AmerisourceBergen State Government Affairs Helps Defeat 2022 State Tax Legislation with Harmful Effects on Physicians, Pharmacies and Patients.

Mar 24, 2022

The AmerisourceBergen State Government Affairs team successfully opposed tax legislation in Washington and Hawaii which would have significantly burdened providers and patients and negatively impacted healthcare supply chain participants.  

In late January, Washington state lawmakers introduced HB 2091/SB 5952—legislation to increase the state’s Business and Occupations (B&O) tax rate. If enacted, the legislation would have increased costs across the prescription drug supply chain, and negatively impacted independent and community physicians, pharmacies, and patients. In addition to communicating with Washington legislators, AB SGA worked with the Healthcare Distribution Alliance (HDA) and other external stakeholders to oppose the companion bills. AB SGA drafted letters to key elected officials and issued action alerts to AB’s Washington based team members and independent pharmacist customers asking them to contact their lawmakers. AB SGA also coordinated with pharmacy trade associations to craft advocacy materials and develop strategy throughout the 2022 legislative session. These efforts succeeded in preventing the bills from advancing through the legislative process, and both bills failed to advance when the Washington Legislature adjourned sine die on March 10, 2022.

In Hawaii, state lawmakers introduced S.B. 2020, which sought to “clarify” that HI’s general excise tax (GET) wholesale rate of 0.5% would only apply if and when a subsequent sale of a product was subject to a 4% prevailing rate. As written, this legislation would have effectively raised taxes on healthcare (and other industries) with an estimated annual burden of $40M-$70M on the healthcare supply chain, and the majority of the impact felt by providers and patients in Hawaii. AB SGA worked closely with HDA alongside local hospitals, the Retail Merchants of Hawaii, the Tax Foundation, and pharmacy stakeholders to oppose the measure. All parties cited serious concerns about the potential for increased costs to the healthcare system and patients, especially in Hawaii’s underserved and rural communities. On March 16, 2022, despite strong pressure from the Hawaii Department of Taxation to pass the measure, lawmakers decided to “defer” the bill in committee due to its impact on healthcare—essentially defeating the measure.

AB SGA will continue to monitor the introduction and attempts to advance bills in all states and oppose tax legislation that directly impact our independent and community pharmacy and physician customers. 

If you have questions please reach out to Chris Johnson, Senior Manager of State Government Affairs at christian.johnson@amerisroucebergen.com