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Calculating Gross Receipts
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For MinnesotaCare Tax purposes, gross receipts include payments you receive for health care services provided in Minnesota.
In gross receipts, you should include taxable and exempt payments. Any exempt payments will be subtracted from gross receipts on the exemption lines of your return.
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Amounts received from:
- Patients or their insurers, including MinnesotaCare tax expense charges, finance charges, and fees for missed appointments
- Government agencies, including federal, state, and county programs, for health care services provided
- Health care plans of federal, state of Minnesota, and Minnesota local government employees
- Nursing home residents or their insurers
- Staff model health maintenance organizations, reported on Form 1099
- Sponsors of health care research for services you provided as part of a formal program of health care research
- Home health agencies
Amounts received for:
- Legend and nonlegend drugs and gases included in health care services
- Medical supplies and equipment included in health care services, or sold to someone you provided health care services to
- Patients’ room and food
- Diagnostic, therapeutic, and laboratory services
- Outpatient services, including physical rehabilitation and counseling for mental health conditions
- Preventive and x-ray services
- Sales of prescription eyewear and hearing aids
- Ambulance services, except volunteer ambulance services
- Health and fitness classes prescribed as part of a course of treatment
- Services provided to other health care providers
Amounts received as:
- Performance bonuses and supplemental payments received from insurers
- Settlement adjustment payments from Medicare and other insurers
- Charitable donations used for health care services
Amounts received from providing:
- Hospice care services
- Home and community-based waivered services
- Targeted case management services
- Examinations for purposes of utilization reviews, insurance claims or eligibility, litigation, and employment, including reviewing medical records and providing expert witness testimony for these purposes
- Patient services outside Minnesota
- Copies of records to patients and insurers
- General education services to the public
- Exercise classes to the public
- Room and food to nonpatients
- Services under the following programs:
Amounts received from providing services to:
- Nursing homes
- Licensed community residential mental health facilities
- Licensed residential treatment programs for children with severe emotional disturbance
- Community mental health centers
- Assisted living programs and congregate housing programs
- Supervised living facilities for persons with developmental disabilities
- Housing with services establishments
- Board and lodging establishments that provide only custodial services and are registered to provide supportive and health supervision services
- Adult foster homes
- Day training and habilitation services for adults with developmental disabilities
- Boarding care homes
- Adult day care services
Additional amounts:
- Refunds to patients or their insurers
- Sales of medical supplies and equipment sold to someone you have not provided health care services to
- Receipts from gift shops, parking ramps, cafeterias, and rents
- Amounts received from retail sales of products subject to Sales Tax (such as vitamins, supplements, toothbrushes, pillows, etc.)
When you use another business to process or collect payments for you, the fee or commission they retain is taxable. You must include it with the amount you received in gross receipts.
Common entities that may retain a fee before remitting payment include:
- Billing services
- Collection agencies
- Credit card processing vendors
- Patient financing companies
Example 1: A collection agency collects $100 from a patient for services you provided. The agency keeps $30 as a commission and sends you the remaining $70. The taxable amount is $100.
Example 2: A patient pays $1,000 for a service you provided with a credit card. The credit card processing vendor keeps a percentage of the sale as a fee before depositing the remaining amount in your bank account. The taxable amount is $1,000.
When you receive goods or services (not money) in exchange for providing free or discounted patient services, the fair market value of the services you provide is taxable. Common examples include providing services to:
- Employees and their families as part of the employee’s compensation package
- Other professionals through professional discount agreements
- Other individuals when bartering or trading for goods or services
Determining the taxable amount in these cases depends on how you are reimbursed for the service. For more information on how to calculate the taxable amount for free or discounted services, refer to MinnesotaCare Tax Fact Sheet 5, Free and Discounted Patient Services.
Note: If you provide discounted services to individuals who do not provide any goods or services in return, the taxable amount is the actual amount you receive. If the service is provided free of charge, there is no tax due on the service.
If you are a health care service of a public or private educational institution, include only the following in gross receipts:
- Fees for services paid directly by patients or their insurers
- Fees for extended coverage
Do not include amounts designated for student health care services that are paid from:
- Student activity fees
- Student health care service fees included in student activity fees
- Allocations from the institution’s budget for your health care service
- Donations or grants
