SN 95(2)

Health Care Center Tax

PURPOSE: This Special Notice describes an annual tax that is imposed on health care centers.

EFFECTIVE DATE: Effective upon issuance and applicable to calendar years commencing on or after January 1, 1995.

STATUTORY AUTHORITY: Conn. Gen. Stat. §12-202a, as added by 1994 Conn. Pub. Acts 4, §49 (May Spec. Sess.).

NEW TAX ON HEALTH CARE CENTERS: A tax is imposed on each health care center, as defined in Conn. Gen. Stat. §38a-175. The tax is measured by the health care center's total net direct subscriber charges. The tax rate is 1.75%.

TAX IS IMPOSED UPON HEALTH CARE CENTER: Like the Connecticut insurance premiums tax (which is imposed upon insurers), the tax is imposed upon health care centers, not their subscribers. Therefore, health care centers are not required to charge their subscribers an additional amount on account of the tax.

CHARGES INITIALLY SUBJECT TO THE TAX: Net direct subscriber charges under a contract or policy, coverage under which contract or policy commences on or after January 1, 1995, are subject to the tax. Net direct subscriber charges under a contract or policy, coverage under which contract or policy commences before January 1, 1995, are not subject to the tax even if those charges are paid on or after January 1, 1995.

(A paragraph [that is headed "Health Maintenance Organizations"] in SN 94(13) incorrectly indicates that the tax applies to total net direct subscriber charges received on or after January 1, 1995.)

OTHER PROVISIONS OF LAW APPLICABLE TO TAX: The provisions of chapter 207 of the Connecticut General Statutes that apply to insurance companies and pertain to the filing of returns, declarations of estimated tax, payment of estimated tax instalments, assessment and collection of tax, imposition of penalties, accrual of interest on the underpayment of tax or estimated tax, administrative hearings, and appeals to the superior court also apply to health care centers.

EFFECT ON OTHER DOCUMENTS: SN 94(13) is superseded and modified in part and that part may not be relied upon after the date of issuance of this Special Notice.

EFFECT OF THIS DOCUMENT: A Special Notice is a document that announces a new policy or practice in response to changes in State or Federal laws or regulations or to judicial decisions. A Special Notice indicates the Department's informal interpretation of Connecticut tax law and may be referred to for general guidance by taxpayers or tax practitioners.

SN 95(2)
Health care center tax
Issued: 2/1/95