Group Health Cooperative of Puget Sound, Inc. v. Department of Revenue

Group Health Cooperative, a nonprofit health maintenance organization, provides comprehensive health care services on a prepaid basis to its members through its medical staff and facilities. Group Health was audited and deductions disallowed. It seeks a refund of business and occupation taxes based on a deduction allowed public entities for health or social welfare services rendered, pursuant to RCW 82.04.4297.

The first challenge to Group Health is that its executives are not paid salaries comparable to salaries paid like positions in the public service. The second claim by the State is that…