Revised Code of Washington

Wash. Rev. Code § 82.04.4311 (2026)

✓ current as of May 2026

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(1) A public hospital that is owned by a municipal corporation or political subdivision, or a nonprofit hospital, or a nonprofit community health center, or a network of nonprofit community health centers, that qualifies as a health and social welfare organization as defined in RCW 82.04.431, may deduct from the measure of tax amounts received as compensation for health care services covered under the federal medicare program authorized under Title XVIII of the federal social security act; medical assistance, children's health, or other program under chapter 74.09 RCW; or for the state of Washington basic health plan under chapter 70.47 RCW. The deduction authorized by this section does not apply to amounts received from patient copayments or patient deductibles.

(2) As used in this section, "community health center" means a federally qualified health center as defined in 42 U.S.C. 1396d as existing on August 1, 2005.

[ 2005 c 86 s 1; 2002 c 314 s 2.]

Notes:

Effective date—2005 c 86: "This act takes effect August 1, 2005." [ 2005 c 86 s 2.]

Findings—2002 c 314: "The legislature finds that the provision of health services to those people who receive federal or state subsidized health care benefits by reason of age, disability, or lack of income is a recognized, necessary, and vital governmental function. As a result, the legislature finds that it would be inconsistent with that governmental function to tax amounts received by a public hospital or nonprofit hospital qualifying as a health and social welfare organization, when the amounts are paid under a health service program subsidized by federal or state government. Further, the tax status of these amounts should not depend on whether the amounts are received directly from the qualifying program or through a managed health care organization under contract to manage benefits for a qualifying program. Therefore, the legislature adopts this act to provide a clear and understandable deduction for these amounts, and to provide refunds for taxes paid as specified in section 4 of this act." [ 2002 c 314 s 1.]

Refund of taxes—2002 c 314: "A public hospital owned by a municipal corporation or political subdivision, or a nonprofit hospital that qualifies as a health and social welfare organization under RCW 82.04.431, is entitled to:

(1) A refund of business and occupation tax paid between January 1, 1998, and April 2, 2002, on amounts that would be deductible under section 2 of this act; and

(2) A waiver of tax liability for accrued, but unpaid taxes that would be deductible under section 2 of this act." [ 2002 c 314 s 4.]

Effective date—2002 c 314: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [April 2, 2002]." [ 2002 c 314 s 5.]

Notes of Decisions

Cited in 7 cases (1 in the last 5 years), 2010–2025 · leading case: Skagit Cnty. Pub. Hosp. Dist. No. 1 v. Dep't of Revenue, 158 Wash. App. 426 (Wash. Ct. App. 2010).

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Skagit Cnty. Pub. Hosp. Dist. No. 1 v. Dep't of Revenue, 158 Wash. App. 426 (Wash. Ct. App. 2010). “314, §§ 2, 3 (§ 2 codified as RCW 82.04.4311(1)). The hospitals argue that because their definition of “instrumentality” comes from the “first and most accepted entry” in the dictionary, their definition prevails.”

St. Joseph Gen. Hosp. v. Dep't of Revenue, 158 Wash. App. 450 (Wash. Ct. App. 2010). “314, §§ 2, 3 (§ 2 codified as RCW 82.04.4311(1)). Because the hospital is entitled to deduct the bad debt amounts from its B&O tax, the parties do not dispute that bad debt payments received from Medicare fall within the exemption of former ROW 82.”

Peacehealth St. Joseph Med. Ctr. v. Dep't of Revenue (Wash. 2020). · cites it 30× “4311 provides a business and occupation (B&O) tax deduction to public and nonprofit hospitals on compensation they receive from both Washington State and the federal government for health care services subsidized under certain government-funded programs, such as Medicaid and…”

Peacehealth St. Joseph Med. Ctr. v. State Of Wa, Dept. Of Revenue (Wash. Ct. App. 2019). · cites it 6× “John Medical Center1 appeal a superior court determination that, under RCW 82.04.4311, they are not entitled to a business and occupation (B&O) tax refund for taxes paid on compensation received from non-Washington state Medicaid or Children’s Health Insurance Programs (CHIP).”

Skagit Pub. Hosp. v. Dept. of Revenue, 242 P.3d 909 (Wash. Ct. App. 2010). “In 2002, the legislature deleted the 2001 amended language and created a new subsection stating "The deduction authorized by this section does not apply to amounts received from patient copayments or patient deductibles.”

St. Joseph Gen. Hosp. v. Dept. of Revenue, 242 P.3d 897 (Wash. Ct. App. 2010). “314, §§ 2 & 3 (§ 2 codified as RCW 82.04.4311). [4] Because the hospital is entitled to deduct the bad debt amounts from its B & O tax, the parties do not dispute that bad debt payments received from Medicare fall within the exemption of former RCW 82.”

REC Solar Grade Silicon, LLC v. Dep't of Revenue (Wash. Ct. App. 2025). · cites it 2× “2d at 8- 9 (quoting RCW 82.04.4311). Notably, both programs fall under chapter 74.”

— Wash. Rev. Code § 82.04.4311(1) — 2 cases

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