PORT JEFFERSON HEALTH CARE FACILITY, ET AL., RESPONDENTS, v. BRIAN WING, &C.,
ET AL., APPELLANTS.
94 N.Y.2d 284 (1999).
December 16, 1999
2 No. 184
(99 NY Int. 0173)
Decided December 16, 1999
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This opinion is uncorrected and subject to revision before publication
in the New York Reports.
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Andrew D. Bing, for appellants.
Richard Hamburger, for respondents.
LEVINE, J.:
Plaintiffs are 21 for-profit residential health care facilities
(RHCFs) located in various parts of the State. They have brought this
suit challenging the constitutional validity ofassessments of 1.2% and
3.8% on RHCF gross receipts under a statutory scheme whereby those
taxes on receipts for the care of Medicaid patients are reimbursed as
a recoverable expense of care.
The State first assessed a tax on the gross receipts of RHCFs for the
period January 1, 1991 to March 31, 1992, at the rate of .6%, with no
reimbursement (L 1990, ch 938, § 28). The statute creating the
assessment specifically provided that the tax was not a recoverable
Medicaid expense ( see, Public Health Law § 2807-d(10)(a)). Thus,
in the original RHCF gross receipts legislation, the burden of the tax
was imposed uniformly on all of the gross receipts of all RHCFs,
regardless of source. (n.1) The .6% original assessment is not at
issue on this appeal.
In 1992, the Legislature extended the original .6% assessment and
imposed an "additional assessment" of 1.2% (L 1992, ch 41, § 5;
Public Health Law § 2807-d(2)(b)(ii)). That enactment provided,
however, that, contingent upon all Federal approvals necessary for
Federal financial participation in the State's Medicaid program, the
additional 1.2% assessment as applied to RHCF Medicaid receipts would
be a reimbursable cost of care ( id., § 11; Public Health Law
2807-d(10)(b)). In 1995, the Legislature enacted a "further additional
SNIPPETS:
PORT JEFFERSON HEALTH CARE FACILITY, ET AL., RESPONDENTS, v. BRIAN WING, &C.,
Andrew D. Bing, for appellants.
Richard Hamburger, for respondents.
Plaintiffs are 21 for-profit residential health care facilities (RHCFs) located in various
They have brought this suit challenging the constitutional validity ofassessments of 1.2% and
The statute creating the assessment specifically provided that the tax was not a recoverable
Thus, in the original RHCF gross receipts legislation, the burden of the tax was imposed
In 1992, the Legislature extended the original .6% assessment and imposed an "additional
Plaintiffs brought this action in 1995, seeking declaratory and injunctive relief, and a
On this appeal, they rely entirely on the claim that their Fourteenth Amendment rights to
They assert that this statutory scheme unconstitutionally discriminates against RHCFs whose
On plaintiffs' motion for summary judgment, theysubmitted evidence to demonstrate that while
The court further held that plaintiffs' evidence dispelled all of the rationales suggested by
The Appellate Division also held that a gross receipts tax treating "differently the same
First, any classification respecting differential taxation of nursing homes, in this case
here rational basis review is being applied to a system of taxation.
We assume without deciding that this taxing scheme -- which at most has the net effect of
That standard of review has been characterized by the United States Supreme Court as "a
Under the rational basis standard, the Legislature, in creating a classification, "need not
The United States Supreme Court's rejection of the equal protection challenge to California's
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