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.
6. Other diagnostic or therapeutic items or services.
7. Medical or surgical services.
8. Laboratory services.
9. Items and services furnished to ambulatory patients not requiring emergency care.
10. Emergency services including ambulance services.
(3) REGISTRATION. (a) Ambulatory surgical centers in this state are required to be registered with the department, in the manner prescribed by the department.
(b) On or before January 1, ambulatory surgical centers in this state shall notify the department of a change in ownership, address change, and any other information pertinent to the ambulatory surgical center's assessment under s.
146.98
, Stats., occurring in the previous calendar year.
(c) The department shall update ambulatory surgical center registration using information provided by the department of health services, division of quality assurance.
(4) ANNUAL GROSS PATIENT REVENUE SURVEY. (a) The department shall annually survey ambulatory surgical centers required to be registered under sub. (3) (a) to obtain any data required by the department needed to determine the amount of the assessment imposed in s.
146.98
, Stats. Survey data filed shall be subject to the confidentiality provisions under s.
71.78
, Stats.
(b) Ambulatory surgical centers required to be registered shall electronically file the survey annually on or before March 15.
(c) Ambulatory surgical centers may apply for a 5 day extension of the survey due date. An extension will be granted for good cause only. The application for an extension shall be filed electronically with the department on or before March 15 at
https://tap.revenue.wi.gov
.
(d) Failure to electronically file the survey with the department by the due date, including any extension, shall result in a late filing penalty of $500 per day calculated from the day after the unextended due date up to the date the completed survey is received by the department, or April 1, whichever is earlier. Failure to file the survey during the period for the extension shall make the extension null and void.
Examples: 1) An ambulatory surgical center does not request an extension to file the annual survey and fails to file the survey by April 1, 2010. A daily $500 late filing penalty is assessed for the period of March 16, 2010 through April 1, 2010, for a total late filing penalty of $8,500.
2) An ambulatory surgical center is granted an extension, and files the annual survey on March 19, 2010. No late filing penalty is assessed.
3) An ambulatory surgical center is granted an extension to file the annual survey, but files the survey on March 24, 2010, after the expiration of the 5 day extension. A $4,000 late filing penalty is assessed for the period of March 16, 2010 through March 23, 2010.
(e) The deadline for filing an amended survey is April 1. Information received after April 1 shall not be considered in the determination of the assessment. If any ambulatory surgical center fails, within the time required by this chapter, to file the survey, or files an incomplete or incorrect survey, the department shall make an assessment based upon any other information in the department's possession and according to its best judgment.
(f) The department may impose a penalty of 25% of the amount of the assessment if the ambulatory surgical center fails to file the survey by April 1, pursuant to s.
146.98 (3) (e)
, Stats.
(5) ASSESSMENT. (a) The assessment shall be calculated using a uniform percentage that satisfies the requirements under
42 CFR 433.68
for collecting an assessment without incurring a reduction in federal financial participation under the federal Medicaid program.
(b) The department shall electronically notify an ambulatory surgical center of the amount of the assessment on April 15.
(c) The assessment shall be paid electronically on or before June 1 in a manner prescribed by the department. Failure to pay the assessment by June 1 shall result in a penalty of $500 per day calculated from the day after the due date up to the date the assessment is received by the department, subject to a maximum penalty equal to the amount of the assessment. Payment of the penalty under this subdivision does not relieve the ambulatory surgical center from the responsibility of paying the assessment.
(d) The department may require estimated pre-payment of the assessment, in a manner prescribed by the department. The department shall notify ambulatory surgical centers at least 90 days before the first estimated payment is due.
(6) AUDIT. (a) The department may conduct an office or field audit to determine the assessment under s.
146.98
, Stats., or to ascertain the correctness of the information reported on the annual survey required to be filed under sub. (4) (b).
(b) Ambulatory surgical centers shall retain financial books and records that support the information reported on the annual survey, and provide it to the department pursuant to s.
146.98 (3)
( c), Stats.
(c) The department may impose a penalty equal to the amount of any unreported gross patient revenue multiplied by the percentage established for that period in sub. (5) (a).
(7) APPEALS. Ambulatory surgical centers claiming to be adversely affected by the department's action or inaction, other than a rulemaking action or proposal for legislation, may petition the department for a contested case hearing under s.
227.42
, Stats. The request for hearing shall be in writing and served upon the Secretary of Revenue within 30 days after the department's action or inaction complained of.
Note: Written requests for hearing should be addressed to: Wisconsin Department of Revenue, Office of the Secretary, P.O. Box 8933, Madison, WI 53708.
(8) COLLECTIONS. (a) Assessments under sub. (5) (c) shall become delinquent if not paid when due, unless the department receives a request for hearing under sub. (7).
(b) The department may immediately proceed to collect delinquent assessments, including any penalties, in a manner comparable to that described in s.
77.62
, Stats.
(c) Assessments unpaid for more than 90 days after appeal rights have expired shall be posted on the list on the Internet site maintained by the department under s.
73.03 (62)
, Stats.
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
