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General Assembly Raised Bill No. 1107
January Session, 2021
LCO No. 6734
Referred to Committee on FINANCE, REVENUE AND
BONDING
Introduced by:
(FIN)
AN ACT CONCERNING TH E TAXATION OF AMBULATORY
SURGICAL CENTER SERV ICES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 12-263i of the general statutes is repealed and the 1
following is substituted in lieu thereof (Effective June 1, 2021, and 2
applicable to calendar quarters commencing on or after July 1, 2020): 3
(a) As used in this section: 4
(1) "Ambulatory surgical center" means an entity included within the 5
definition of said term that is set forth in 42 CFR 416.2 and that is 6
licensed by the Department of Public Health as an outpatient surgical 7
facility, and any other ambulatory surgical center that is Medicare 8
certified; 9
(2) "Commissioner" means the Commissioner of Revenue Services; 10
and 11
(3) "Department" means the Department of Revenue Services. 12 Raised Bill No. 1107
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(b) (1) For each calendar quarter commencing on or after October 1, 13
2015, but prior to July 1, 2021, there is hereby imposed a tax on each 14
ambulatory surgical center in this state to be paid each calendar quarter. 15
The tax imposed by this section shall be at the rate of six per cent of the 16
gross receipts of each ambulatory surgical center, except that: 17
(A) Prior to July 1, 2019, such tax shall not be imposed on any amount 18
of such gross receipts that constitutes either (i) the first million dollars 19
of gross receipts of the ambulatory surgical center in the applicable fiscal 20
year, or (ii) net revenue of a hospital that is subject to the tax imposed 21
under section 12-263q; [and] 22
(B) On and after July 1, 2019, but prior to July 1, 2021, such tax shall 23
not be imposed on any amount of such gross receipts that constitutes 24
any of the following: (i) The first million dollars of gross receipts of the 25
ambulatory surgical center in the applicable fiscal year, excluding 26
Medicaid and Medicare payments, (ii) net revenue of a hospital that is 27
subject to the tax imposed under section 12-263q, (iii) Medicaid 28
payments received by the ambulatory surgical center, and (iv) Medicare 29
payments received by the ambulatory surgical center; and 30
(C) For the calendar quarters commencing on or after July 1, 2020, but 31
prior to July 1, 2021, COVID-19 expenses may be deducted from the 32
gross receipts of the ambulatory surgical center prior to the imposition 33
of such tax. As used in this subparagraph, (i) "COVID-19 expenses" 34
means all amounts incurred by or on behalf of an ambulatory surgical 35
center directly or indirectly as a result of COVID-19, including, but not 36
limited to, amounts for the purchase, lease, licensing or use of tangible 37
or intangible property in connection with tests for, protection or 38
prevention against or treatment of COVID-19 or its symptoms, for the 39
ambulatory surgical center's personnel, patients, service providers, 40
visitors, facilities or tangible personal property, and (ii) "COVID-19" 41
means the respiratory disease designated by the World Health 42
Organization on February 11, 2020, as coronavirus 2019, and any related 43
mutation thereof recognized by said organization as a communicable 44
respiratory disease. 45 Raised Bill No. 1107
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(2) Nothing in this section shall prohibit an ambulatory surgical 46
center from seeking remuneration for the tax imposed by this section. 47
(3) Each ambulatory surgical center shall, on or before January 31, 48
2016, and thereafter on or before the last day of January, April, July and 49
October of each year until and including July 31, 2021, render to the 50
commissioner a return, on forms prescribed or furnished by the 51
commissioner, reporting the name and location of such ambulatory 52
surgical center, the entire amount of gross receipts generated by such 53
ambulatory surgical center during the calendar quarter ending on the 54
last day of the preceding month and such other information as the 55
commissioner deems necessary for the proper administration of this 56
section. The tax imposed under this section shall be due and payable on 57
the due date of such return. Each ambulatory surgical center shall be 58
required to file such return electronically with the department and to 59
make payment of such tax by electronic funds transfer in the manner 60
provided by chapter 228g, regardless of whether such ambulatory 61
surgical center would have otherwise been required to file such return 62
electronically or to make such tax payment by electronic funds transfer 63
under the provisions of chapter 228g. 64
(c) Whenever the tax imposed under this section is not paid when 65
due, a penalty of ten per cent of the amount due and unpaid or fifty 66
dollars, whichever is greater, shall be imposed and interest at the rate of 67
one per cent per month or fraction thereof shall accrue on such tax from 68
the due date of such tax until the date of payment. 69
(d) The provisions of sections 12-548, 12-550 to 12-554, inclusive, and 70
12-555a shall apply to the provisions of this section in the same manner 71
and with the same force and effect as if the language of said sections had 72
been incorporated in full into this section and had expressly referred to 73
the tax imposed under this section, except to the extent that any 74
provision is inconsistent with a provision in this section. 75
(e) For the fiscal [year] years ending June 30, 2016, [and each fiscal 76
year thereafter] to June 30, 2021, inclusive, the Comptroller is authorized 77 Raised Bill No. 1107
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to record as revenue for each fiscal year the amount of tax imposed 78
under the provisions of this section prior to the end of each fiscal year 79
and which tax is received by the Commissioner of Revenue Services not 80
later than five business days after the last day of July immediately 81
following the end of each fiscal year. 82
Sec. 2. Subdivision (2) of subsection (a) of section 12-407 of the general 83
statutes is repealed and the following is substituted in lieu thereof 84
(Effective July 1, 2021, and applicable to sales occurring on or after July 1, 85
2021): 86
(2) "Sale" and "selling" mean and include: 87
(A) Any transfer of title, exchange or barter, conditional or otherwise, 88
in any manner or by any means whatsoever, of tangible personal 89
property for a consideration; 90
(B) Any withdrawal, except a withdrawal pursuant to a transaction 91
in foreign or interstate commerce, of tangible personal property from 92
the place where it is located for delivery to a point in this state for the 93
purpose of the transfer of title, exchange or barter, conditional or 94
otherwise, in any manner or by any means whatsoever, of the property 95
for a consideration; 96
(C) The producing, fabricating, processing, printing or imprinting of 97
tangible personal property for a consideration for consumers who 98
furnish either directly or indirectly the materials used in the producing, 99
fabricating, processing, printing or imprinting, including, but not 100
limited to, sign construction, photofinishing, duplicating and 101
photocopying; 102
(D) The furnishing and distributing of tangible personal property for 103
a consideration by social clubs and fraternal organizations to their 104
members or others; 105
(E) The furnishing, preparing, or serving for a consideration of food, 106
meals or drinks; 107 Raised Bill No. 1107
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(F) A transaction whereby the possession of property is transferred 108
but the seller retains the title as security for the payment of the price; 109
(G) A transfer for a consideration of the title of tangible personal 110
property which has been produced, fabricated or printed to the special 111
order of the customer, or of any publication, including, but not limited 112
to, sign construction, photofinishing, duplicating and photocopying; 113
(H) A transfer for a consideration of the occupancy of any room or 114
rooms in a hotel, lodging house or bed and breakfast establishment for 115
a period of thirty consecutive calendar days or less; 116
(I) The rendering of certain services, as defined in subdivision (37) of 117
this subsection, for a consideration, exclusive of such services rendered 118
by an employee for the employer; 119
(J) The leasing or rental of tangible personal property of any kind 120
whatsoever, including, but not limited to, motor vehicles, linen or 121
towels, machinery or apparatus, office equipment and data processing 122
equipment, provided for purposes of this subdivision and the 123
application of sales and use tax to contracts of lease or rental of tangible 124
personal property, the leasing or rental of any motion picture film by 125
the owner or operator of a motion picture theater for purposes of display 126
at such theater shall not constitute a sale within the meaning of this 127
subsection; 128
(K) The rendering of telecommunications service, as defined in 129
subdivision (26) of this subsection, for a consideration on or after 130
January 1, 1990, exclusive of any such service rendered by an employee 131
for the employer of such employee, subject to the provisions related to 132
telecommunications service in accordance with section 12-407a; 133
(L) (i) The rendering of community antenna television service, as 134
defined in subdivision (27) of this subsection, for a consideration on or 135
after January 1, 1990, exclusive of any such service rendered by an 136
employee for the employer of such employee. For purposes of this 137
chapter, "community antenna television service" includes service 138 Raised Bill No. 1107
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provided by a holder of a certificate of cable franchise authority 139
pursuant to section 16-331p, and service provided by a community 140
antenna television company issued a certificate of video franchise 141
authority pursuant to section 16-331e for any service area in which it 142
was not certified to provide community antenna television service 143
pursuant to section 16-331 on or before October 1, 2007; 144
(ii) The rendering of certified competitive video service, as defined in 145
subdivision (38) of this subsection, for consideration on or after October 146
1, 2007, exclusive of any such service rendered by an employee for the 147
employer of such employee; 148
(M) The transfer for consideration of space or the right to use any 149
space for the purpose of storage or mooring of any noncommercial 150
vessel, exclusive of dry or wet storage or mooring of such vessel during 151
the period commencing on the first day of October in any year to and 152
including the thirty-first day of May of the next succeeding year; 153
(N) The sale for consideration of naming rights to any place of 154
amusement, entertainment or recreation within the meaning of 155
subdivision (3) of section 12-540; 156
(O) The transfer for consideration of a prepaid telephone calling 157
service, as defined in subdivision (34) of this subsection, and the 158
recharge of a prepaid telephone calling service, provided, if the sale or 159
recharge of a prepaid telephone calling service does not take place at the 160
retailer's place of business and an item is shipped by the retailer to the 161
customer, the sale or recharge shall be deemed to take place at the 162
customer's shipping address, but, if such sale or recharge does not take 163
place at the retailer's place of business and no item is shipped by the 164
retailer to the customer, the sale or recharge shall be deemed to take 165
place at the customer's billing address or the location associated with 166
the customer's mobile telephone number; [and] 167
(P) The furnishing by any person, for a consideration, of space for 168
storage of tangible personal property when such person is engaged in 169 Raised Bill No. 1107
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the business of furnishing such space, but "sale" and "selling" do not 170
mean or include the furnishing of space which is used by a person for 171
residential purposes. As used in this subparagraph, "space for storage" 172
means secure areas, such as rooms, units, compartments or containers, 173
whether accessible from outside or from within a building, that are 174
designated for the use of a customer, where the customer can store and 175
retrieve property, including self-storage units, mini-storage units and 176
areas by any other name to which the customer has either unlimited free 177
access or free access within reasonable business hours or upon 178
reasonable notice to the service provider to add or remove property, but 179
does not mean the rental of an entire building, such as a warehouse. For 180
purposes of this subparagraph, furnishing space for storage shall not 181
include general warehousing and storage, where the warehouse 182
typically handles, stores and retrieves a customer's property using the 183
warehouse's staff and equipment and does not allow the customer free 184
access to the storage space and shall not include accepting specific items 185
of property for storage, such as clothing at a dry cleaning establishment 186
or golf bags at a golf club; [.] and 187
(Q) The rendering of an ambulatory surgical center service, as 188
defined in subdivision (45) of this subsection, by an ambulatory surgical 189
center, as defined in subdivision (44) of this subsection, for a 190
consideration, exclusive of such service rendered by an employee for the 191
employer of such employee, subject to the provisions related to 192
ambulatory surgical center services in accordance with this section and 193
section 12-408, as amended by this act. 194
Sec. 3. Subsection (a) of section 12-407 of the general statutes is 195
amended by adding subdivisions (44) and (45) as follows (Effective July 196
1, 2021, and applicable to sales occurring on or after July 1, 2021): 197
(NEW) (44) "Ambulatory surgical center" means any distinct entity 198
that (A) operates exclusively for the purpose of providing surgical 199
services to patients not requiring hospitalization and in which the 200
expected duration of services would not exceed twenty-four hours 201
following an admission, (B) has an agreement with the Centers for 202 Raised Bill No. 1107
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Medicare and Medicaid Services to participate in Medicare as an 203
ambulatory surgical center, and (C) meets the general and specific 204
conditions for participation in Medicare set forth in 42 CFR Part 416, 205
Subparts B and C, as amended from time to time. 206
(NEW) (45) (A) "Ambulatory surgical center service" means only 207
those procedures or services included in a facility fee payment to an 208
ambulatory surgical center facility associated with each surgical 209
procedure and that are not reimbursable ancillary or professional 210
procedures or services. "Ambulatory surgical center service" includes 211
facility services only and does not include surgical procedures, 212
physicians' services, anesthetists' services, radiology services, 213
diagnostic services or ambulance services, if such procedures or services 214
would be reimbursed as a separate line item from the facility fee 215
payment to an ambulatory surgical center facility. 216
(B) For the purposes of the tax imposed under this chapter, "gross 217
receipts" means the amounts received, in cash or in kind, from patients, 218
third-party payers and others, including retroactive adjustments under 219
reimbursement agreements with third-party payers, for the rendering 220
of ambulatory surgical center services by an ambulatory surgical center. 221
"Gross receipts" does not include (i) amounts received by an ambulatory 222
surgical center that were or are subject to the tax imposed under section 223
12-263i of the general statutes, as amended by this act, (ii) the first one 224
million five hundred thousand dollars of gross receipts received during 225
each twelve-month period commencing July first, excluding Medicaid 226
and Medicare payments, by an ambulatory surgical center for the 227
provision of ambulatory surgical center services, (iii) Medicaid or 228
Medicare payments received by the ambulatory surgical center for the 229
provision of ambulatory surgical center services, (iv) payer discounts, 230
charity care and bad debts, or (v) amounts received by an ambulatory 231
surgical center for tangible personal property used in connection with 232
the rendering of an ambulatory surgical center service, including 233
implants, devices, drugs and biologicals, regardless of the identity of the 234
payer for such ambulatory surgical center. 235 Raised Bill No. 1107
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(C) As used in this subdivision: (i) "Medicaid" means the program 236
operated by the Department of Social Services pursuant to section 17b-237
260 and authorized by Title XIX of the Social Security Act, as amended 238
from time to time; (ii) "Medicare" means the program operated by the 239
Centers for Medicare and Medicaid Services in accordance with Title 240
XVIII of the Social Security Act, as amended from time to time, 241
including, but not limited to, programs established pursuant to Parts A, 242
B and C of Title XVIII of the Social Security Act, as amended from time 243
to time; (iii) "payer discount" means the difference between an 244
ambulatory surgical center's published charges and payments received 245
by such center from one or more third-party payers for a method of 246
payment that is different than or a rate that is reduced from the 247
published charges. "Payer discount" does not include charity care or bad 248
debts; and (iv) "charity care" means free or discounted health care 249
services rendered by an ambulatory surgical center to an individual 250
who cannot afford to pay for such services and includes, but is not 251
limited to, health care services provided to an uninsured patient who is 252
not expected to pay all or part of an ambulatory surgical center's bill 253
based on income guidelines and other financial criteria set forth in the 254
general statutes or in an ambulatory surgical center's charity care 255
policies on file at the office of such center. "Charity care" does not 256
include bad debts or payer discounts. 257
Sec. 4. Subparagraph (J) of subdivision (1) of section 12-408 of the 258
general statutes is repealed and the following is substituted in lieu 259
thereof (Effective July 1, 2021, and applicable to sales occurring on or after 260
July 1, 2021): 261
(J) (i) The rate of tax imposed by this chapter shall be applicable to all 262
retail sales upon the effective date of such rate, except that a new rate 263
that represents an increase in the rate applicable to the sale shall not 264
apply to any sales transaction wherein a binding sales contract without 265
an escalator clause has been entered into prior to the effective date of the 266
new rate and delivery is made within ninety days after the effective date 267
of the new rate. 268 Raised Bill No. 1107
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(ii) For the purposes of payment of the tax imposed under this 269
section, any retailer of services (I) taxable under subdivision (37) of 270
subsection (a) of section 12-407, who computes taxable income, for 271
purposes of taxation under the Internal Revenue Code of 1986, or any 272
subsequent corresponding internal revenue code of the United States, 273
as amended from time to time, on an accounting basis that recognizes 274
only cash or other valuable consideration actually received as income 275
and who is liable for such tax only due to the rendering of such services, 276
and (II) taxable under subparagraph (Q) of subdivision (2) of subsection 277
(a) of section 12-407, as amended this act, may make payments related 278
to such tax for the period during which such income is or gross receipts 279
are received, without penalty or interest, without regard to when such 280
service is rendered; 281
Sec. 5. (NEW) (Effective July 1, 2021, and applicable to sales occurring on 282
or after July 1, 2021) (a) As used in this section: 283
(1) "Ambulatory surgical center" has the same meaning as provided 284
in subsection (a) of section 12-407 of the general statutes, as amended by 285
this act; 286
(2) "Ambulatory surgical center service" has the same meaning as 287
provided in subsection (a) of section 12-407 of the general statutes, as 288
amended by this act; 289
(3) "Medicaid" has the same meaning as provided in subdivision (45) 290
of subsection (a) of section 12-407, as amended by this act; 291
(4) "Medicaid investment" means an amount equal to the greater of 292
(A) fifty per cent of the aggregate amount of Medicaid payments 293
received during the applicable reporting period by an ambulatory 294
surgical center for the provision of ambulatory surgical center services, 295
or (B) fifty per cent of the aggregate amount of Medicaid payments that 296
would have been due and owing had services similar to the ambulatory 297
surgical center services provided by the ambulatory surgical center 298
during the applicable reporting period been performed by and at a 299 Raised Bill No. 1107
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hospital instead; and 300
(5) "State health plan investment" means an amount equal to twenty-301
five per cent of the aggregate payments received from or on behalf of 302
each individual who is covered under a health plan pursuant to section 303
5-259 of the general statutes, during the applicable reporting period by 304
an ambulatory surgical center for the provision of ambulatory surgical 305
center services. 306
(b) Each ambulatory surgical center shall be allowed, for each 307
reporting period, a credit against the tax imposed under chapter 219 of 308
the general statutes in the amount of the Medicaid investment plus the 309
state health plan investment. If the amount of the credit allowed 310
pursuant to this subsection exceeds the ambulatory surgical center's tax 311
liability for the tax imposed under chapter 219 of the general statutes for 312
the reporting period, the ambulatory surgical center shall file a claim for 313
refund, in such form and manner as prescribed by the Commissioner of 314
Revenue Services. Upon verification of the claim, the commissioner 315
shall treat such excess as an overpayment and shall refund the amount 316
of such excess to the ambulatory surgical center. There shall be added 317
to the amount of such refund interest at the rate of two-thirds of one per 318
cent for each month or fraction thereof that elapses between the 319
ninetieth day following receipt of such claim for refund by the 320
commissioner and the date of notice by the commissioner that such 321
refund is due. An ambulatory surgical center that claims a credit or 322
receives a refund under this subsection is entitled to retain such credit 323
or refund for its own account and is not required to refund or pay the 324
amount of such credit or refund to any user of or payer for ambulatory 325
surgical center services. 326
This act shall take effect as follows and shall amend the following
sections:
Section 1 June 1, 2021, and
applicable to calendar
quarters commencing on or
after July 1, 2020
12-263i Raised Bill No. 1107
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Sec. 2 July 1, 2021, and
applicable to sales
occurring on or after July
1, 2021
12-407(a)(2)
Sec. 3 July 1, 2021, and
applicable to sales
occurring on or after July
1, 2021
12-407(a)
Sec. 4 July 1, 2021, and
applicable to sales
occurring on or after July
1, 2021
12-408(1)(J)
Sec. 5 July 1, 2021, and
applicable to sales
occurring on or after July
1, 2021
New section
FIN Joint Favorable