Availability of Federal Business Deduction and State Tax Credit Spurs Support for Georgia’s Rural Hospitals

January 14, 2020


Date: January 14, 2020
From: Kate Saylor, Director of Marketing and Communications, Georgia HEART Hospital Program
Subject: Availability of Federal Business Deduction and State Tax Credit Spurs Support for Georgia’s Rural Hospitals

After applying for $55 million of the $60 million Georgia Rural Hospital Organization (“RHO”) Expense Credits that were available in 2019, as of January 14, 2020, 553 Georgia taxpayers have applied for $6.7 million of the $60 million in RHO credits available in 2020. 

“Our participating rural hospitals are very excited about the continued financial support that citizens from throughout Georgia are providing to help enhance access to rural treatment,” says Lisa Kelly, President of Georgia HEART Hospital Program, LLC, which helps all 56 eligible hospitals market and process taxpayer contributions. 

Because the Internal Revenue Service has recently published proposed regulations confirming the favorable treatment of payments by businesses who financially support rural hospitals, the early 2020 enthusiasm for the Georgia HEART program is expected to continue.

“The IRS proposed regulations issued in December make it clear that businesses may take a federal income tax deduction for making payments to rural hospitals that are expected to build customer, client, or patient goodwill,” explained Kelly. “Plus, in 2019, the Georgia Department of Revenue published a rule confirming that the owners of pass-through businesses can also claim a 100% Georgia HEART tax credit for the portion of those payments corresponding to their ownership interest in the businesses.”

The availability of a both a federal and state income tax benefit makes it likely that the $60 million cap will be reached in 2020. Until June 30, the maximum amount of Georgia HEART credits for which a pass-through business owner may apply is $10,000. After June 30, there is no limit on the amount for which business owners may apply, up to the amount of the Georgia income tax liability associated with their interest in the business. 

Regular “C” corporations that make a payment to a Georgia HEART hospital may also take a federal income tax deduction and can secure a Georgia income tax credit for the lesser of 75% of their Georgia tax liability or the amount of their business payment to the hospital.

Meanwhile, Josh Belinfante, an attorney with the Robbins Firm, has delivered to Georgia HEART a letter detailing the glaring omissions and shortcomings of a report resulting from a Special Examination of the Georgia RHO Expense Credit program by the Georgia Department of Audits and Accounts (“GDAA”). In his letter, Belinfante explains that:

  • “Georgia HEART’s provision of marketing and administrative services to the rural hospitals participating in the Program has been indispensable to the implementation, early survival, and long-term success of the Program;
  • All of the rural hospitals engaging Georgia HEART have done so on a voluntary basis and have expressed a high level of satisfaction with the professionalism, performance, and fees-relative-to-service value of Georgia HEART;
  • Georgia HEART has operated in a transparent and accountable manner, going well-beyond the requirements of the law and the good faith stewardship of a program having a public impact; and
  • Georgia taxpayers have wholeheartedly embraced the Program, appreciate having the choice to support rural hospitals, and are very satisfied with the contribution marketing and administration services provided by Georgia HEART.”

In response to the GDAA recommendation that lawmakers consider having a state agency assume responsibility for the Georgia RHO Expense Credit program, Belinfante opined that such an approach “would eliminate virtually all of the outreach and education efforts” that Georgia HEART has undertaken to make the program a success.

“Georgia HEART looks forward to continuing to provide exceptional client services to its valued rural hospital clients and their supporters and to working with Georgia lawmakers to further enhance this life-saving program,” said Kelly.


Georgia HEART Hospital Program, LLC
3740 Davinci Court, Suite 375
Peachtree Corners, GA 30092