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F I S C A L I M P A C T R E P O R T
SPONSOR Silva
DATE TYPED 2-10-2005 HB 423
SHORT TITLE Federal Research and Development Gross Receipts SB
ANALYST Taylor
REVENUE
Estimated Revenue
Subsequent
Years Impact
Recurring
or Non-Rec
Fund
Affected
FY05
FY06
(14,200)
Similar
Recurring
General Fund
(9,500)
Similar
Recurring Local Governments
(Parenthesis ( ) Indicate Revenue Decreases)
Relates to
SOURCES OF INFORMATION
LFC Files
Taxation and Revenue Department (TRD)
SUMMARY
House Bill 423 makes the following changes gross receipts tax and compensating tax provisions
governing research and development services sold pursuant to grants or contracts with the U.S.
Government:
1.
The compensating tax deduction for test articles upon which research or testing is con-
ducted in New Mexico is expanded from department of defense contracts to all federal
government contracts. Also the definition of test articles is expanded to include tangible
personal property or intangible personal property used for research or testing that is con-
sumed as a result of the research or testing.
2.
A new gross receipts tax deduction is provided for research and development gross re-
ceipts.
3.
A new gross receipts tax deduction is provided for tangible personal property used for re-
search and development services.
4.
The current aero space services deduction is repealed.
The bill carries an effective date of July 1, 2005.