1. General. Taxes assessed against the provider agency, in accordance with the levying enactments of the several states and lower levels of government and for which the provider is liable for payment, are allowable costs. Tax costs may not include fines, penalties, or those taxes listed in subsection 2.

2. Taxes not allowable as costs. The following taxes are not allowable as costs: a. Federal income and excess profit taxes, including any interest or penalties paid thereon. b. State or local income and excess profit taxes. c. Taxes in connection with financing, refinancing, or refunding operation, such as taxes in the issuance of bonds, property transfers, issuance or transfers of stocks, etc. Generally, these costs are either amortized over the life of the securities or depreciated over the life of the asset. They are not, however, recognized as tax expense. d. Taxes from which exemptions are available to the provider agency. e. Taxes on property which is not used in the provision of covered services. f. Taxes, including sales taxes levied against residents and collected and remitted by the provider agency. g. Self-employment (FICA) taxes applicable to persons, including individual proprietors, partners, or members of a joint venture.

History: Effective July 1, 1984; amended effective July 1, 2001; May 1, 2006; April 1, 2018.

General Authority: NDCC 25-01.2-18, 50-06-16

Law Implemented: NDCC 25-18-03, 50-24.1-01