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| SPONSOR: | Kidd | DATE TYPED: | 02/14/99 | HB | |||
| SHORT TITLE: | Podiatric Services Gross Receipts Reduction | SB | 70 | ||||
| ANALYST: | Eaton | ||||||
| Subsequent
Years Impact |
Recurring
or Non-Rec |
Fund
Affected | ||
| FY99 | FY2000 | |||
| $ (211.1) | Recurring | General Fund | ||
| $ (137.8) | Recurring | Counties/Munic. | ||
(Parenthesis ( ) Indicate Revenue Decreases)
SOURCES OF INFORMATION
Taxation and Revenue Department (TRD)
SUMMARY
Synopsis of Bill
This bill would provide a gross receipts deduction on medicare payments paid by the United States government or its agencies to podiatrists for medicare eligible services rendered pursuant to Title 18 of the federal Social Security Act.
FISCAL IMPLICATIONS
There are approximately fifty-four podiatrists practicing in the state of New Mexico. The Taxation and Revenue Department (TRD) estimates a $211.1 impact to the general fund and a $137.8 impact to local governments.
ADMINISTRATIVE IMPLICATIONS
The Taxation and Revenue Department (TRD) reports that training auditors on the intricacies of the applicable federal statutes (42 U.S.C.A 1395x(s)) and their references will be required.
OTHER SUBSTANTIVE ISSUES
This proposed legislation would extend gross receipts deduction to another non-physician medical profession. Currently this group of practitioners is reimbursed by the federal government for Medicare eligible treatments made with the exception of gross receipts taxes paid on those services. From a tax standpoint, this legislation would treat podiatrists the same as medical doctors.
The Taxation and Revenue Department (TRD) warns that this legislation may encourage other non-physician medical professional practitioners to seek this type of exemption. To the extent they are successful, the amount of gross receipts tax revenues, as well as the stability and accuracy of state revenue forecasts, will diminish.
To the extent that gross receipts tax exemptions proliferate, the local revenues generated by gross receipt taxes will also diminish and subsequently threaten to lower local bond ratings. Lower bond ratings translates into higher local bond prices. Higher bond prices increase the borrowing price and thus increases the revenue (taxes) necessary to make payments on the bonds.
POSSIBLE QUESTIONS
What would be the fiscal impact if all non-physician medical practitioners in New Mexico were eligible to take a similar gross receipts deduction?
JBE/gm