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| SPONSOR: | Silva | DATE TYPED: | 02/27/01 | HB | 745 | ||
| SHORT TITLE: | Gross Receipts Tax Credit for Doctors | SB | |||||
| ANALYST: | Eaton | ||||||
| Subsequent
Years Impact |
Recurring
or Non-Rec |
Fund
Affected | ||
| FY01 | FY02 | |||
| $ (42,000.0) | $ (42,700.0) | Recurring | General Fund | |
(Parenthesis ( ) Indicate Revenue Decreases)
SOURCES OF INFORMATION
Taxation and Revenue Department (TRD)
SUMMARY
Synopsis of Bill
The bill would authorize a personal and corporate income tax credit for gross receipts taxes paid on receipts from the provision of medical and other health services provided by physicians. The credit claimed can be for both state and local option gross receipts taxes. Pass-through entities must allocate the amount by ownership. Physicians include those doctors licensed to practice pursuant to the Medical Practice Act or a person licensed as an osteopathic physician.
Significant Issues
The bill reflects an alternative to the numerous other bills to address gross receipts taxes and the medical industry. The bill would hold local governments harmless from the fiscal impacts.
FISCAL IMPLICATIONS
The Taxation and Revenue Department (TRD) estimates the bill would reduce recurring general fund revenue by $42,000.0 in FY02 and $42,700.0 in FY03, respectively. Note that occupation is not stated on the New Mexico personal income tax forms; however, the estimate assumes physicians are mostly married and mostly in the above $75,000 taxable income category.
ADMINISTRATIVE IMPLICATIONS
Minimal.
OTHER SUBSTANTIVE ISSUES
The Taxation and Revenue Department (TRD) notes that this bill could result in a double-dip as currently drafted. The attached TRD analysis illustrates this issue. Effectively by reducing the deduction authorized in this bill to 50 percent through an amendment, the gross receipts tax issue on the medical industry could be addressed. Simultaneously, such an amendment would reduce the bill's fiscal impact by 50 percent.
JBE/ar
Attachment