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| SPONSOR: | J.G. Taylor | DATE TYPED: | 02/22/99 | HB | 634 | ||
| SHORT TITLE: | Hospital Gross Receipts Deduction | SB | |||||
| ANALYST: | Eaton | ||||||
| Subsequent
Years Impact |
Recurring
or Non-Rec |
Fund
Affected | ||
| FY99 | FY2000 | |||
| $ (5,200.0) | Recurring | General Fund | ||
(Parentheses ( ) Indicate Revenue Decreases)
SOURCES OF INFORMATION
Taxation and Revenue Department (TRD)
SUMMARY
Synopsis of Bill
This bill would amend Section 7-9-73.1NMSA 1978. The current statute provides for a fifty percent deduction of gross receipts taxes for hospitals licensed by the Department of Health. This bill would provide for a seventy-five percent deduction in fiscal year 2000, and one-hundred percent (exemption) starting in fiscal year 2001.
FISCAL IMPLICATIONS
The Taxation and Revenue Department (TRD) provides a range under which this proposed legislation may impact the general fund. The estimate provided in this report is a midpoint estimate based on the TRD estimate.
OTHER SUBSTANTIVE ISSUES
The Taxation and Revenue Department anticipates that this bill will have the largest relative impact on smaller communities/municipalities tax bases.
This bill has the potential to lower healthcare costs for the patient receiving care. For this to happen, the tax savings must be passed on from hospitals and insurance companies.
If the purpose of this bill is to pass tax savings onto the patient, a more direct approach may be appropriate. For example, the legislation could provide for an income tax credit to patients in an amount that is comparable to the gross receipts deduction proposed by this bill.
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