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Today, at the General Assembly a Senate Finance Committee passed a motion to send a new version of tax reform bill HB998 to the Senate for a vote. If this bill passes as it is currently written, it will require WakeMed and many other not-for-profit hospitals like us to pay sales tax after a four-year phase in period.
In WakeMed's case, this means a $10 million impact on our bottom line. Unfortunately, a financial hit of this magnitude would negatively impact on the services WakeMed and other hospitals like us are able to provide for patients.
Additionally, this tax bill is meant to reform the tax code to grow jobs in North Carolina. Hospitals are not only care providers, but they are also frequently the largest employers in their communities. This version of the tax bill which eliminates the non-profit sales-tax refund would be detrimental to all North Carolina non-profit hospitals and would ultimately mean the loss of jobs and hospital services in many areas.
Not-for-profit safety net hospitals do benefit from not paying sales tax, but they reinvest much more than that in charity care delivered to members of our communities who cannot pay for health services and other community benefit activities. In fact, WakeMed's community benefit for FY 2012 was $189,796,508 plus an additional $13.4 million in bad debt. Bottom line is we more than earn a sales tax exemption as a not-for profit in North Carolina.
WakeMed Board of Directors Resolution
North Carolina Hospital Association Statement
3000 New Bern Ave.
Raleigh, NC 27610