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.

 

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

 

 

 

SPONSOR:

Nunez

 

DATE TYPED:

2/28/03

 

HB

623/aHEC

 

SHORT TITLE:

Tax on Admission to Non-Athletic Events

 

SB

 

 

 

ANALYST:

  Smith                                         

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

 

 

 

 

(28.0)

(30.0)

Recurring

Youth Conservation Corps (EMNRD)

 

(41.0)

(45.0)

Recurring

State Park & Rec. Capital Improvement (EMNRD)

 

(206.0)

(225.0)

Recurring

Public Project Revolving Fund

 (New Mexico Finance Authority)

 

 

 

 

 

(Parenthesis ( ) Indicate Revenue Decreases)

 

SOURCES OF INFORMATION

 

Responses Received From

TRD

 

SUMMARY

 

     Synopsis of HEC Amendment

 

The House Education Committee amendment clarifies the amount of student association sponsorship.

 

     Synopsis of Original Bill

 

House Bill 623 amends Section 7-9-3.2 to exclude admissions to non-athletic special events sponsored by the student association of a post-secondary educational institution from the definition of governmental gross receipts (GGRT). 

 

FISCAL IMPLICATIONS

 

TRD notes that in fiscal year 2002, post-secondary institutions generated roughly $36 million in revenue from admissions to athletic and entertainment events.  This translated to more than $1.8 million in GGRT collections.   The provisions of this bill allow a non-athletic event sponsored by a student association to be excluded from the GGRT base.  Hence, a post-secondary institution could avoid GGRT on receipts from a concert, play or similar activity, simply by including the student association as a nominal “sponsor”.   Most of the GGRT revenue from post-secondary institutions is assumed to be derived from athletic event admissions fees, so the potential fiscal impact is limited.   The fiscal impact presented above assumes approximately $6 million will no longer be subject to GGRT. 

 

Governmental gross receipts tax revenue is distributed 75% to NMFA for the public project revolving fund, 15% to the Energy, Minerals and Natural Resources Department (EMNRD) for state park capital improvements, and 10% to EMNRD’s youth conservation corps program. 

 

OTHER SUBSTANTIVE ISSUES

 

·        Student associations are not considered government entities for the purpose of the governmental gross receipts tax.  Therefore, no governmental gross receipts tax is owed on receipts accruing to a student association.

·        Net receipts attributable to the GGRT totaled nearly $21 million in fiscal year 2002.   Most of the revenue is derived from utilities owned or operated by local governments. 

 

SS/sb/ls/njw :yr