Georgia ~ Sales and Use Tax: Legislation on SOURCE Case Management Provider Service Charges Enacted

Enacted Georgia legislation expands the definition of “retail sale” or “sale at retail” to include service charges derived from a “referral from a SOURCE Case Management Provider,” meaning the authorization of, arrangement for, or coordination of long-term care services, including nursing home services by a SOURCE Case Management Provider. Such a provider is an entity that has successfully completed the Georgia Medicaid Enhanced Case Management application and enrollment process (including related mandatory training) and that has contracted with the Department of Community Health, Division of Medical Assistance, to provide enhanced case management services. The service charges derived from SOURCE Case Management Provider referrals will only be subject to state-level sales and use tax; local sales and use taxes will not apply.

Assessments of state sales and use taxes will accrue beginning July 1, 2011. However, the collection of the taxes on the service charges described above will not begin until the community health commissioner provides the revenue commissioner written notification concerning approval by the U.S. Department of Health and Human Services (HHS) of the state’s plan amendments for FY 2012 related to improving the delivery of long-term care through enhanced case management services and establishing a new base year for nursing home facility cost reports. If HHS approval is not given (or is reversed), or if federal financial participation is not available with regard to state sales and use tax revenues, accrued amounts of the taxes will lapse and the service charges described above will not be considered sales for purposes of sales and use tax.

The above changes contained in the legislation will be repealed automatically on the later of June 30, 2014, or when the state treasurer certifies in writing to the revenue commissioner that federal matching funds are no longer available. Provisions in the legislation pertaining to income tax are reported separately. (TAXDAY, 2011/05/18, S.4)

H.B. 117, Laws 2011, effective July 1, 2011

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