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

SPONSOR Taylor, J.

ORIGINAL DATE

LAST UPDATED

1/31/07

3/01/07 HB

SHORT TITLE Boxing & Other Contest Gross Receipts

SB 330/aSCORC

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 HB 352

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 SCORC Amendment

The Senate Corporations and Transportation Committee amendment to Senate Bill 330 clarifies

that the proposed deduction will only apply to contests taking place in New Mexico. This ensures

the deduction will not apply to receipts from pay-per-view events that occur elsewhere but are

broadcast in New Mexico.

Synopsis of Original Bill

Senate Bill 330 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.

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

Senate Bill 330/aSCORC – Page

2

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

Senate Bill 330 duplicates House Bill 352.

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