Rehabilitation Services Companies and Municipal B&O Taxes

Suppose a rehabilitation services company furnishes personnel to a skilled nursing facility or assisted living facility in a municipality that imposes the business and occupation tax. The rehabilitation company must report its entire gross receipts from supplying services at or through such facility, including those services direct billed to a third party payor (including government, insurance, and private pay) or billed to the skilled nursing facility. The measure of tax for the rehabilitation services company includes all receipts (even if denominated as “reimbursements”) attributable to activities and services at the facility in the municipality without any deduction for supervisory, overhead or back office activities whether inside or outside the municipality. It is immaterial whether the facility is for-profit or non-profit or whether the rehabilitation company is an affiliate of the entity that owns or operates the facility.