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Surgery center tax rate
Them is a great deal of misinformation
being circulated in our community relating
to the City's decision, a few years ago, to
correctly interpret the tax rate that is appli-
cable to surgery centers.
Contrary to some claims, the City is NOT
increasing business taxes on physicians or
their medical practices.
There is a separate business tax cat-
egory for physicians or other professionals.
Surgery centers are not Professionals, and
no doctors, or any other professional, are
being asked to pay the commerci[d leasing
business tax rate that should be applicable
to surgery centers.
Surgery centers are a big business unlike
individual medical practices. Specialty
Surgery Center of Beverly Hills, which is
fighting this reclassification of their tax
rate, is in fact operated by a company called
Symbion, Inc., which is a public company.
In their own SEC filings, they acknowledge
that "98 percent of their revenue comes
from facilities fees." As such, the City was
correct in taxing them at the same rate as
other commercial leasing businesses.
Physicians who perform medical services
at this and other surgery centers bill the
patient or the insurer separately for lheir
medical servfces. Not only are the taxes on
those services not being increased, those
physicians who perform their services in
Beverly Hills actually pay a much lower tax
than their counterparts in Los Angeles.
Unlike the physicians whose taxes are
not being increased, surgery centers gener-
ate millions of dollars in revenue, as in the
case of Specialty Surgery Center. As such,
surgery centers should be taxed like other
similar businesses.
Stephen P. Webb
Beverly Hills
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Page 2 • Beverly Hills Weekly
brief00
Physicians claim surgery
center tax reclassification
unjust
A blend of community medical profes-
sionals and residents filled a small confer-
ence room in Temple Emanuel Oct. 3 for
a town hall meeting to discuss tax reclas-
sification on surgery centers.
Beverly Hills resident Stella SalTaf,
whose husband James Khodabakhsh is
a managing partner at Specialty Surgery
Center, organized the meeting. She told
the audience she was hired by Specialty
Surgery Center to provide outreach and
educate the community.
The meeting came a few weeks prior to
art appeal hearing by Specialty Surgery
Center in regards to a 2005 audit where
City officials found the center was not
filing under the appropriate tax classifica-
tion and owed $5.5 million in back taxes,
penalties and interest.
The audit found that part of Specialty
Surgery Center's business is profession-
al and the other part is renting space
for a fee. They needed to register in
both classifications C and F, according
to Noel Marquis, assistant director of
Administrative Services.
Typically, surgery centers have filed
under Class C, which is intended for pro-
fessionals and semi professionals. These
businesses are taxed relative to the num-
Issue 680 • October 11 - October 17, 2012
Beverly Hills Weekly Inc.
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