BOISE — A sales tax exemption bill inspired by a Twin Falls medical clinic will move to the Senate floor.

HB 513 would provide a sales tax exemption for free and charitable medical clinics across the state, including the Wellness Tree Community Clinic in Twin Falls. Such clinics, which serve low-income, often-uninsured patients, are not currently exempt from paying the state’s sales tax — but some other medical institutions, such as hospitals, are.

This is Rep. Clark Kauffman’s second time around trying to change that; a similar bill last year failed to make it through the Senate. HB 513 passed 42-27 in the House last week.

The Filer Republican said he initially brought last year’s bill after speaking with Arne Walker, executive director of the Wellness Tree Community Clinic.

"It seemed odd that they were having to pay sales tax," Kauffman said. "This is something I was passionate about and thought needed correcting." 

In a testimony before the Senate Local Government and Taxation Committee Thursday, Walker talked about the financial challenges of running a free clinic, noting the Twin Falls clinic’s dependence on volunteers to keep running smoothly.

“Free clinics across the state are a vital resource for the state and for the communities,” Walker said. “Obtaining a sales tax exemption for these clinics will allow them to use the money that they’ve raised for products or supplies and put it into buying products and supplies for these patients.”

There are 10 free medical clinics in Idaho, with others located in the Boise area and in northern and eastern Idaho. While the clinics vary in their offerings, the Wellness Tree Community Clinic offers basic medical care, dental care, physical therapy, vision care, health education and other services to indigent patients.

Committee member Sen. Jim Patrick, R-Twin Falls, said the exclusion of free clinics from the existing law on tax exemptions for medical institutions seemed “almost like an oversight.”

Walker said he agreed.

“I do think it is ironic that the organizations that do the most with the least are still charged sales tax when all the large hospitals, which make millions of dollars in income and high wages, are exempt from paying sales tax,” Walker said.

Exempting free clinics from paying sales taxes would cost just under $11,000 per year.

The committee voted near-unanimously to send the bill to the Senate floor, with the only no vote coming from Sen. Jeff Siddoway, R-Terreton.