N.Y. Comp. Codes R. & Regs. tit. 20 § 414.3

Current through Register Vol. 46, No. 45, November 2, 2024

Section 414.3 - Qualified hospitals

Tax Law, §§ 284(1), 289-c

(a) A hospital which holds a current operating certificate issued by the New York State Department of Health pursuant to the authority of section 2805 of the Public Health Law or by the New York State Department of Mental Hygiene pursuant to the authority of article 31 of the Mental Hygiene Law and which qualifies as an exempt organization pursuant to section 1116(a)(4) of the Tax Law may:

(1) import or cause motor fuel to be imported into New York State;

(2) produce, refine, manufacture or compound motor fuel in New York State; or

(3) purchase motor fuel in New York State, for such hospital's own use or consumption without payment of, or in the case of a purchase of such fuel, without having had passed through to it, the motor fuel tax imposed pursuant to article 12-A of the Tax Law.

(b)

(1) A hospital as defined in section 2801 of article 28 of the Public Health Law means a facility or institution engaged principally in providing services by or under the supervision of a physician or dentist for the prevention, diagnosis or treatment of human disease, pain, injury, deformity or physical condition. A hospital includes, but is not limited to, a general hospital, public health center, diagnostic center, treatment center, dental clinic, dental dispensary, rehabilitation center (other than a facility used solely for vocational rehabilitation), nursing home, tuberculosis hospital, chronic disease hospital, maternity hospital, lying-in asylum, outpatient department, outpatient lodge, dispensary and a laboratory or central service facility serving one or more such institutions.

(2) A hospital for purposes of the Public Health Law does not include an institution, sanitarium or other facility engaged principally in providing services for the prevention, diagnosis or treatment of mental disability and which is subject to the powers of visitation, examination, inspection and investigation of the Department of Mental Hygiene except for those distinct parts of such a facility which provide hospital services.

(3) A hospital as defined in section 1.03 of the Mental Hygiene Law means the inpatient services of a psychiatric center under the jurisdiction of the Office of Mental Health or other psychiatric inpatient facility in the Department of Mental Hygiene, a psychiatric inpatient facility maintained by a political subdivision of the State for the care or treatment of the mentally ill, a ward, wing, unit, or other part of a hospital, as defined in article 28 of the Public Health Law, operated as a part of such hospital for the purpose of providing services for the mentally ill pursuant to an operating certificate issued by the Commissioner of Mental Health, or other facility providing inpatient care or treatment of the mentally ill which has been issued an operating certificate by such commissioner.

(c)

(1) In addition to being a hospital which holds a current operating certificate issued by the New York State Department of Health or the New York State Department of Mental Hygiene, the hospital must also qualify as an exempt organization for sales and compensating use tax purposes pursuant to section 1116(a)(4) of the Tax Law. In general, as a qualifying exempt organization, a hospital must be organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary or educational purposes, or to foster national or international amateur sports competition or for the prevention of cruelty to children. No part of a qualified hospital's net earnings may be used to benefit any private shareholder or individual. As an exempt organization, a hospital is subject to all of the provisions of section 529.7 of this Title.

(2) To establish its status as an exempt organization, a hospital must submit to the Department of Taxation and Finance a completed application for an exempt organization certificate in accordance with section 529.7(f) of this Title. Upon approval of the application, the department will issue the applicant a numbered exempt organization certificate.

(d)

(1) Where a qualified hospital as defined in this section imports motor fuel or causes motor fuel to be imported into New York State or produces, refines, manufactures or compounds motor fuel in New York State for its own use or consumption, such hospital is a distributor of motor fuel and must be registered as a distributor and report these activities monthly, by filing returns with the Department of Taxation and Finance, even though no tax may be due. In the event the hospital does not use or consume all such motor fuel and otherwise distributes the fuel in the State, it is subject to the tax imposed pursuant to article 12-A of the Tax Law on the motor fuel distributed.

(2) Where motor fuel is purchased by a qualified hospital, without the seller passing through the motor fuel tax, and such fuel is not used or consumed by the hospital, but is otherwise distributed in the State, such hospital is jointly and severally liable with the recipient of the motor fuel for the payment of the motor fuel tax.

(e) A qualified hospital (as defined herein) may purchase motor fuel upon which the seller has not passed through the motor fuel tax by issuing to the seller of the fuel a properly completed tax exemption certificate for qualified hospitals. Such exemption certificate must disclose the hospital's exempt organization certificate number referred to in paragraph (c)(2) of this section. An exemption certificate for a qualified hospital should be given to the seller of motor fuel at the time of an initial purchase. A separate exemption certificate need not be given for each additional purchase of motor fuel, provided each delivery of such fuel is substantiated as being exempt from tax with an individual bill, invoice, receipt or other form of written evidence given by the seller showing the qualifying hospital as the purchaser. Every bill, invoice, receipt or other form of written evidence must indicate the quantity of motor fuel received, the purchase price of the fuel without regard to any exemption and the price paid or to be paid by the exempt purchaser for such fuel. In addition, such evidence of exemption must reflect the hospital's exempt organization certificate number and must be signed and dated by the individual taking delivery of the motor fuel on behalf of such hospital. Sellers of motor fuel must establish a system of associating these individual bills, invoices, receipts and other forms of evidence with the tax exemption certificate for qualified hospitals initially received from the purchaser.

(f) All purchases of motor fuel upon which the seller has not passed through the motor fuel tax by a qualified hospital must be billed directly to the hospital and paid from the funds of such hospital.

(g)

(1) Any person selling motor fuel to a qualified hospital for such hospital's own use or consumption, as described in this section, who has not passed through to the hospital the motor fuel tax will be allowed a refund or credit in the amount of the motor fuel tax paid or assumed by, or passed through to such person but not passed through to the exempt purchaser. Records sufficient to substantiate all exemptions and any refund or credit claimed on the basis of such exemptions must be maintained by the seller. (See Part 415 of this Title for refunds, credits and reimbursements.)

(2) A registered distributor must report motor fuel sold to a qualified hospital in its monthly return of tax on motor fuels and may deduct the quantity so sold in arriving at the net taxable gallonage to the extent such fuel was sold without passing through to such hospital the motor fuel tax.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 414.3