Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance

committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).

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attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

F I S C A L I M P A C T R E P O R T

SPONSOR Park

ORIGINAL DATE

LAST UPDATED

2/01/07

2/5/07 HB 352/aHBIC

SHORT TITLE Boxing and Other Contest Gross Receipts

SB

ANALYST Schardin

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

FY09

($77.0)

Recurring General Fund

($52.0)

Recurring

Local

Governments

(Parenthesis ( ) Indicate Revenue Decreases)

Duplicates SB 330

SOURCES OF INFORMATION

LFC Files

Responses Received From

Economic Development Department (EDD)

Regulation and Licensing Department (RLD)

Taxation and Revenue Department (TRD)

SUMMARY

Synopsis of HBIC Amendment

The House Business and Industries Committee amendment to House Bill 352 restricts the

deduction created in the bill to receipts from boxing, wrestling or martial arts contests that occur

in New Mexico. This amendment addresses a technical concern that the original bill would have

applied to receipts from broadcasting pay-per-view events and other events that do not take place

in New Mexico.

Synopsis of Original Bill

House Bill 352 creates a new gross receipts tax deduction for receipts from producing or staging

a professional boxing, wrestling, or martial arts contest, including the receipts from ticket sales

and broadcasting.

House Bill 352/aHBIC – Page

2

The bill’s provisions will become effective on July 1, 2007.

FISCAL IMPLICATIONS

TRD’s fiscal impact estimate is based on information provided by the New Mexico Athletic

Commission (NMAC) on the amount promoters receive from selling the rights to broadcast

professional contests staged in New Mexico.

SIGNIFICANT ISSUES

This bill aims to bring additional boxing, wrestling and martial arts events to New Mexico.

Currently, NMAC competes with neighboring states and tribal entities to host such sporting

events in New Mexico. The receipts of tribal entities are not subject to taxation, so NMAC feels

this bill will level the playing field.

Currently, about half of these professional sporting events that occur in New Mexico are

regulated by the NMAC and about half occur at tribal facilities. NMAC reports that the share of

these events occurring at tribal facilities has grown in recent years.

LFC notes that while individual deductions from the gross receipts tax may have small fiscal

impacts, their cumulative effect significantly narrows the gross receipts tax base. Narrowing the

gross receipts tax base increases revenue volatility and requires a higher tax rate to generate the

same amount of revenue.

The bill will reduce local government gross receipts tax collections. Many of New Mexico’s

local governments are highly dependent on gross receipts tax revenue.

ADMINISTRATIVE IMPLICATIONS

The administrative impact on TRD will be minimal. Forms and instructions will be revised,

taxpayer education materials must be prepared, and personnel must be trained.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

House Bill 352 duplicates Senate Bill 330.

SS/sb:nt