Plan to cost hospital millions
By Steve Herring
Published in News on May 12, 2015 1:46 PM
A state Senate bill limiting state and local sales tax refunds to nonprofit hospitals could cost Wayne Memorial Hospital $2 million a year, hospital officials said today.
Senate Bill 700 limiting sales tax refunds for nonprofit hospitals was filed March 26. It passed its first reading and was sent to the Committee on Rules and Operations of the Senate.
Hospital board member and finance committee chairman Jack Best this morning told the hospital board that the bill is similar to one that years ago eliminated sales tax refunds to county public school systems.
"The schools actually had to start buying stuff through the county to get the sales tax," Best said. "It was a mess. It was schools having to pay sales taxes."
In order to receive the sales tax for school projects, such as recent school renovations projects, the school board deeds the property to the county. The county in turn pays for the project and receives the sales tax refund. Once a project is completed, the county deeds the property back to the school board.
"So this week (Wayne Memorial Hospital president) Bill (Paugh) and a group of people from the N.C. Hospital Association are going to the legislature to talk about that item," Best said. "If you see your legislators, please talk to them about it. That is ridiculous, a nonprofit organization having to pay sales tax."
Paugh said that Best was speaking of Advocacy Day in the legislature that will be held May 19.
"Several of us from here are going up, and we have room if any other board members would like to go," he said. "We have appointments scheduled with our legislators. We want to share with them some of the legislation they are considering that has an effect on how we provide health care."
Board Chairman Jim Parker had some advice for those planning to go.
"What you are going to hear if you get to a legislator is, 'Well, you know, for-profits have to pay the tax and don't get it back,' so we shouldn't get it back either," he said. "That is what you will hear.
"Well, the problem is our indigent care. You have to get sales tax back to provide indigent care because a for-profit hospital is not going to provide the indigent care to the extent that we are going to provide it. That is the difference that you come back with."