductibles, coinsurance, and co-payments, whether paid by the
1.16Medicare enrollee or by a Medicare supplemental coverage as defined in section62A.011,
1.17subdivision 3 , clause (10), or by Medicaid payments under title XIX of the federal Social
1.18Security Act. Payments for services not covered by Medicare are taxable;
1.19(2) payments received for home health care services;
1.20(3) payments received from hospitals or surgical centers for goods and services on
1.21which liability for tax is imposed under section295.52 or the source of funds for the
1.22payment is exempt under clause (1), (7), (10), or (14);
1.23(4) payments received from health care providers for goods and services on which
1.24liability for tax is imposed under this chapter or the source of funds for the payment is
1.25exempt under clause (1), (7), (10), or (14);
2.1(5) amounts paid for legend drugs, other than nutritional products and blood and
2.2blood components, to a wholesale drug distributor who is subject to tax under section
2.3295.52, subdivision 3
, reduced by reimbursements received for legend drugs otherwise
2.4exempt under this chapter;
2.5(6) payments received by a health care provider or the wholly owned subsidiary of a
2.6health care provider for care provided outside Minnesota;
2.7(7) payments received from the chemical dependency fund under chapter 254B;
2.8(8) payments received in the nature of charitable donations that are not designated
2.9for providing patient services to a specific individual or group;
2.10(9) payments received for providing patient services incurred through a formal
2.11program of health care research conducted in conformity with federal regulations
2.12governing research on human subjects. Payments received from patients or from other
2.13persons paying on behalf of the patients are subject to tax;
2.14(10) payments received from any governmental agency for services benefiting the
2.15public, not including payments made by the government in its capacity as an employer
2.16or insurer or payments made by the government for services provided under general
2.17assistance medical care, the MinnesotaCare program, or the medical assistance program
2.18governed by title XIX of the federal Social Security Act, United States Code, title 42,
2.19sections 1396 to 1396v;
2.20(11) government payments received by the commissioner of human services for
2.21state-operated services;
2.22(12) payments received by a health care provider for hearing aids and related
2.23equipment or prescription eyewear delivered outside of Minnesota;
2.24(13) payments received by an educational institution from student tuition, student
2.25activity fees, health care service fees, government appropriations, donations, or grants,
2.26and for services identified in and provided under an individualized education program
2.27as defined in section256B.0625 or Code of Federal Regulations, chapter 34, section
2.28300.340(a). Fee for service payments and payments for extended coverage are taxable;
2.29(14) payments received under the federal Employees Health Benefits Act, United
2.30States Code, title 5, section 8909(f), as amended by the Omnibus Reconciliation Act of
2.311990. Enrollee deductibles, coinsurance, and co-payments are subject to tax; and
2.32(15) payments received under the federal Tricare program, Code of Federal
2.33Regulations, title 32, section 199.17(a)(7). Enrollee deductibles, coinsurance, and
2.34co-payments are subject to tax; and
2.35(16) payments received for inpatient or outpatient treatment of eating disorders in a
2.36nonhospital-based setting.
3.1(b) Payments received by wholesale drug distributors for legend drugs sold directly
3.2to veterinarians or veterinary bulk purchasing organizations are excluded from the gross
3.3revenues subject to the wholesale drug distributor tax under sections295.50 to
295.59 .
3.4 Sec. 2. Minnesota Statutes 2010, section 295.53, subdivision 4a, is amended to read:
3.5 Subd. 4a. Credit for research. (a) In addition to the exemptions allowed under
3.6subdivision 1, a hospital or health care provider may claim an annual credit against the
3.7total amount of tax, if any, the hospital or health care provider owes for that calendar year
3.8under sections295.50 to
295.57 . The credit shall equal 2.5 percent of revenues for patient
3.9services used to fund expenditures for qualifying research conducted by an allowable
3.10research program. The amount of the credit shall not exceed the tax liability of the hospital
3.11or health care provider under sections295.50 to
295.57 .
3.12 (b) For purposes of this subdivision, the following requirements apply:
3.13 (1) expenditures must be for program costs of qualifying research conducted by
3.14an allowable research program;
3.15 (2) an allowable research program must be a formal program of medical and health
3.16care research conducted by an entity which is exempt under section 501(c)(3) of the
3.17Internal Revenue Code as defined in section289A.02, subdivision 7 , or is owned and
3.18operated under authority of a governmental unit, or conducted in coordination with a
3.19public or private higher education institution for the purposes of treating eating disorders;
3.20 (3) qualifying research must:
3.21 (A) be approved in writing by the governing body of the hospital or health care
3.22provider which is taking the deduction under this subdivision;
3.23 (B) have as its purpose the development of new knowledge in basic or applied
3.24science relating to the diagnosis and treatment of conditions affecting the human body;
3.25 (C) be subject to review by individuals with expertise in the subject matter of the
3.26proposed study but who have no financial interest in the proposed study and are not
3.27involved in the conduct of the proposed study; and
3.28 (D) be subject to review and supervision by an institutional review board operating
3.29in conformity with federal regulations if the research involves human subjects or
3.30an institutional animal care and use committee operating in conformity with federal
3.31regulations if the research involves animal subjects. Research expenses are not exempt if
3.32the study is a routine evaluation of health care methods or products used in a particular
3.33setting conducted for the purpose of making a management decision. Costs of clinical
3.34research activities paid directly for the benefit of an individual patient are excluded from
4.1this exemption. Basic research in fields including biochemistry, molecular biology, and
4.2physiology are also included if such programs are subject to a peer review process.
4.3 (c) No credit shall be allowed under this subdivision for any revenue received by the
4.4hospital or health care provider in the form of a grant, gift, or otherwise, whether from a
4.5government or nongovernment source, on which the tax liability under section295.52 is
4.6not imposed.
4.7 (d) The taxpayer shall apply for the credit under this section on the annual return
4.8under section295.55, subdivision 5 .
4.9 (e) Beginning September 1, 2001, if the actual or estimated amount paid under this
4.10section for the calendar year exceeds $2,500,000, the commissioner of management and
4.11budget shall determine the rate of the research credit for the following calendar year to the
4.12nearest one-half percent so that refunds paid under this section will most closely equal
4.13$2,500,000. The commissioner of management and budget shall publish in the State
4.14Register by October 1 of each year the rate of the credit for the following calendar year. A
4.15determination under this section is not subject to the rulemaking provisions of chapter 14.
1.3to include treatment of eating disorders;amending Minnesota Statutes 2010,
1.4section 295.53, subdivision 4a; Minnesota Statutes 2011 Supplement, section
1.5295.53, subdivision 1.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2011 Supplement, section 295.53, subdivision 1, is
1.8amended to read:
1.9 Subdivision 1. Exemptions. (a) The following payments are excluded from the
1.10gross revenues subject to the hospital, surgical center, or health care provider taxes under
1.11sections
1.12(1) payments received for services provided under the Medicare program, including
1.13payments received from the government, and organizations governed by sections 1833
1.14and 1876 of title XVIII of the federal Social Security Act, United States Code, title 42,
1.15section 1395, and enrollee deductibles, coinsurance, and co-payments, whether paid by the
1.16Medicare enrollee or by a Medicare supplemental coverage as defined in section
1.17subdivision 3
1.18Security Act. Payments for services not covered by Medicare are taxable;
1.19(2) payments received for home health care services;
1.20(3) payments received from hospitals or surgical centers for goods and services on
1.21which liability for tax is imposed under section
1.22payment is exempt under clause (1), (7), (10), or (14);
1.23(4) payments received from health care providers for goods and services on which
1.24liability for tax is imposed under this chapter or the source of funds for the payment is
1.25exempt under clause (1), (7), (10), or (14);
2.1(5) amounts paid for legend drugs, other than nutritional products and blood and
2.2blood components, to a wholesale drug distributor who is subject to tax under section
2.4exempt under this chapter;
2.5(6) payments received by a health care provider or the wholly owned subsidiary of a
2.6health care provider for care provided outside Minnesota;
2.7(7) payments received from the chemical dependency fund under chapter 254B;
2.8(8) payments received in the nature of charitable donations that are not designated
2.9for providing patient services to a specific individual or group;
2.10(9) payments received for providing patient services incurred through a formal
2.11program of health care research conducted in conformity with federal regulations
2.12governing research on human subjects. Payments received from patients or from other
2.13persons paying on behalf of the patients are subject to tax;
2.14(10) payments received from any governmental agency for services benefiting the
2.15public, not including payments made by the government in its capacity as an employer
2.16or insurer or payments made by the government for services provided under general
2.17assistance medical care, the MinnesotaCare program, or the medical assistance program
2.18governed by title XIX of the federal Social Security Act, United States Code, title 42,
2.19sections 1396 to 1396v;
2.20(11) government payments received by the commissioner of human services for
2.21state-operated services;
2.22(12) payments received by a health care provider for hearing aids and related
2.23equipment or prescription eyewear delivered outside of Minnesota;
2.24(13) payments received by an educational institution from student tuition, student
2.25activity fees, health care service fees, government appropriations, donations, or grants,
2.26and for services identified in and provided under an individualized education program
2.27as defined in section
2.28300.340(a). Fee for service payments and payments for extended coverage are taxable;
2.29(14) payments received under the federal Employees Health Benefits Act, United
2.30States Code, title 5, section 8909(f), as amended by the Omnibus Reconciliation Act of
2.311990. Enrollee deductibles, coinsurance, and co-payments are subject to tax;
2.32(15) payments received under the federal Tricare program, Code of Federal
2.33Regulations, title 32, section 199.17(a)(7). Enrollee deductibles, coinsurance, and
2.34co-payments are subject to tax; and
2.35(16) payments received for inpatient or outpatient treatment of eating disorders in a
2.36nonhospital-based setting.
3.1(b) Payments received by wholesale drug distributors for legend drugs sold directly
3.2to veterinarians or veterinary bulk purchasing organizations are excluded from the gross
3.3revenues subject to the wholesale drug distributor tax under sections
3.4 Sec. 2. Minnesota Statutes 2010, section 295.53, subdivision 4a, is amended to read:
3.5 Subd. 4a. Credit for research. (a) In addition to the exemptions allowed under
3.6subdivision 1, a hospital or health care provider may claim an annual credit against the
3.7total amount of tax, if any, the hospital or health care provider owes for that calendar year
3.8under sections
3.9services used to fund expenditures for qualifying research conducted by an allowable
3.10research program. The amount of the credit shall not exceed the tax liability of the hospital
3.11or health care provider under sections
3.12 (b) For purposes of this subdivision, the following requirements apply:
3.13 (1) expenditures must be for program costs of qualifying research conducted by
3.14an allowable research program;
3.15 (2) an allowable research program must be a formal program of medical and health
3.16care research conducted by an entity which is exempt under section 501(c)(3) of the
3.17Internal Revenue Code as defined in section
3.18operated under authority of a governmental unit, or conducted in coordination with a
3.19public or private higher education institution for the purposes of treating eating disorders;
3.20 (3) qualifying research must:
3.21 (A) be approved in writing by the governing body of the hospital or health care
3.22provider which is taking the deduction under this subdivision;
3.23 (B) have as its purpose the development of new knowledge in basic or applied
3.24science relating to the diagnosis and treatment of conditions affecting the human body;
3.25 (C) be subject to review by individuals with expertise in the subject matter of the
3.26proposed study but who have no financial interest in the proposed study and are not
3.27involved in the conduct of the proposed study; and
3.28 (D) be subject to review and supervision by an institutional review board operating
3.29in conformity with federal regulations if the research involves human subjects or
3.30an institutional animal care and use committee operating in conformity with federal
3.31regulations if the research involves animal subjects. Research expenses are not exempt if
3.32the study is a routine evaluation of health care methods or products used in a particular
3.33setting conducted for the purpose of making a management decision. Costs of clinical
3.34research activities paid directly for the benefit of an individual patient are excluded from
4.1this exemption. Basic research in fields including biochemistry, molecular biology, and
4.2physiology are also included if such programs are subject to a peer review process.
4.3 (c) No credit shall be allowed under this subdivision for any revenue received by the
4.4hospital or health care provider in the form of a grant, gift, or otherwise, whether from a
4.5government or nongovernment source, on which the tax liability under section
4.6not imposed.
4.7 (d) The taxpayer shall apply for the credit under this section on the annual return
4.8under section
4.9 (e) Beginning September 1, 2001, if the actual or estimated amount paid under this
4.10section for the calendar year exceeds $2,500,000, the commissioner of management and
4.11budget shall determine the rate of the research credit for the following calendar year to the
4.12nearest one-half percent so that refunds paid under this section will most closely equal
4.13$2,500,000. The commissioner of management and budget shall publish in the State
4.14Register by October 1 of each year the rate of the credit for the following calendar year. A
4.15determination under this section is not subject to the rulemaking provisions of chapter 14.
