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

 

 

 

SPONSOR:

Saavedra

 

DATE TYPED:

2/25/03

 

HB

932

 

SHORT TITLE:

Athletic Competition Gross Receipts

 

SB

 

 

 

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

 

 

 

 

 

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

 

Responses Received From

 

TRD

 

SUMMARY

 

     Synopsis of Bill

 

House Bill 932 would allow a deduction for receipts from promoting live professional boxing contests currently subject to the privilege tax imposed by Section 60-2A-23 NMSA 1978. 

 

FISCAL IMPLICATIONS

 

TRD relied on the Athletic Commission of the New Mexico Regulation and Licensing Department. They reported that collections from the 4% privilege tax are quite volatile, but average about $70 thousand per year.    Accordingly, this estimate assumes that promoters will generate roughly $1.75 million in taxable gross receipts in fiscal year 2004. 

 

RELATIONSHIP

 

Senate Bill 700 provides a gross receipts tax exemption for receipts of a promoter from a professional contest subject to the privilege tax on promotions. 

 

OTHER SUBSTANTIVE ISSUES

 

TRD points out 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