The LBJ Hospital is paying the 5% excise tax on medical and pharmaceutical supplies, despite an opinion issued by the Attorney General to the contrary.
According to testimony by the CEO of LBJ Hospital Taufetee John Faumuina Jr. at a hearing of the Senate Health Committee on hospital finances yesterday, the Attorney General Talauega Eleasalo Ale‘s opinion was that medication and supplies that the hospital uses to treat patients should not be charged the 5% duty on goods for commercial resale.
But wheelchairs and other equipment that the hospital sells to the public, is subject to the tax.
The CEO said the hospital asked the AG to render an opinion on this issue because the hospital was being treated like other authorities such as the American Samoa Power Authority and the American Samoa Telecommunications Authority.
Taufetee told the hearing the Chief of Customs has refused to follow the AG’s opinion and will not release shipments for the hospital until they pay the excise tax.
Senators were surprised to hear that the hospital was being charged the 5% excise tax and also that Customs was ignoring the AG’s legal opinion.
They urged that the LBJ CEO seek the governor’s intervention.
They also asked for assistance from deputy treasurer Tina Vaa to correct this situation.
They pointed out that there was no intention to subject the hospital, to the 5% excise tax.
When Attorney General Talauega Eleasalo Ale appeared at a hearing before the Senate this morning, Senator Magalei brought up the hospital excise tax.
The AG said after his office issued the legal opinion he was of the that Customs had stopped charging the hospital.
