Healthcare Providers Beware: Failure to Pay State Tax Could Lead to License Suspension

On May 16, 2016, a new rule went into effect that empowers the New Jersey Division of Taxation Director (Director) to notify a licensing State agency that a license issued by the agency to conduct a profession, trade, business, or occupation should be suspended where a license holder fails to pay a State tax indebtedness.

The new rule changes allow the Director to contact a State licensing agency to request information regarding license holder’s business entity (EIN, business address, business name, etc). Subsequent to the receipt of this information from a State agency, the Director will periodically send a notice to license holders, requiring them to verify, within 15 days from the date of the preliminary notice, the information supplied by the State licensing agency. This information will be used to conduct a review of the license holder’s compliance with New Jersey tax laws, “as a condition to the continued licensing of the person or granting of a license to the person by one or more State agencies, and to update or correct, as necessary, the tax records and files of the Director.”

If the review of tax compliance of any person indicates that the tax indebtedness has been reduced to a judgment or the time to exercise available protest and/or appeal remedies has expired, the Director will notify the person by registered or certified mail of the Director’s intent to demand the suspension of the person’s license by the State agency that issued the license.

The new rule also allows the Director to determine whether the license holder is properly registered as a business.

While the new rule provides specific notice requirements, the time frames to respond are fairly short and any issues with receipt of the notice or timely response will create problems for providers when the State agencies begin to take steps to suspend the license holder’s license. As providers are painfully aware, license suspension has collateral and far reaching consequences even when the suspension is reversed and the license is restored.

If you have any questions regarding the new regulation, license suspension, or the suspension or revocation of Medicare/Medicaid billing privileges, you may contact our office.