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Tax credit legislation to bolster Georgia rural hospitals

Pending law allows taxpayers to apply for a state income tax credit for donations to these struggling facilities.

Jeff Lagasse, Associate Editor

To help support struggling rural hospitals in Georgia, state taxpayers who donate to those hospitals as of January 2017 will be eligible for an income tax credit.

The bill, which is soon to become law, was conceived by state Rep. Geoff Duncan, R-Cumming, and passed back in April.

Senate Bill 258 will allow taxpayers to apply for a state income tax credit for either 70 percent of their contribution to an approved rural hospital or $2,500, whichever amount is less. For couples filing jointly, the credit can be 70 percent of the contribution or $5,000. Corporations or fiduciary taxpayers can receive a tax credit of up to 70 percent of contributions or 75 percent of income tax liability.

[Also: No small feat: Rural practices brace for MACRA]

Donations of up to $4 million to approved hospitals will be eligible for a tax credit as well, but only for a limited time: credits will be first-come, first-served and will expire after three years.

The program is set to last through 2019, and the statewide cap in tax credits will climb steadily during that time -- $50 million next year, $60 million in 2018 and $70 million in 2019.

Hospitals that qualify for the program will be required to submit a five-year plan detailing their financial stability, and will have  to submit monthly reports of donations received, as well as how the money is spent.

[Also: Rural hospitals hardest hit by lack of Medicaid expansion, Health Affairs study shows]

Because there an annual caps, taxpayers will have to get their tax credits pre-approved, and before a donation can be made they'll be required to submit an online form to the Georgia Tax Center.

Rural hospitals across the country have been struggling as of late. Earlier this year, a study by iVantage Health Analytics found that dozens of rural facilities have shuttered their doors since 2010, and hundreds more are at risk of doing so.

[Also: HRSA awards $16 million to expand telehealth, other rural healthcare services]

States in the South are especially vulnerable. In Mississippi, 79 percent of rural facilities have a high rate of vulnerability; in Louisiana, it's 58 percent; Georgia, 53 percent; and in Texas, 50 percent, according to the study's Hospital Vulnerability Index.

Sixty-five percent of rural hospitals operate on a negative margin, the study said. Federal reimbursement cuts and policy decisions have cut their revenue.

Twitter: @JELagasse