1.1                          A bill for an act
  1.2             relating to taxation; gross revenues tax on wholesale 
  1.3             drug distributors; exempting payments from federal 
  1.4             agencies and instrumentalities; amending Minnesota 
  1.5             Statutes 1994, section 295.53, subdivision 1. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1994, section 295.53, 
  1.8   subdivision 1, is amended to read: 
  1.9      Subdivision 1.  [EXEMPTIONS.] (a) The following payments 
  1.10  are excluded from the gross revenues subject to the hospital, 
  1.11  surgical center, or health care provider taxes under sections 
  1.12  295.50 to 295.57: 
  1.13     (1) payments received for services provided under the 
  1.14  Medicare program, including payments received from the 
  1.15  government, and organizations governed by sections 1833 and 1876 
  1.16  of title XVIII of the federal Social Security Act, United States 
  1.17  Code, title 42, section 1395, and enrollee deductibles, 
  1.18  coinsurance, and copayments, whether paid by the individual or 
  1.19  by insurer or other third party.  Payments for services not 
  1.20  covered by Medicare are taxable; 
  1.21     (2) medical assistance payments including payments received 
  1.22  directly from the government or from a prepaid plan; 
  1.23     (3) payments received for home health care services; 
  1.24     (4)  payments received from hospitals or surgical centers 
  1.25  for goods and services on which liability for tax is imposed 
  2.1   under section 295.52 or the source of funds for the payment is 
  2.2   exempt under clause (1), (2), (7), (8), or (10); 
  2.3      (5) payments received from health care providers for goods 
  2.4   and services on which liability for tax is imposed under 
  2.5   sections 295.52 to 295.57 or the source of funds for the payment 
  2.6   is exempt under clause (1), (2), (7), (8), or (10); 
  2.7      (6) amounts paid for legend drugs, other than nutritional 
  2.8   products, to a wholesale drug distributor reduced by 
  2.9   reimbursements received for legend drugs under clauses (1), (2), 
  2.10  (7), and (8); 
  2.11     (7) payments received under the general assistance medical 
  2.12  care program including payments received directly from the 
  2.13  government or from a prepaid plan; 
  2.14     (8) payments received for providing services under the 
  2.15  MinnesotaCare program including payments received directly from 
  2.16  the government or from a prepaid plan and enrollee deductibles, 
  2.17  coinsurance, and copayments; 
  2.18     (9) payments received by a resident health care provider or 
  2.19  the wholly owned subsidiary of a resident health care provider 
  2.20  for care provided outside Minnesota to a patient who is not 
  2.21  domiciled in Minnesota; 
  2.22     (10) payments received from the chemical dependency fund 
  2.23  under chapter 254B; 
  2.24     (11) payments received in the nature of charitable 
  2.25  donations that are not designated for providing patient services 
  2.26  to a specific individual or group; 
  2.27     (12) payments received for providing patient services if 
  2.28  the services are incidental to conducting medical research; 
  2.29     (13) payments received from any governmental agency for 
  2.30  services benefiting the public, not including payments made by 
  2.31  the government in its capacity as an employer or insurer; 
  2.32     (14) payments received for services provided by community 
  2.33  residential mental health facilities licensed under Minnesota 
  2.34  Rules, parts 9520.0500 to 9520.0690, community support programs 
  2.35  and family community support programs approved under Minnesota 
  2.36  Rules, parts 9535.1700 to 9535.1760, and community mental health 
  3.1   centers as defined in section 245.62, subdivision 2; 
  3.2      (15) government payments received by a regional treatment 
  3.3   center; 
  3.4      (16) payments received for hospice care services; 
  3.5      (17) payments received by a resident health care provider 
  3.6   or the wholly owned subsidiary of a resident health care 
  3.7   provider for medical supplies, appliances and equipment 
  3.8   delivered outside of Minnesota; 
  3.9      (18) payments received for services provided by community 
  3.10  supervised living facilities for persons with mental retardation 
  3.11  or related conditions licensed under Minnesota Rules, parts 
  3.12  4665.0100 to 4665.9900; 
  3.13     (19) payments received by a post-secondary educational 
  3.14  institution from student tuition, student activity fees, health 
  3.15  care service fees, government appropriations, donations, or 
  3.16  grants.  Fee for service payments and payments for extended 
  3.17  coverage are taxable; and 
  3.18     (20) payments received for services provided by: 
  3.19  residential care homes licensed under chapter 144B; board and 
  3.20  lodging establishments providing only custodial services, that 
  3.21  are licensed under chapter 157 and registered under section 
  3.22  157.031 to provide supportive services or health supervision 
  3.23  services; and assisted living programs, congregate housing 
  3.24  programs, and other senior housing options. 
  3.25     (b) The wholesale drug distributor tax does not apply to 
  3.26  gross revenues of a wholesale drug distributor received from: 
  3.27     (1) an Indian tribe; 
  3.28     (2) an agency or instrumentality of the United States 
  3.29  government or other similar entity from which the wholesale drug 
  3.30  distributor may not collect the tax under federal law; and 
  3.31     (3) a private entity from which under federal law the 
  3.32  wholesale drug distributor may not collect the tax. 
  3.33     Sec. 2.  [EFFECTIVE DATE.] 
  3.34     Section 1 is effective retroactively for gross revenues 
  3.35  received after December 31, 1993.