Mimbres Memorial Hospital Nursing Home

23-03

On February 3, 2017, and then again on February 14, 2017, the Department sent letters to the Taxpayer denying their request for a refund of gross receipts tax for periods in 2014 and 2015. On February 21, 2017, and later on March 1, 2017, the Taxpayer filed formal protests on the refund denials. The Taxpayer is a hospital that claimed two different deductions from gross receipts tax: the deduction for receipts paid by a managed health care provider for commercial contract services, and the deduction for receipts paid by the United States government or its agencies. The Department argued that, with the exception of the deduction for costs incurred in the construction of hospitals, there was no deduction from gross receipts explicitly provided for hospitals in statute. For the two deductions the Taxpayer claimed, the Department argued that only individuals specifically included in the definition of a health care practitioner were allowed to take the deductions. The Hearing Officer determined that based on previous decisions, both deductions were limited to receipts received for services of individual health care practitioners and not for health care facilities. This interpretation was further supported by Department regulation. Since a hospital is not an individual health care practitioner in a specified field of practice, the hospital was not allowed to take the deductions. Because of this, the Hearing officer denied the protest and ordered that the Department was correct in denying the refunds.