Senate Bill No. 280
(By Senator Blatnik)
[Introduced February 7, 1995; referred to the Committee
on Health and Human Resources; and then to the Committee
A BILL to amend and reenact section sixteen, article
twenty-seven, chapter eleven of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, relating
to taxation; health care provider taxes; and changing the
application of the taxes from gross receipts to the net
profits of physicians' services.
Be it enacted by the Legislature of West Virginia:
That section sixteen, article twenty-seven, chapter eleven
of the code of West Virginia, one thousand nine hundred
thirty-one, as amended, be amended and reenacted to read as
ARTICLE 27. HEALTH CARE PROVIDER TAXES.
§11-27-16. Imposition of tax on providers of physicians'
(a) Imposition of tax. -- For the privilege of engaging or
continuing within this state in the business of providing
physicians' services, there is hereby levied and shall be
collected from every person rendering such service an annual
broad-based health care related tax.
(b) Rate and measure of tax. -- The tax imposed in
subsection (a) of this section shall be two percent of the gross
receipts derived by the taxpayer from furnishing physicians'
services in this state: Provided, That upon the effective date
of the amendment to this section, the tax imposed in subsection
(a) of this section shall be two percent of the net profits
derived by the taxpayer from furnishing physicians' services in
this state, subject to the prior approval or satisfaction of the
United States secretary of health and human services that this
tax is imposed uniformly. To that end, upon the enactment of the
amendment to this section, the secretary of the department of tax
and revenue, shall immediately seek such approval or
(c) Definitions. --
(1) "Gross receipts" means the amount received or
receivable, whether in cash or in kind, from patients,
third-party payors and others for physicians' services furnished by the provider, including retroactive adjustments under
reimbursement agreements with third-party payors, without any
deduction for any expenses of any kind: Provided, That accrual
basis providers shall be allowed to reduce gross receipts by
their contractual allowances, to the extent such allowances are
included therein, and by bad debts, to the extent the amount of
such bad debts was previously included in gross receipts upon
which the tax imposed by this section was paid.
(2) "Contractual allowances" means the difference between
revenue (gross receipts) at established rates and amounts
realizable from third-party payors under contractual agreements.
(3) "Net profits" means gross receipts from furnishing
physicians' services minus all expenses, whether direct or
indirect, related to the furnishing of physicians' services.
(3) (4) "Physicians' services" means those services that are
physicians' services for purposes of Section 1903(w) of the
Social Security Act.
(d) Effective date. -- The tax imposed by this section shall
apply to gross receipts received or receivable by providers after
the thirty-first day of May, one thousand nine hundred
ninety-three. The tax imposed by the amendment to this section
shall apply to net profits received or receivable by providers after the thirty-first day of May, one thousand nine hundred
NOTE: Subject to the approval of the United States
Secretary of Health and Human Services, the purpose of this bill
is to change the tax on physicians' services from applying to
gross receipts to applying to net profits.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.