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

 

 

 

SPONSOR:

Papen

 

DATE TYPED:

2/25/03

 

HB

 

 

SHORT TITLE:

Tax on Admission to Non-Athletic Events

 

SB

766

 

 

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)

 

Duplicates HB623

 

SOURCES OF INFORMATION

 

Responses Received From

 

TRD

 

SUMMARY

 

     Synopsis of Bill

 

Senate Bill 766 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