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Friday, August 19, 2016



This week, the Department of Revenue (DOR) published proposed regulations and procedures (Rule 560-7-8-.57) for implementing SB 258 from the 2016 Legislative Session, titled "Qualified Rural Hospital Organization Expense Tax Credit." DOR will consider public comments until September 16, 2016 when the rules will be adopted.

The Department of Community Health (DCH) will soon publish a list of qualified hospitals and the tax credit program will begin January 1, 2017.

SB 258 allowed a Georgia income tax credit for taxpayers who make contributions to a qualified rural hospital. First, the taxpayer applies to DOR with the amount of contribution planned. DOR approves or disapproves within 30 days. If approved, the actual donation must be made within 60 days.

A quick review of the key provisions of the tax credit:
Limit of $4 million in contributions per hospital.
Cap of $50 million in tax credits for 2017.

January 1 to June 30, $2 million limit on tax credits for individual taxpayers per hospital and $2 million for corporate and fiduciary taxpayers per hospital.

July 1 to December 31, DOR will approve all until $4 million per hospital is reached.

For single, individual or head of household, taxpayer donors receive tax credit of 80% of the donation or $2,500 per year, whichever is less.

Married, filing jointly, is limited to 80% of the amount donated or $5,000, whichever is less.

For corporations, the credit is limited to 70% of the donation or 75% of the Georgia income tax liability of the corporation, whichever is less.

The tax credits cannot accumulate to more than the donor's Georgia tax liability.

The process is first-come, first received with no proration.

The Process:

Donor must file electronically with the DOR for preapproval of the tax credit, identifying the hospital and amount of the proposed donation.

Donor receives approval or disapproval from DOR within 30 days.

Donor must then actually make the contribution within 60 days.

Donor must submit an electronic report detailing the amount of the contribution, the number on the certificate after the donation and a copy of the letter from the rural hospital noting the receipt of the donation within 30 days.

DOR will review and, if approved, add to the hospital's list of donations...if disapproved, subtract from total.

Hospital Responsibilities:
The rural hospital must submit a 5 year plan detailing the financial viability and stability of the hospital.
DCH will review hospital plans and consider in future eligibility determinations.

Must report monthly on the receipt and expenditure of all donations, including names, addresses and ID numbers of donors.

NOTE: This process will not be complicated. There is no reason for any hospital, individual or business to contract with or hire a third party vendor to receive the benefits of this tax credit. Please call me, the Department of Revenue or the Department of Community Health with any issues or questions at the appropriate time.

The DOR proposed rule may be accessed at http://dor.georgia.gov/sites/dor.georgia.gov/files/related_files/document/LATP/Regulation/Proposed%20Rule%20560-7-8-.57%20Qualified%20Rural%20Hospital%20Organization%20Expense%20Tax%20Credit.pdf. Full transcripts of bills may be found at http://www.legis.ga.gov/en-US/default.aspx. Simply type the bill number into the box at the top left-hand corner of the screen and specify if it is in the House or the Senate.


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