New tax credit to benefit donors to rural hospitals

Published 3:00 pm Monday, October 10, 2016

ATLANTA — An innovative state income tax credit for Georgia taxpayers who contribute to financially struggling rural hospitals is just months from implementation.
“It’s been extremely gratifying to watch the Rural Healthcare Reform Bill go from just an idea I had while sitting in church last October, all the way to a powerful tool for rural Georgia to help save its local healthcare systems,” said Rep. Geoff Duncan (R-Cumming).
The Georgia Department of Community Health and the Georgia Department of Revenue have drafted rules and regulations for the implementation of the tax credit. The DCH also has posted on its website a tentative list of hospitals that should qualify for the tax-credit program when it begins in January 2017. Phoebe Sumter Medical Center is among those.
“I’m extremely grateful for the hard work of both DCH and DOR and their willingness to adhere to the original intent of this legislation by each drafting rules and regulations around this program that are both easy to understand and simple to navigate for all of the eligible hospitals,” Duncan said.
The new income tax credit is for either 70 percent of an individual taxpayer’s contribution to an approved rural hospital, or $2,500, whichever is less. For a couple filing jointly, the credit could be 70 percent of the contribution or $5,000, whichever is less. A corporation or fiduciary taxpayer could get a tax credit of up to 70 percent of contributions or 75 percent of income tax liability.
Donations of up to $4 million to an approved rural hospital will be eligible for the tax credits, which will be awarded on a first-come, first-serve basis. The statewide cap of tax credits will be $50 million in 2017, $60 million in 2018, and $70 million in 2019. The program is set to expire after three years.
Because of the annual caps, tax credits must be preapproved. Interested taxpayers must submit an online form (FORM IT-QRHOE-TP1 ) to the Georgia Tax Center prior to making a donation and then report the actual amount of each donation within 30 days.
To be eligible to participate, each hospital must submit a five-year plan about its financial viability and stability. Then hospitals just have to submit monthly reports of donations received and how the money was spent.
Therefore, the administrative burden for the participating rural hospitals should be negligible and require no additional staff or consultants, Duncan said.
“This innovative piece of legislation has put Georgia at the forefront of the national conversation for rural healthcare reform and has positioned our state to bring broader healthcare solutions to the table on a national level,” he added.
House Appropriations Chairman Terry England, who was on the conference committee that worked out the final provisions in Senate Bill 258, said it’s important that 100 percent of the donated money go directly to the rural hospitals rather than to consultants.
“In working with Geoff to get final passage of the bill, our intention was that every dollar raised for the hospitals would go to stabilize them and not set up a program requiring them to hire staff or consultants in order to participate,” England (R-Auburn) said. “Geoff has continued to work with the departments of Revenue and Community Health to make the process simple and easy, both for the taxpayers and the hospitals. I expect this program to have a sustaining impact on rural health care in Georgia for generations to come.”
House Ways & Means Committee Chair Jay Powell, who also served on the conference committee ironing out the final provisions of the legislation, agreed.
“I can’t say enough about Geoff Duncan’s novel approach to rural health care,” said Powell (R-Camilla). “This program creates a true public-private partnership in support of our struggling rural hospitals. The program was designed so that all of the money would be used to support the hospitals with very little administrative effort required. There should be no need for any hospital to have to hire personnel or contract with outside consultants in order to take advantage of this program.”
The hospitals listed below have been determined to qualify for the Rural Hospital Tax Program for Calendar Year 2017 based on current information. The final approved list will be posted Dec. 1 on the DCH website.