Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports if they are used for other purposes.

 

Current FIRs (in HTML & Adobe PDF formats) are available on the NM Legislative Website (legis.state.nm.us).  Adobe PDF versions include all attachments, whereas HTML versions may not.  Previously issued FIRs and attachments may also be obtained from the LFC in Suite 101 of the State Capitol Building North.

 

 

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

 

 

 

SPONSOR

SFC

DATE TYPED

2-16-2004

HB

 

 

SHORT TITLE

Gross Receipts on Certain Non-Athletic Events

SB

188/SFCS

 

 

ANALYST

Taylor

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY04

FY05

 

 

(37.0)

Recurring

Public Project Revolving Fund

 

 

(7.0)

Recurring

Youth Conservation Corps

 

 

(5.0)

Recurring

State Park & Rec Capital Improvement

 

 

(1.0)

Recurring

Office of Cultural Affairs

(Parenthesis ( ) Indicate Revenue Decreases)

 

SOURCES OF INFORMATION

LFC Files

 

Responses Received From

Taxation and Revenue Department

 

SUMMARY

 

The Senate Finance Committee substitute for Senate Bill 188 provides a gross receipts tax deduction for non-athletic event receipts held at a post-secondary educational institution venue that is within fifty miles of the state border and accommodates at least 2500 persons. 

 

Effective date:  July 1, 2004

 

FISCAL IMPLICATIONS

 

The TRD report estimates the bill will reduce governmental gross receipts revenues by about $50 thousand.  The loss is to the governmental gross receipts because TRD assumes that universities will restructure their transactions over time in order to take advantage of the gross receipts tax deduction.  In other words, they assume that the university will contract with entities not subject to the governmental gross receipts tax and thus avoid paying the governmental gross receipts tax.  They report that post graduate institutions generated $30 million in athletic and non-athletic events, which yielded about $1.5 million in governmental gross receipts revenues (5 percent of revenue).  They assume that $1 million of this was due to non-athletic events to arrive at a total loss in governmental gross receipts of $50 thousand, which is distributed among the various funds shown in the table above.  They show no impact in FY05, presumably because they expect behavior to adapt slowly.

 

The TRD analysis reports that while most of the events affected by the bill are likely to be held at New Mexico State University, events at Eastern New Mexico University, Western New Mexico University, San Juan College and New Mexico Junior College could qualify as well.  The assumption that the exclusion could apply to these schools explains the assumption regarding the size of the tax base being excluded.

 

ADMINISTRATIVE IMPLICATIONS

 

TRD reports that these changes can be implemented with existing resources.

 

BT/yr:dm