2023 New Mexico Statutes › Chapter 7 - Taxation › Article 9 - Gross Receipts and Compensating Tax › Section 7-9-77.1 - Deduction; gross receipts tax; certain medical and health care services.

A. Receipts of a health care practitioner or an association of health care practitioners from payments by the United States government, or any agency thereof, or from a medicare administrative contractor for medical and other health services provided by a health care practitioner to medicare beneficiaries pursuant to the provisions of Title 18 of the federal Social Security Act may be deducted from gross receipts.
B. Receipts of a hospice or nursing home from payments by the United States government, or any agency thereof, or from a medicare administrative contractor for medical and other health and palliative services provided by the hospice or nursing home to medicare beneficiaries pursuant to the provisions of Title 18 of the federal Social Security Act may be deducted from gross receipts.
C. Receipts of a health care practitioner or an association of health care practitioners from payments by a third-party administrator of the federal TRICARE program for medical and other health services provided by physicians and osteopathic physicians to covered beneficiaries may be deducted from gross receipts.
D. Receipts of a health care practitioner or an association of health care practitioners from payments by or on behalf of the Indian health service of the United States department of health and human services for medical and other health services provided by physicians and osteopathic physicians to covered beneficiaries may be deducted from gross receipts.
E. Receipts of a clinical laboratory from payments by the United States government, or any agency thereof, or from a medicare administrative contractor for medical services provided by the clinical laboratory to medicare beneficiaries pursuant to the provisions of Title 18 of the federal Social Security Act may be deducted from gross receipts.
F. Receipts of a home health agency from payments by the United States government, or any agency thereof, or from a medicare administrative contractor for medical, other health and palliative services provided by the home health agency to medicare beneficiaries pursuant to the provisions of Title 18 of the federal Social Security Act may be deducted from gross receipts.
G. Prior to July 1, 2032, receipts of a dialysis facility from payments by the United States government, or any agency thereof, or from a medicare administrative contractor for medical and other health services provided by the dialysis facility to medicare beneficiaries pursuant to the provisions of Title 18 of the federal Social Security Act may be deducted from gross receipts.
H. A taxpayer allowed a deduction pursuant to this section shall report the amount of the deduction separately in a manner required by the department. A taxpayer who has receipts that are deductible pursuant to this section and Section 7-9-93 NMSA 1978 shall deduct the receipts under this section prior to calculating the receipts that may be deducted pursuant to Section 7-9-93 NMSA 1978.
I. The department shall compile an annual report on the deductions created pursuant to this section that shall include the number of taxpayers that claimed each deduction, the aggregate amount of deductions claimed and any other information necessary to evaluate the effectiveness of the deductions. The department shall compile and present the annual reports to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the effectiveness and cost of the deductions and whether the deductions are providing a benefit to the state.
J. For the purposes of this section:
(1) "association of health care practitioners" means a corporation, unincorporated business entity or other legal entity organized by, owned by or employing one or more health care practitioners; provided that the entity is not:
(a) an organization granted exemption from the federal income tax by the United States commissioner of internal revenue as organizations described in Section 501(c)(3) of the United States Internal Revenue Code of 1986, as that section may be amended or renumbered; or
(b) a health maintenance organization, hospital, hospice, nursing home or an entity that is solely an outpatient facility or intermediate care facility licensed pursuant to the Public Health Act [Chapter 24, Article 1 NMSA 1978];
(2) "clinical laboratory" means a laboratory accredited pursuant to 42 USCA 263a;
(3) "dialysis facility" means a facility that provides outpatient maintenance dialysis services or home dialysis training and support services, including a facility considered by the federal centers for medicare and medicaid services to be an independent or hospital-based facility that includes a self-care dialysis unit that furnishes only self-dialysis services;
(4) "health care practitioner" means:
(a) an athletic trainer licensed pursuant to the Athletic Trainer Practice Act [Chapter 61, Article 14D NMSA 1978];
(b) an audiologist licensed pursuant to the Speech-Language Pathology, Audiology and Hearing Aid Dispensing Practices Act [Chapter 61, Article 14B NMSA 1978];
(c) a chiropractic physician licensed pursuant to the Chiropractic Physician Practice Act [Chapter 61, Article 4 NMSA 1978];
(d) a counselor or therapist practitioner licensed pursuant to the Counseling and Therapy Practice Act [Chapter 61, Article 9A NMSA 1978];
(e) a dentist licensed pursuant to the Dental Health Care Act [Chapter 61, Article 5A NMSA 1978];
(f) a doctor of oriental medicine licensed pursuant to the Acupuncture and Oriental Medicine Practice Act [Chapter 61, Article 14A NMSA 1978];
(g) an independent social worker licensed pursuant to the Social Work Practice Act [Chapter 61, Article 31 NMSA 1978];
(h) a massage therapist licensed pursuant to the Massage Therapy Practice Act [Chapter 61, Article 12C NMSA 1978];
(i) a naprapath licensed pursuant to the Naprapathic Practice Act [61-12F-1 to 61-12F-11 NMSA 1978];
(j) a nutritionist or dietitian licensed pursuant to the Nutrition and Dietetics Practice Act [61-7A-1 to 61-7A-15 NMSA 1978];
(k) an occupational therapist licensed pursuant to the Occupational Therapy Act [Chapter 61, Article 12A NMSA 1978];
(l) an optometrist licensed pursuant to the Optometry Act [Chapter 61, Article 2 NMSA 1978];
(m) an osteopathic physician licensed pursuant to the Medical Practice Act [Chapter 61, Article 6 NMSA 1978];
(n) a pharmacist licensed pursuant to the Pharmacy Act [Chapter 61, Article 11 NMSA 1978];
(o) a physical therapist licensed pursuant to the Physical Therapy Act [61-12D-1 to 61-12D-19 NMSA 1978];
(p) a physician licensed pursuant to the Medical Practice Act [Chapter 61, Article 6 NMSA 1978];
(q) a podiatrist licensed pursuant to the Podiatry Act [Chapter 61, Article 8 NMSA 1978];
(r) a psychologist licensed pursuant to the Professional Psychologist Act [Chapter 61, Article 9 NMSA 1978];
(s) a radiologic technologist licensed pursuant to the Medical Imaging and Radiation Therapy Health and Safety Act [Chapter 61, Article 14E NMSA 1978];
(t) a registered nurse licensed pursuant to the Nursing Practice Act [Chapter 61, Article 3 NMSA 1978];
(u) a respiratory care practitioner licensed pursuant to the Respiratory Care Act [Chapter 61, Article 12B NMSA 1978]; and
(v) a speech-language pathologist licensed pursuant to the Speech-Language Pathology, Audiology and Hearing Aid Dispensing Practices Act [Chapter 61, Article 14B NMSA 1978];
(5) "home health agency" means a for-profit entity that is licensed by the department of health and certified by the federal centers for medicare and medicaid services as a home health agency and certified to provide medicare services;
(6) "hospice" means a for-profit entity licensed by the department of health as a hospice and certified to provide medicare services;
(7) "medicare administrative contractor" means a third-party administrator operating under contract with the federal centers for medicare and medicaid services to process medicare claims and make medicare fee-for-service payments for medicare fee-for-service beneficiaries;
(8) "nursing home" means a for-profit entity licensed by the department of health as a nursing home and certified to provide medicare services; and
(9) "TRICARE program" means the program defined in 10 U.S.C. 1072(7).
History:
1978 Comp., § 7-9-77.1, enacted by Laws 1998, ch. 96, § 1; 2000 (2nd S.S.), ch. 16, § 1; 2003, ch. 350, § 1; 2003, ch. 351, § 1; 2005, ch. 91, § 1; 2007, ch. 361, § 4; 2014, ch. 56, § 1; 2016 (2nd S.S.), ch. 3, § 4; 2021, ch. 54, § 1; 2021, ch. 65, § 24; 2022, ch. 43, § 1; 2022, ch. 49, § 1.
ANNOTATIONS
Cross references.
— For the provisions of Title XVIII of the federal Social Security Act,
see
42 U.S.C. § 1395 et seq.
2022 Multiple Amendments.
— Laws 2022, ch. 43, § 1 and Laws 2022, ch. 49, § 1, both effective July 1, 2022, enacted different amendments to this section that can be reconciled. Pursuant to 12-1-8 NMSA 1978, Laws 2022, ch. 49, § 1 as the last act signed by the governor is set out above and incorporates both amendments. The amendments enacted by Laws 2022, ch. 43, § 1 and Laws 2022, ch. 49, § 1 are described below. To view the session laws in their entirety,
see
the 2022 session laws on
NMOneSource.com
.
The nature of the difference between the amendments is that Laws 2022, ch. 43, § 1, provided that receipts from payments of a medicare administrative contractor are eligible for a gross receipts tax deduction for certain medical and health care services, and Laws 2022, ch. 49, § 1, extended a gross receipts tax deduction for dialysis facilities, and revised the definition of "dialysis facility".
Laws 2022, ch. 49, § 1,
effective July 1, 2022, extended a gross receipts tax deduction for dialysis facilities, and revised the definition of "dialysis facility"; in Subsection F, deleted "Prior to July 1, 2024, receipts" and added "Prior to July 1, 2032, receipts"; and in Subsection I, Paragraph I(3), deleted "an end-stage renal disease facility as defined pursuant to 42 C.F.R. 405.2102" and added "a facility that provides outpatient maintenance dialysis services or home dialysis training and support services, including a facility considered by the federal centers for medicare and medicaid services to be an independent or hospital-based facility that includes a self-care dialysis unit that furnishes only self-dialysis services".
Laws 2022, ch. 43, § 1,
effective July 1, 2022, provided that receipts from payments of a medicare administrative contractor are eligible for a gross receipts tax deduction for certain medical and health care services; in Subsection A, after "any agency thereof", added "or from a medicare administrative contractor", after "for", deleted "provision of", after "other health services", added "provided", and after "by a health care practitioner", deleted "or of medical or other health and palliative services by hospices or nursing homes"; added a new Subsection B and redesignated former Subsections B through I as Subsections C through J, respectively; in Subsections E, F, and G, after "or any agency thereof", added "or from a medicare administrative contractor"; in Subsection I, after "number of taxpayers", deleted "approved by the department to receive" and added "that claimed", and after "aggregate amount of deductions", deleted "approved" and added "claimed"; and in Subsection J, added a new Paragraph J(7) and redesignated former Paragraphs (7) and (8) as Paragraphs J(8) and J(9), respectively.
2021 Amendments.
— Laws 2021, ch. 65, § 24, effective July 1, 2021, provided that associations of health care practitioners are eligible to claim certain gross receipts tax deductions, and defined "association of health care practitioners" for purposes of this section; in Subsection A, after "Receipts of a health care practitioner", added "or an association of health care practitioners"; in Subsection B, after "Receipts of a health care practitioner", added "or an association of health care practitioners"; in Subsection C, after "Receipts of a health care practitioner", added "or an association of health care practitioners"; and in Subsection I, added a new Paragraph I(1) and redesignated former Paragraphs I(1) through I(7) as Paragraphs I(2) through I(8), respectively.
Laws 2021, ch. 54, § 1, effective June 18, 2021, removed osteopathic physicians licensed pursuant to the Osteopathic Medicine Act from the definition of "health care practitioner", and added osteopathic physicians licensed pursuant to the Medical Practice Act to the definition of "health care practitioner"; and in Subsection I, Subparagraph I(3)(m), after "pursuant to the", deleted "Osteopathic Medicine" and added "Medical Practice".
The 2016 (2nd S.S.) amendment,
effective November 1, 2016, clarified the type of health care provider that may take certain gross receipts tax deductions for medical and health care services; in Subsection A, after "Receipts", added "of a health care practitioner", after "health services by", deleted "medical doctors, osteopathic physicians, doctors of oriental medicine, athletic trainers, chiropractic physicians, counselor and therapist practitioners, dentists, massage therapists, naprapaths, nurses, nutritionists, dietitians, occupational therapists, optometrists, pharmacists, physical therapists, psychologists, radiologic technologists, respiratory care practitioners, audiologists, speech-language pathologists, social workers and podiatrists" and added "a health care practitioner", and after "or of medical", added "or"; in Subsection B, after "Receipts", added "of a health care practitioner"; in Subsection C, after "Receipts", added "of a health care practitioner"; in Subsection D, after "Receipts", added "of a clinical laboratory"; in Subsection E, after "Receipts", added "of a home health agency"; in Subsection F, after "receipts", added "of a dialysis facility", after "services provided by a", deleted "a" and added "the", after "deducted from gross receipts", deleted "according to the following schedule:" and deleted Paragraphs F(1) through F(3), relating to deductions from gross receipts; in Subsection G, after the first sentence, added the second sentence; in Subsection H, after "evaluate the effectiveness of the deductions.", deleted "Beginning in 2020 and every five years thereafter that this section is in effect"; in Subsection I, deleted Paragraphs I(1) and I(2) and redesignated former Paragraph I(3) as Paragraph I(1); deleted Paragraphs I(4) and I(5) and redesignated former Paragraph I(6) as Paragraph I(2), deleted Paragraph I(7), added new Paragraph I(3) and redesignated former Paragraphs I(8) and I(9) as Paragraph I(4) and I(5), respectively, deleted Paragraphs I(10) through I(13) and redesignated former Paragraph I(14) as Paragraph I(6), deleted Paragraphs I(15) through I(26) and redesignated former Paragraph I(27) as Paragraph I(7).
The 2014 amendment,
effective July 1, 2014, provided a deduction from gross receipts of payments for services rendered by dialysis facilities; added Subsections F, G and H; and in Subsection I, added Paragraph (6).
The 2007 amendment,
effective July 1, 2007, eliminated the schedules of deductible receipts for the years 2003 through 2005; expanded the list of health care providers who may deduct receipts from the United States government and its agencies; added Subsection C; and added Paragraphs (1), (2), (4) through (6), (9), (11), (12), (14), (15), and (17) through (25) of Subsection F.
The 2005 amendment,
effective June 17, 2005, added Subsection C to provide a deduction for certain payments by the United States for medical services provided by a clinical laboratory; added Subsection D to provide a deduction for certain payments by the United States for medical, other health and palliative services provided to a home health agency; requireed that "hospice" be certified to provide medicare services; and in Subsection E, defined "clinical laboratory", "home health agency" and "nursing home".
The 2003 amendment,
effective July 1, 2003, in Subsection A, substituted "osteopathic physicians and podiatrists" for "osteopaths"; redesignated former Subsection B as C and added present Subsection B; in Subsection C, rewrote Paragraph C(2) and added Paragraphs C(3) and (4).
The 2000 amendment,
effective July 1, 2000, deleted former Subsections A & B, concerning deductions from gross receipts from specific dates, and redesignated the remaining subsections accordingly; in present Subsection A, deleted "on or after July 1, 2000" following "Receipts" and inserted "or of medical, other health and palliative services by a hospice"; and in present Subsection B, added Paragraph (1) and designated the remaining section text as Paragraph (2).