Minnesota:
Like Illinois, Minnesota has rules relating to its combined reporting statute (including Rules 8019.0100, 8019.0300, 8019.0405, and 8019.0500, Minn. Rules). The section of this rule order that provides guidance in determining a “unitary business" (s.
Tax 2.62) is modeled after Minnesota's rule 8019.0100, with some modifications.
Summary of factual data and analytical methodologies
The department developed these rules based upon research of the combined reporting laws, rules, regulations, published guidance, and tax form instructions of other states. The Illinois and Minnesota regulations referenced above were frequently used as a resource, in addition to various law journal articles and tax publications.
The combined reporting regulations recently promulgated by Massachusetts (830 CMR 63.32B.2) were heavily relied upon. The Massachusetts combined reporting law (M.G.L. c. 63 §32B), like Wisconsin's, is first effective for taxable years beginning on or after January 1, 2009, and Wisconsin's law has many similarities with the Massachusetts law.
The department also studied the regulations under section
1502 of the Internal Revenue Code, relating to consolidated returns.
Analysis and supporting documents used to determine effect on small business
Combined reporting primarily affects larger corporations, rather than small businesses. Combined reporting is required for regular “C" corporations, but is not required for the types of entities that are more characteristic of small businesses, such as:
•
Sole proprietorships,
•
Partnerships,
•
Limited liability companies taxed as partnerships, and
•
S corporations
Anticipated costs incurred by private sector
This emergency rule does not have a significant fiscal effect on the private sector independently from the statute it interprets.
Small Business Impact
This emergency rule does not have a significant effect on small business.
Fiscal Estimate
The proposed rules create Tax 2.60 through 2.67 to incorporate tax law changes included in
2009 Act 2 and
2009 Act 28 related to combined reporting for commonly controlled groups of corporations.
The fiscal effect from implementation of combined reporting was included in the fiscal effect for Act 2, and the fiscal effect of certain changes to combined reporting that were a part of Act 28 were included in the fiscal effect for the Act. The administrative rules for these provisions have no fiscal effect independent of Acts 2 and 28.
In addition to the rule changes made necessary by the statutory changes under Acts 2 and 28, the rule also specifies that basis for depreciable assets for corporations that are subject to tax for the first time shall be the federal basis of the assets, except that the basis shall be computed without regard to any bonus depreciation claimed for federal purposes as required by statute. The fiscal effect of this provision is unknown.
Agency Contact Person
Dale Kleven, Dept. of Revenue
Mail Stop 6-40
2135 Rimrock Road, PO Box 8933
Madison WI 53708-8933
Telephone: (608) 266-8253
Notice of Hearing
Revenue
NOTICE IS HEREBY GIVEN That pursuant to ss.
146.98 (3),
(4), and
(5) and
227.24 Stats., the Department of Revenue will hold a public hearing to consider emergency rules and the creation of permanent rules revising Chapter
Tax 1, relating to the ambulatory surgical center assessment.
Hearing Information
The hearing will be held:
Date and Time Location
February 11, 2010 Events Room
at 1:00 p.m. State Revenue Building
2135 Rimrock Road
Madison, Wisconsin
Handicap access is available at the hearing location.
Submission of Written Comments
Interested persons are invited to appear at the hearing and may make an oral presentation. It is requested that written comments reflecting the oral presentation be given to the department at the hearing. Written comments may also be submitted to the contact person shown under Agency Contact Person listed below no later than February 18, 2010, and will be given the same consideration as testimony presented at the hearing.
Analysis Prepared by the Department of Revenue
Statutes interpreted
Statutory authority
Related statute or rule
Section
50.38, Stats., imposes a hospital assessment, and s.
50.14, Stats., imposes an assessment on licensed nursing home beds and intermediate care facilities for the mentally retarded (ICF-MR).
Plain language analysis
This proposed rule does the following:
•
Establishes the requirements for administration of the ambulatory surgical center assessment.
•
Describes how the amount of the assessment for each ambulatory surgical center is determined.
•
Details how the department will collect assessments.
•
Provides guidance regarding data required to be submitted to the department to determine assessment amounts.
•
Specifies the filing, reporting, and payment deadlines for the assessment, and penalties imposed for failure to meet the requirements.
Comparison with federal regulations
Federal law
42 CFR §433.68 describes permissible health care-related taxes that states may impose without a reduction in Medicaid Federal Financial Participation (FFP) in the medical assistance program jointly funded by the federal government and the state. The taxes must be broad based, uniformly imposed throughout a jurisdiction, and cannot exceed 5.5% of revenues. Ambulatory surgical center or ASC is defined in
42 CFR §416.2 as “any distinct entity that operates for the purposes of providing surgical services to patients not requiring hospitalization, has an agreement with the Center for Medicare and Medicaid Services (CMS) to participate in Medicare as an ASC, and meets the conditions set forth in subparts B and C of this part."
Comparison with rules in adjacent states
Illinois imposes health care provider taxes on hospitals, intermediate care facilities for the mentally retarded or developmentally disabled, and nursing homes. There is no assessment of ambulatory surgical centers.
Iowa imposes a health care provider tax on intermediate care facilities for the mentally retarded or developmentally disabled. There is no assessment on ambulatory surgical centers.
Michigan imposes a health care provider tax on hospitals, managed care organizations, nursing homes and community mental health programs. There is no assessment on ambulatory surgical centers.
Minnesota imposes a health care provider tax on hospitals, intermediate care facilities for the mentally retarded or developmentally disabled, managed care organizations, and nursing homes. In addition, a tax of 2% of total gross receipts is imposed on surgical centers.
Summary of factual data and analytical methodologies
2009 Wisconsin Act 28 created s.
146.98 Stats., imposing an assessment on Medicare-certified ambulatory surgical centers in Wisconsin. The statute directs the department of revenue to allocate any assessment imposed among ambulatory surgical centers in proportion to their gross patient revenue. The department may determine the amount of the assessment, collect the assessment, require ambulatory surgical centers to provide any data that is required to determine assessment amounts, establish deadlines by which assessments shall be paid, and impose penalties for failure to comply with the requirements of the statute or any rules promulgated. The department is directed to transfer 99.5 percent of the assessments collected to the medical assistance trust fund and retain 0.5% of the assessment revenues collected to support the administrative costs related to the assessment.
Within the provisions of s.
146.98 (5), Stats., is a requirement that the department promulgate rules for the administration of the assessment.
In consultation with ambulatory surgical centers, the departments of administration and health services, the department has created this proposed rule order to satisfy the above requirements.
Analysis and supporting documents used to determine effect on small business
This proposed rule is created in accordance with
2009 Wisconsin Act 28 to administer and enforce statutory requirements relating to the assessment of ambulatory surgical centers. As the rule does not impose any significant financial or other compliance burden, the department has determined that it does not have a significant effect on small business.
Anticipated costs incurred by private sector
This proposed rule does not have a significant fiscal effect on the private sector.
Small Business Impact
This proposed rule does not have a significant effect on small business.
Fiscal Estimate
The fiscal effect of the assessment under s.
146.98, Stats., was included in the fiscal effect of
2009 Wis. Act 28. Therefore, this rule has no fiscal effect.
State fiscal effect
None.
Local government fiscal effect
None.
Text of Emergency and Proposed Permanent Rule
SECTION 1. Tax 1.17 is created to read:
Tax 1.17 Ambulatory surgical center assessment. (1) PURPOSE. The purpose of this section is to establish procedures and other requirements necessary for levying and collecting the ambulatory surgical center assessment imposed under s.
146.98, Stats.
(2) DEFINITIONS. In this section:
(a) “Ambulatory surgical center" or “ASC" has the meaning given in s.
146.98 (1), Stats.
(b) “Cash basis" is the method of accounting where income is reported in the year that it is actually or constructively received in the form of cash or its equivalent or other property.
(c) “Department" means the department of revenue.
(d) “Gross patient revenue" means the gross amount received on a cash basis by the ambulatory surgical center from all patient services.
(e) “Patient services" include any of the following goods and services provided to a patient or consumer:
1. Bed and board.
2. Nursing services and other related services.
3. Use of the ambulatory surgical center.
4. Medical social services.
5. Drugs, biologicals, supplies, appliances and equipment.
