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Panel sends bill forward to exempt small rural ambulance services from provider tax
Summary
Senate File 2765, which would exempt small rural ambulance services from the Minnesota health-care provider tax, was passed without recommendation by the Senate Taxes Committee on April 1 and referred to Health and Human Services.
Senate File 2765, which would exempt certain small rural ambulance services from the state's health-care provider tax and allow DHS to seek a federal waiver to preserve federal financial participation, was passed without recommendation by the Senate Taxes Committee on April 1 and referred to the Committee on Health and Human Services.
Senator Hauschild said the bill targets ambulance providers outside the seven-county Twin Cities metro area and outside the cities of Duluth, Mankato, Moorhead, Rochester and St. Cloud, with annual revenues below $10 million. "This legislation will help reduce the financial burden on small ambulance services that provide care in rural areas," he said, and asked the committee to consider the unique challenges facing Greater Minnesota EMS.
Randy Strohmeyer, executive director of Lake County Ambulance Service, testified in support and described the proposed exemption as a way for small services to keep funds for purchase of medications, equipment and personnel. "We save a whole lot of time, money, and resources in calculating what that tax and that fee is gonna be to give to the state...we basically keep it in our pockets, we can reinvest it for the life saving care that we're providing," Strohmeyer said. He also said volunteer ambulance services are already exempt and this bill would add roughly 34 additional ambulance services to the exemption.
Senator Hauschild moved that SF 2765 be passed without recommendation and referred to Health and Human Services; the committee recorded the motion as carried by voice vote. Committee members and the sponsor noted the Department of Revenue's preliminary estimate that the change would reduce receipts to the Healthcare Access Fund by approximately $500,000 beginning in 2026 and that it remains to be determined whose provider-tax target would be affected if the exemption is enacted.
The bill will be reviewed in Health and Human Services, where DHS would also consider whether to seek federal approval or waivers needed to preserve federal Medicaid matching funds if the provider-tax structure changes.
