CHAPTER 211a
HOSPITALS TAX

Table of Contents

Sec. 12-263a. Definitions.
Sec. 12-263b. Tax on net patient revenue. Rate. Exemption. Return.
Sec. 12-263c. Failure to pay tax when due. Penalty. Waiver. Withholding of amounts payable by Department of Social Services.
Sec. 12-263d. Examination of records. Penalties related to deficiency assessments. Delegation of authority to Commissioner of Social Services.

      Sec. 12-263a. Definitions. As used in sections 12-263a to 12-263e, inclusive:

      (1) "Hospital" means any health care facility or institution, as defined in section 19a-630, which is licensed as a short-term general hospital by the Department of Public Health but does not include (A) any hospital which, on October 1, 1997, is within the class of hospitals licensed by the department as children's general hospitals, or (B) a short-term acute hospital operated exclusively by the state other than a short-term acute hospital operated by the state as a receiver pursuant to chapter 920;

      (2) "Net patient revenue" means the amount of accrued payments earned by a hospital for the provision of inpatient and outpatient services;

      (3) "Commissioner" means the Commissioner of Revenue Services;

      (4) "Department" means the Department of Revenue Services.

      (P.A. 94-9, S. 21, 41; P.A. 95-257, S. 12, 21, 39, 58; P.A. 97-2, S. 2, 8; P.A. 99-173, S. 31, 65; P.A. 00-174, S. 68, 83; P.A. 10-179, S. 95; P.A. 11-6, S. 145; 11-44, S. 102.)

      History: P.A. 94-9 effective April 1, 1994; P.A. 95-257 replaced Commissioner and Department of Public Health and Addiction Services with Commissioner and Department of Public Health and replaced Commission on Hospitals and Health Care with Office of Health Care Access, effective July 1, 1995; P.A. 97-2 amended definition of hospital in Subdiv. (1) to exclude children's general hospitals, effective the later of October 1, 1997, or upon the date of federal approval or federal determination that no approval is required pursuant to Sec. 19a-670a (actual effective date was October 1, 1997); P.A. 99-173 amended Subdiv. (1) to exclude short-term acute care hospitals run by the state, effective June 23, 1999, and applicable to calendar quarters commencing on or after July 1, 1999; P.A. 00-174 added Subdiv. (8) defining "patient care services", effective May 26, 2000, and applicable to all tax periods open on said date; P.A. 10-179 amended Subdivs. (4) and (5) by replacing "Office of Health Care Access" with "Office of Health Care Access division of the Department of Public Health"; P.A. 11-6 deleted former Subdivs. (2) to (8) and added definitions of "net patient revenue", "commissioner" and "department" in new Subdivs. (2) to (4), respectively, effective July 1, 2011, and applicable to calendar quarters commencing on or after that date; P.A. 11-44 amended Subdiv. (2) by redefining "net patient revenue", effective July 1, 2011, and applicable to calendar quarters commencing on or after that date.

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      Sec. 12-263b. Tax on net patient revenue. Rate. Exemption. Return. (a) For each calendar quarter commencing on or after July 1, 2011, there is hereby imposed a tax on the net patient revenue of each hospital in this state to be paid each calendar quarter. The rate of such tax shall be up to the maximum rate allowed under federal law. The Commissioner of Social Services shall determine the base year on which such tax shall be assessed. The Commissioner of Social Services may, in consultation with the Secretary of the Office of Policy and Management and in accordance with federal law, exempt a hospital from the tax on payment earned for the provision of outpatient services based on financial hardship.

      (b) Each hospital shall, on or before the last day of January, April, July and October of each year, render to the Commissioner of Revenue Services a return, on forms prescribed or furnished by the Commissioner of Revenue Services and signed by one of its principal officers, stating specifically the name and location of such hospital, and the amount of its net patient revenue as determined by the Commissioner of Social Services. Payment shall be made with such return. Each hospital shall file such return electronically with the department and make such payment by electronic funds transfer in the manner provided by chapter 228g, irrespective of whether the hospital would otherwise have been required to file such return electronically or to make such payment by electronic funds transfer under the provisions of chapter 228g.

      (P.A. 94-9, S. 22, 41; P.A. 96-144, S. 2, 5; P.A. 98-244, S. 12, 35; P.A. 99-173, S. 32, 65; P.A. 00-170, S. 9, 42; P.A. 11-6, S. 146; 11-44, S. 103; 11-61, S. 79.)

      History: P.A. 94-9 effective April 1, 1994; P.A. 96-144 reduced tax from 11% to 9.25% on October 1, 1996, to 8.25% on October 1, 1997, to 7.25% on October 1, 1998, and to 6.25% on and after October 1, 1999, effective May 29, 1996; P.A. 98-244 eliminated notarization requirement, effective June 8, 1998, and applicable to calendar quarters commencing on or after October 1, 1998; P.A. 99-173 reduced rate from 6.25% to 4.5% in Subdiv. (5), effective June 23, 1999, and applicable to calendar quarters commencing on or after October 1, 1999; P.A. 00-170 discontinued to the tax for calendar quarters commencing on or after April 1, 2000, effective May 26, 2000; P.A. 11-6 deleted provisions imposing tax on gross earnings and suspending said tax after April 1, 2000, added Subsec. (a) re tax on net patient revenue, designated existing provisions re timing and form of return as Subsec. (b), changed language therein re gross earnings to language re net patient revenue and added requirement re electronic filing and payment, effective July 1, 2011, and applicable to calendar quarters commencing on or after that date; P.A. 11-44 amended Subsec. (a) by replacing tax rate of 4.06% with provision requiring rate to be up to maximum allowed under federal law and adding provisions re base year and exemption from tax, effective July 1, 2011, and applicable to calendar quarters commencing on or after that date; P.A. 11-61 amended Subsec. (b) by changing "for the calendar quarter ending the last day of the preceding month" to "as determined by the Commissioner of Social Services" re statement of amount of net patient revenue on return, effective July 1, 2011, and applicable to calendar quarters commencing on or after that date.

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      Sec. 12-263c. Failure to pay tax when due. Penalty. Waiver. Withholding of amounts payable by Department of Social Services. (a) If any hospital fails to pay the amount of tax reported to be due on its return within the time specified under the provisions of section 12-263b, there shall be imposed a penalty equal to ten per cent of such amount due and unpaid, or fifty dollars, whichever is greater. The tax shall bear interest at the rate of one per cent per month or fraction thereof, from the due date of such tax until the date of payment.

      (b) If any hospital has not made its return within one month after the time specified in section 12-263b, the Commissioner of Revenue Services may make such return at any time thereafter, according to the best information obtainable and according to the form prescribed. To the tax imposed upon the basis of such return, there shall be added an amount equal to ten per cent of such tax, or fifty dollars, whichever is greater. The tax shall bear interest at the rate of one per cent per month or fraction thereof, from the due date of such tax until the date of payment.

      (c) Subject to the provisions of section 12-3a, the commissioner may waive all or part of the penalties provided under this section when it is proven to his satisfaction that the failure to pay any tax on time was due to reasonable cause and was not intentional or due to neglect.

      (d) The commissioner shall notify the Commissioner of Social Services of any amount delinquent under sections 12-263a to 12-263e, inclusive, and, upon receipt of such notice, the Commissioner of Social Services shall deduct and withhold such amount from amounts otherwise payable by the Department of Social Services to the delinquent hospital.

      (P.A. 94-9, S. 23, 41; P.A. 95-359, S. 11, 19; P.A. 11-6, S. 147.)

      History: P.A. 94-9 effective April 1, 1994; P.A. 95-359 amended Subsecs. (a) and (b) to change interest rate from 1.66% to 1%, effective July 1, 1995, and applicable to taxes due and owing on or after that date; P.A. 11-6 added Subsec. (d) re notice to Commissioner of Social Services of delinquent amounts, effective July 1, 2011, and applicable to calendar quarters commencing on or after that date.

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      Sec. 12-263d. Examination of records. Penalties related to deficiency assessments. Delegation of authority to Commissioner of Social Services. (a) The Commissioner of Revenue Services may examine the records of any hospital subject to a tax imposed under the provisions of sections 12-263a to 12-263e, inclusive, as he may deem necessary. If he shall determine therefrom that there is a deficiency with respect to the payment of any such tax due under the provisions of said sections 12-263a to 12-263e, inclusive, he shall assess the deficiency in tax, give notice of such deficiency assessment to the hospital and make demand thereupon for payment. Such amount shall bear interest at the rate of one per cent per month or fraction thereof from the date when the original tax was due and payable. When it appears that any part of the deficiency for which a deficiency assessment is made is due to negligence or intentional disregard of the provisions of said sections 12-263a to 12-263e, inclusive, or regulations adopted thereunder, there shall be imposed a penalty equal to ten per cent of the amount of such deficiency assessment, or fifty dollars, whichever is greater. When it appears that any part of the deficiency for which a deficiency assessment is made is due to fraud or intent to evade the provisions of sections 12-263a to 12-263e, inclusive, or regulations adopted thereunder, there shall be imposed a penalty equal to twenty-five per cent of the amount of such deficiency assessment. No hospital shall be subject to more than one penalty under this subsection in relation to the same tax period. Within thirty days of the mailing of such notice, the hospital shall pay to the commissioner, in cash, or by check, draft or money order drawn to the order of the Commissioner of Revenue Services, any additional amount of tax, penalty and interest shown to be due.

      (b) Except in the case of a wilfully false or fraudulent return with intent to evade the tax, no assessment of additional tax shall be made after the expiration of more than three years from the date of the filing of a return or from the original due date of a return, whichever is later. If no return has been filed as provided under the provisions of section 12-263b, the commissioner may make such return at any time thereafter, according to the best information obtainable and according to the form prescribed. Where, before the expiration of the period prescribed herein for the assessment of an additional tax, a hospital has consented in writing that such period may be extended, the amount of such additional tax due may be determined at any time within such extended period. The period so extended may be further extended by subsequent consents in writing before the expiration of the extended period.

      (c) The commissioner may enter into an agreement with the Commissioner of Social Services delegating to the Commissioner of Social Services the authority to examine the records and returns of any hospital subject to the tax imposed under section 12-263b and to determine whether such tax has been underpaid or overpaid. If such authority is so delegated, examinations of such records and returns by the Commissioner of Social Services and determinations by the Commissioner of Social Services that such tax has been underpaid or overpaid shall have the same effect as similar examinations or determinations made by the Commissioner of Revenue Services.

      (P.A. 94-9, S. 24, 41; P.A. 95-359, S. 12, 19; P.A. 11-6, S. 148.)

      History: P.A. 94-9 effective April 1, 1994; P.A. 95-359 amended Subsec. (a) to reduce interest rate from 1.66 to 1%, effective July 1, 1995, and applicable to taxes due and owing on or after that date; P.A. 11-6 added Subsec. (c) re delegation of authority to Commissioner of Social Services, effective July 1, 2011, and applicable to calendar quarters commencing on or after that date.

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