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
SPONSOR: |
Altamirano |
DATE
TYPED: |
|
HB |
|
||
SHORT
TITLE: |
Gross
Receipts Exemption for Podiatrists |
SB |
478 |
||||
|
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)
Responses
Received From
TRD
SUMMARY
Synopsis
of Bill
The bill amends Section
7-9-77.1 NMSA 1978 to exchange the existing gross receipts tax deduction for
Medicare receipts of medical doctors and osteopaths for an exemption. The bill expands eligibility for the
exemption to 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
TRD notes that the fiscal
impact was derived using the 1997 Census of Healthcare Services in
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
CONFLICT
HB-440 provides a gross receipts deduction for
podiatrists.
TECHNICAL
ISSUES
TRD notes that
superficially, there are no fiscal implications from changing a deduction to an
exemption. However, it will make a
significant difference in tax reporting.
Deductions are required to be reported, exemptions are not. The
department would not be able to determine from a tax return the amount a
provider receives from Medicare payments.
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 tax base 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 the
health care industry grow more quickly than general revenue. Exempting this sector reduces the state’s
ability to generate adequate revenue from the gross receipts tax.