FISCAL NOTE

Date Requested: January 20, 2023
Time Requested: 09:25 AM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
2771 Introduced HB2759
CBD Subject: Taxation


FUND(S):

Medicaid State Share Fund

Sources of Revenue:

Other Fund Medicaid State Share Fund

Legislation creates:

Increases Revenue From Existing Sources, Increases Existing Expenses



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


The stated purpose of this bill is to update the health care provider tax. According to our interpretation, the bill would increase the tax rate on the gross receipts of certain acute care hospitals from 0.13 percent to 0.18 percent. The tax is imposed on eligible acute care hospitals which provide inpatient or outpatient hospital services in this state. The tax is intended to enhance practitioner fee schedules for practitioners employed by eligible acute care hospitals. Hospitals which are designated as “critical access hospitals” are exempt from the tax. There is no internal effective date; therefore, if passed, the legislation would become effective 90 days from passage. Per our interpretation, the legislation, if passed, would increase Medicaid State Share Fund collections by $1.9 million in FY2024, $2.6 million in FY2025, and by increasing amounts in subsequent fiscal years. Additional administrative costs incurred by the State Tax Department would be $5,000 in FY2023.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2023
Increase/Decrease
(use"-")
2024
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 5,000 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 5,000 0 0
2. Estimated Total Revenues 0 1,900,000 2,600,000


Explanation of above estimates (including long-range effect):


According to our interpretation, the bill would increase the tax rate on the gross receipts of certain acute care hospitals from 0.13 percent to 0.18 percent. The tax is imposed on eligible acute care hospitals which provide inpatient or outpatient hospital services in this state. The tax is intended to enhance practitioner fee schedules for practitioners employed by eligible acute care hospitals. Hospitals which are designated as “critical access hospitals” are exempt from the tax. There is no internal effective date; therefore, if passed, the legislation would become effective 90 days from passage. Per our interpretation, the legislation, if passed, would increase Medicaid State Share Fund collections by $1.9 million in FY2024, $2.6 million in FY2025, and by increasing amounts in subsequent fiscal years. Additional administrative costs incurred by the State Tax Department would be $5,000 in FY2023



Memorandum


The stated purpose of this bill is to update the health care provider tax. This bill removes §11-27-39(h), which provided an effective beginning date of July 1, 2021. Deletion of §11-27-39(h) without replacing it with another effective date may cause confusion about when the rate change become effective.



    Person submitting Fiscal Note: Mark Muchow
    Email Address: kerri.r.petry@wv.gov