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F I S C A L I M P A C T R E P O R T
SPONSOR Garcia, MP
DATE TYPED 2-21-2005 HB 1055
SHORT TITLE Grandparent Expenditure Tax Credit
SB
ANALYST Taylor
REVENUE
Estimated Revenue
Subsequent
Years Impact
Recurring
or Non-Rec
Fund
Affected
FY05
FY06
(3,000.0)
(6,000.0)
Similar Recurring
General Fund
(Parenthesis ( ) Indicate Revenue Decreases)
SOURCES OF INFORMATION
LFC Files
Taxation and Revenue Department (TRD)
SUMMARY
House Bill 1055 provides an income tax credit for certain expenditures made by grandparents or
great grand parents. The credit is equal to the taxpayer’s child care expenditures during the tax-
able year. Childcare expenditures are defined as cost incurred in providing food, clothing, medi-
cal care, and extra rent or utilities paid as the result of providing space for the child.
The credit may only be applied against New Mexico income taxes.
The provisions of the bill are applicable on or after January 1, 2005.
FISCAL IMPLICATIONS
TRD estimates that this credit will reduce general fund revenues by $6 million on a full-year ba-
sis. The estimate assumes an average credit of $3,000.0 and 2,000 claims. The FY05 impact is
half the full year impact because of the applicability date.
For comparison purposes, TRD also reported that credits already provided under current law
were claimed by approximately 5 thousand taxpayers and totaled $1.9 million as of tax year
2003.