HF 85

as introduced - 92nd Legislature (2021 - 2022) Posted on 01/14/2021 02:19pm

A bill for an act
relating to taxation; gross revenues; providing a credit against the provider tax for
certain nonprofits; proposing coding for new law in Minnesota Statutes, chapter
295.

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

Section 1.

new text begin [295.541] CHARITABLE NONPROFIT TAX CREDIT.
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new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following definitions
apply.
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new text begin (b) "Government insurance reimbursement rate" means the ratio, stated as a percentage,
of a qualified nonprofit entity's (1) gross revenues received attributable to payments from
government insurance to (2) total charges to government insurance.
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new text begin (c) "Payments from government insurance" means the following payments received for
patient services:
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new text begin (1) payments under the Medicaid program;
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new text begin (2) payments from a health care plan administered by the United States Department of
Veterans Affairs;
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new text begin (3) payments from the Minnesota senior health options demonstration project and the
Minnesota disability health options demonstration project, authorized under section 256B.69,
subdivision 23;
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new text begin (4) payments from the MinnesotaCare program under sections 256L.01 to 256L.10; and
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new text begin (5) payments from any other prepaid health plans under section 256B.69.
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new text begin (d) "Payments from private insurance" means payments received for patient services
from a health insurance plan not described in paragraph (c).
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new text begin (e) "Private insurance reimbursement rate" means the ratio, stated as a percentage, of a
qualified nonprofit entity's (1) gross revenues received attributable to payments from private
insurance to (2) total charges to private insurance.
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new text begin (f) "Qualified nonprofit entity" means a health care provider that is exempt under section
501(c)(3) of the Internal Revenue Code as defined in section 289A.02, subdivision 7.
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new text begin (g) "Reimbursement rate disparity" means the percentage point difference resulting from
a qualified nonprofit entity subtracting the entity's government insurance reimbursement
rate from the entity's private insurance reimbursement rate. The reimbursement rate disparity
may not be less than zero.
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new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin A qualified nonprofit entity is allowed a credit against the tax
under sections 295.52 to 295.59 as provided in this section.
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new text begin Subd. 3. new text end

new text begin Calculation of credit. new text end

new text begin The credit under this section is the result of the following
calculation:
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new text begin (1) dividing the qualified nonprofit entity's reimbursement rate disparity by 100;
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new text begin (2) multiplying the qualified nonprofit entity's total gross receipts by the result of clause
(1);
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new text begin (3) then subtracting from the qualified nonprofit entity's total gross receipts the result
of clause (2);
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new text begin (4) then multiplying by the rate in section 295.52, subdivision 2, the result of clause (3);
and
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new text begin (5) then determining the difference between the qualified nonprofit entity's tax due on
all gross receipts less the result of clause (4).
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for gross revenues received after June
30, 2021.
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