NOTE:  As provided in LFC policy, this report is intended only for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used for other purposes.

 

The most recent FIR version (in HTML & Adobe PDF formats) is available on the Legislative Website.  The Adobe PDF version includes all attachments, whereas the HTML version does not.  Previously issued FIRs and 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:

Sandoval

 

DATE TYPED:

2/6/03

 

HB

440

 

SHORT TITLE:

Gross Receipts Deduction for Podiatrists

 

SB

 

 

 

ANALYST:

Smith

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

 

 

 

 

(55.0)

(60.0)

Recurring

General Fund

 

(46.0)

(50.0)

Recurring

Local Governments

 

 

 

 

 

(Parenthesis ( ) Indicate Revenue Decreases)

 

SOURCES OF INFORMATION

 

Responses Received From

 

TRD

 

SUMMARY

 

     Synopsis of Bill

 

House Bill 440 amends Section 7-9-77.1 NMSA 1978 to provide a gross receipts tax deduction for Medicare receipts of podiatrists licensed pursuant to the provisions of the Podiatry Act. 

 

The section is further amended to clarify that medical doctors licensed pursuant to Section 66-6-13 (Licensure by Endorsement) and osteopaths licensed pursuant to Section 66-10-12 (Licensure without Examination) qualify for the current Medicare deduction. 

 

A minor change in terminology from “osteopaths” to “osteopathic physicians” is also made. 

 

FISCAL IMPLICATIONS

 

The fiscal impact was derived using the 1997 Census of Healthcare Services in New Mexico, the Department’s “Analysis of Gross Receipts by Standard Industrial Classification” (Report-80), “Combined Reporting System-Warrant Distribution Summary” (Report 490B), state Medicare and Medicaid expenditure data from the Centers for Medicare and Medicaid Services (CMMS).  

 

Podiatrists are expected to generate revenues of nearly $12 million and pay approximately $730 thousand in state and local gross receipts taxes in the absence of this legislation. This estimate assumes approximately 15% of their receipts are derived from Medicare payments.      

 

There are no fiscal implications of the revised licensing provisions. 

 

TRD has provided the following table detailing the various health care practitioner deductions in current proposals.

 

Proposals Affecting Gross Receipts Taxation of Health Providers—2003 Regular Legislative Session

Bill Number

Description

FY 2004

General Fund Impact

FY 2004

Local Impact

HB-113

Makes unenforceable any provision in a contract between a healthcare provider and a health plan that prohibits the provider from passing the gross receipts tax on to the plan

No fiscal Impact

No Fiscal Impact

HB-163

Gross receipts deduction for physicians licensed pursuant to Medical Practice Act

(20,700)

(18,100)

HB-361

Phased gross receipts deduction for health practitioners’ commercial portion of managed care contract

(3,600)

(3,150)

HB-440

Gross receipts deduction for podiatrists

(55)

(46)

HB-441

Clinical laboratory gross receipts deduction (SB-213 duplicate)

(495)

(425)

HB-473

Gross receipts exemption for nursing homes (SB-407 duplicate)

(3,700)

(3,300)

 

 

 

 

SB-35

Gross receipts deduction for health practitioners’ commercial portion of managed care contract (SB-63 duplicate)

(23,100)

(12,000)

SB-63

Gross receipts deduction for health practitioners’ commercial portion of managed care contract (SB-35 duplicate)

(23,100)

(12,000)

SB-158

Gross receipts deduction for licensed health practitioners and food; local government offsets; increase state gross receipts tax rate

(1,500)

0

SB-166

Gross receipts deduction for nursing home Medicare receipts

(615)

(415)

SB-213

Clinical laboratory gross receipts deduction (HB-441 duplicate)

(495)

(425)

SB-407

Gross receipts exemption for nursing homes (HB-473 duplicate)

(3,700)

(3,300)

 

 

 

 

 

OTHER SUBSTANTIVE ISSUES

 

TRD makes the following tax policy arguments:

 

·       This continues a trend over the last decade of removing medical and hospital services from the gross receipts base.  A broad base helps to limit the tax rate, thus cutting the base by an industry this large may shift a noticeable amount of tax burden to remaining taxpayers.

 

·       In addition to adding an element of stability to the gross receipts tax, receipts of health practitioners grow more quickly than general revenue.  Exempting this sector reduces the state’s ability to generate adequate revenue from the gross receipts tax. 

 

SS/njw:sb