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F I S C A L I M P A C T R E P O R T
SPONSOR Marquardt
DATE TYPED 2/19/05
HB 894
SHORT TITLE Range and Test Facility Gross Receipts
SB
ANALYST Taylor
REVENUE
Estimated Revenue
Subsequent
Years Impact
Recurring
or Non-Rec
Fund
Affected
FY05
FY06
(825.0)
(3,300.0)
Similar Recurring
General Fund
(550.0)
(2,200.0)
Similar Recurring Local Governments
(Parenthesis ( ) Indicate Revenue Decreases)
Relates to HB 375, HB 930, SB 566
SOURCES OF INFORMATION
LFC Files
Taxation and Revenue Department
White Sands Missile Range
SUMMARY
House Bill 894 provides a gross receipts tax deduction for research, development, testing and
evaluation services performed at a major range and test facility base in New Mexico for U.S. de-
partment of defense programs.
The bill carries an emergency clause, making provisions applicable upon signature by the gover-
nor.
FISCAL IMPLICATIONS
The Taxation and Revenue Department provided information from the White Sands Missile
range reporting that the value of research, development, testing and evaluation services subject to
gross receipts tax is approximately $85 million. Multiplying the $85 million tax base by a 6.5
percent gross receipts tax rate implies a $5.5 million revenue loss. Sixty percent of this, or $3.3
million, would affect the general fund, and the remaining $2.2 million affecting local govern-
ments’ revenues. These are the full-year (FY06) impacts reported. The FY05 impacts reflect the