wa-law.org > bill > 2023-24 > SB 5767 > Original Bill
The legislature further finds that some nonprofit hospitals find themselves with large revenues and inflated administrative salaries but fail to fulfill their fundamental responsibilities to the communities they are meant to serve. This neglect of their duties, including failure to offer essential reproductive health services, provide safe working conditions to frontline staff, and care for our most vulnerable populations, while simultaneously engaging in excessive compensation of top earners, erodes trust in the health care system.
The legislature intends to expand access to affordable health care by controlling health care administrative costs through a tax on excess compensation paid by hospitals. This additional revenue will provide funding to increase Washingtonians' access to health care, including funding programs that advance health equity and expand access to reproductive care.
"Annual total compensation" means the total compensation of a covered employee as required to be reported to the department of health under RCW 43.70.052(3).
"Average annual wage" has the same meaning as in RCW 50.04.355.
"Covered employees" means the five highest compensated employees of a hospital, who do not have any direct patient responsibilities, and for whom the hospital must report compensation under RCW 43.70.052(3). If the five highest compensated employees do not include the lead administrator for the hospital, "covered employee" also includes the lead administrator.
"Excess compensation" means the annual total compensation of a covered employee, as required to be reported under RCW 43.70.052(3) on or before December 31st of the tax year, that exceeds 10 times the average annual wage most recently published, as of December 31st of the tax year, by the employment security department.
"Hospital" means any hospital licensed under chapter 70.41 RCW.
"Tax year" means the calendar year immediately preceding the year in which the tax under this chapter is due and payable to the department.
Beginning January 1, 2024, for taxes due in 2025, an excess compensation tax is imposed on the hospitals that pay covered employees excess compensation. The tax equals the sum of the annual total compensation, as required to be reported to the department of health under RCW 43.70.052(3) during the tax year, of any covered employee that is paid excess compensation during the tax year, multiplied by 7.5 percent.
Taxpayers owing tax under this chapter must file, on forms prescribed by the department, a return and pay the tax due as provided in RCW 82.32.045(3).
The department may allow hospitals that are affiliated, as defined in RCW 82.04.299, with each other to report on a single return.
The tax imposed under this chapter is in addition to any tax imposed under chapter 82.04 RCW.
Except as otherwise provided by law and to the extent not inconsistent with the provisions of this chapter, chapter 82.32 RCW applies to the administration of taxes imposed under this chapter.
The department may enter into data-sharing agreements with the department of health for the data collected under RCW 43.70.052(3).
If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.