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S.F. No. 687, 1st Engrossment - 87th Legislative Session (2011-2012)   Posted on Mar 21, 2012

1.1A bill for an act
1.2relating to taxation; gross revenues; exempting certain payments;amending
1.3Minnesota Statutes 2011 Supplement, section 295.53, subdivision 1.

1.5    Section 1. Minnesota Statutes 2011 Supplement, section 295.53, subdivision 1, is
1.6amended to read:
1.7    Subdivision 1. Exemptions. (a) The following payments are excluded from the
1.8gross revenues subject to the hospital, surgical center, or health care provider taxes under
1.9sections 295.50 to 295.59:
1.10(1) payments received for services provided under the Medicare program, including
1.11payments received from the government, and organizations governed by sections 1833
1.12and 1876 of title XVIII of the federal Social Security Act, United States Code, title 42,
1.13section 1395, and enrollee deductibles, coinsurance, and co-payments, whether paid by the
1.14Medicare enrollee or by a Medicare supplemental coverage as defined in section 62A.011,
1.15subdivision 3
, clause (10), or by Medicaid payments under title XIX of the federal Social
1.16Security Act. Payments for services not covered by Medicare are taxable;
1.17(2) payments received for home health care services;
1.18(3) payments received from hospitals or surgical centers for goods and services on
1.19which liability for tax is imposed under section 295.52 or the source of funds for the
1.20payment is exempt under clause (1), (7), (10), or (14);
1.21(4) payments received from health care providers for goods and services on which
1.22liability for tax is imposed under this chapter or the source of funds for the payment is
1.23exempt 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 section 256B.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 for laboratory services to examine and report results for a biological
2.36specimen that is collected outside the state.
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 295.50 to 295.59.
3.4EFFECTIVE DATE.This section is effective for gross revenues received from
3.5laboratory services provided on or after July 1, 2013.