Oklahoma Senate bill provides tax break for rural hospitals

Journal Record, The (Oklahoma City), Apr 12, 2006 by Journal Record Staff

Oklahoma's rural hospitals may receive sales tax reimbursement for the upgrade and expansion of facilities.

Senate Bill 1780, by state Rep. Purcy Walker, D-Elk City, and state Sen. Jeff Rabon, D-Hugo, has been approved by the Senate and the House Revenue and Taxation Committee.

The bill would give rural hospitals and nursing homes a sales tax rebate for supply and material purchases made for construction improvements or expansion.

These hospitals are essential to rural communities and often serve as the only health-care facility within traveling distance, Walker said.

Walker said the rebate program stemmed from House Bill 1570, which passed last year but capped the total rebates at only $650,000.

After seeing the success and need of this rebate program, I knew that $650,000 would not be able to cover all the facilities in need of repairs, Walker said. Senate Bill 1780 increases the cap on total sales tax rebates to $2 million annually. Now this will give every rural nursing home and hospital a chance to participate in this rebate program.

According to the Oklahoma Department of Health, 31 of Oklahoma's 146 hospitals are considered critical access facilities, which means they are the sole community providers in a census-defined rural area.

Walker said SB 1780 would require hospitals to initially pay for the supply purchases, but it would then allow the state to reimburse them for the sales tax paid on items. The bill only applies to hospitals located in counties with a population of 100,000 or less.

Walker said he not only sees SB 1780 as a tool providing needed health care to all citizens of the state but also a way to boost Oklahoma's economy.

Projects like these bring new jobs, not just during the construction process but afterward as well, he said. Quality health services also attract new families to an area and encourage current residents to stay.