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

 

 

 

SPONSOR:

Robinson

 

DATE TYPED:

2/24/03

 

HB

 

 

SHORT TITLE:

Professional Promotion Gross Receipts

 

SB

700

 

 

ANALYST:

Smith

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

 

 

 

 

(60.0)

(65.0)

Recurring

General Fund

 

(39.0)

(42.0)

Recurring

Local Funds

 

*

*

Recurring

Athletic Commission

 

 

 

 

 

(Parenthesis ( ) Indicate Revenue Decreases)

 

SOURCES OF INFORMATION

 

Responses Received From

 

TRD

 

SUMMARY

 

     Synopsis of Bill

 

Senate Bill 700 would exempt receipts from promoting live professional boxing contests currently subject to the privilege tax imposed by Section 60-2A-23 NMSA 1978 (Privilege Tax on Promotions).  The measure would also amend Section 60-2A-23 to increase the privilege tax imposed on promoters from four to five percent of total gross receipts from professional contests conducted live in New Mexico. The measure would, in addition, limit the five percent tax imposed for the privilege of exhibiting live professional contests on closed-circuit telecasts or motion pictures by preventing the tax from being imposed on more than $1 million in gross receipts.

 

FISCAL IMPLICATIONS

 

Gross receipts tax impacts of this proposal are as shown.  TRD did not estimate fiscal impacts associated with amendments to the privilege tax. The Athletic Commission of the New Mexico Regulation and Licensing Department reports that collections from the 4% privilege tax are quite volatile, but average about $70 thousand per year.  Hence this estimate assumes that promoters will generate roughly $1.75 million in taxable gross receipts in fiscal year 2004. 

 

OTHER SUBSTANTIVE ISSUES

 

TRD notes that the “privilege tax” of 4% of gross receipts from professional athletic competitions is appropriated to the New Mexico Athletic Commission, and is used by that commission in regulating and licensing the industry.  Thus, the 4% privilege tax may be considered a cost of doing business as a promoter, not a general tax. The gross receipts tax, simultaneously imposed on professional athletic competitions is the contribution of the activity to the general support of government services, including public schools, higher education, courts and corrections, among other state and local government services.

 

SS/njw