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

 

 

 

SPONSOR:

Smith

 

DATE TYPED:

2/17/03

 

HB

 

 

SHORT TITLE:

Hospital Medical Services Gross Receipts

 

SB

615

 

 

ANALYST:

Smith

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

 

 

 

 

(2,100.0)

(2,300.0)

Recurring

General Fund

 

(1,410.00)

(1,540.0)

Recurring

Local Governments

 

 

 

 

 

(Parenthesis ( ) Indicate Revenue Decreases)

 

SOURCES OF INFORMATION

 

Responses Received From

Taxation and Revenue Department (TRD)

 

SUMMARY

 

     Synopsis of Bill

 

Senate Bill 615 amends Section 7-9-77.1 NMSA 1978 to provide a gross receipts tax deduction to hospitals for receipts derived from Medicare payments.  To qualify for the deduction, hospitals must be licensed by the Department of Health. 

 

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. 

 

The bill also makes a minor change in terminology from “osteopaths” to “osteopathic physicians”.  

 

FISCAL IMPLICATIONS

 

TRD relied on data provided by the Department of Health’s Licensing and Certification Bureau.  Data from the 1997 Economic Census of Health Care and Social Assistance and the department’s “Analysis of Gross Receipts by Standard Industrial Classification” was used to derive a taxable gross receipts base of $284 million for FY 2004.  Data from the Centers for Medicare and Medicaid Services (formerly the Health Care Financing Administration) indicates that Medicare payments account for approximately 22.4% of New Mexico hospital receipts.  Thus the fiscal impact assumes $63.5 million dollars of Medicare receipts would qualify for deduction. 

 

OTHER SUBSTANTIVE ISSUES

 

TRD notes that 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 over time. 

 

SS/sb