HB 2 — TAX, FUND & DISTRIBUTION CHANGES

and (3) one percent to the cultural affairs department for capital improvements at state museums and monuments administered by the cultural affairs department.

AThe distributionstate pursuantpledges to Sectionand 7-1-6.1agrees NMSAwith 1978the shallholders beof made]any (2)bonds twenty-fouror percentnotes toissued by the New Mexico finance authority or by the energy, minerals and natural resources department [inand anpayable amountfrom equalthe net receipts attributable to twenty-fourthe percentgovernmental gross receipts tax distributed to the New Mexico finance authority or the energy, minerals and natural resources department pursuant to this section that the state will not limit, reduce or alter the distribution of the net receipts attributable to the governmental gross receipts tax];tax to the New Mexico finance authority or the energy, minerals and natural resources department or limit, reduce or alter the rate of imposition of the governmental gross receipts tax until the bonds or notes together with the interest thereon are fully met and discharged.

providedThe thatNew forty-oneMexico andfinance eauthority eand 17 two-thirds percent of the distribution is appropriated to the e e n d 18 energy, minerals and natural resources department toare implementauthorized =to =include lthis ]pledge 19 the provisions of the New Mexico Youth Conservation Corps Act a l r i 20 and fifty-eightagreement and one-third percent of the distribution is t e a t appropriated to the energy, minerals and natural resources m m 21 e d r e 22 department for state parkin andany recreationagreement areawith capital c e r c 23 improvements, including the costsholders of planning,the engineering,bonds eor anotes." nSECTION b6. 24 design, construction, renovation, repair, equipment and u [ furnishings;

andSection .208616.67-1-6.43 -NMSA 81978 -(being [C.Laws 2003, Chapter 86, Section 1, as amended) is amended to read:

AHB distribution2 pursuant"7-1-6.43. to Section 7-1-6.1 NMSA 1978 shall be made] (3) one percent to the [office of] cultural affairs [in an amount equal to one percent of the net receipts attributable to the governmental gross receipts tax] department 6 for capital improvements at state museums and monuments administered by the [office of ] cultural affairs department.

[D.]DISTRIBUTION--LEGISLATIVE B.RETIREMENT FUND.-- Page 8 A.

TheBeginning stateon pledgesJuly to1, and2019, agreesa withdistribution thepursuant holdersto ofSection any7-1-6.1 bondsNMSA or1978 notes issued by the New Mexico finance authority or by the energy, minerals and natural resources department and payable from the net receipts attributable to the governmentalamount grossof receipts tax distributeddeducted pursuant to the NewOil Mexicoand financeGas authorityProceeds orand thePass-Through energy,Entity mineralsWithholding andTax naturalAct resourcesshall departmentbe pursuantmade to this section that the statelegislative willretirement notfund limit,in reduce or alter the distributionamount of theseventy-five netthousand receiptsdollars attributable($75,000) toor, theif governmentallarger, grossin receiptsan taxamount equal to eone-twelfth eof 17 the Newamount Mexiconecessary financeto authoritypay orout the energy,retirement mineralsbenefits anddue eunder estate nlegislator dmember 18coverage naturalplan resources2 departmentand orParagraph limit,(2) reduceof orSubsection alterC the rate = = l ] 19 of impositionSection of10-11-41 theNMSA governmental1978 grossfor receipts tax until the asucceeding lcalendar ryear. i 20 bonds or notes together with the interest thereon are fully met t e a t and discharged.

TheB. New Mexico finance authority and the m m 21 e d r e 22 energy, minerals and natural resources department are c e r c 23 authorized to include this pledge and agreement of the state in e a n b 24 any agreement with the holders of the bonds or notes." u [ SECTION 6.

SectionIn 7-1-6.43regard NMSAto 1978the (beingdistribution Lawsto 2003,the .208616.6legislative -retirement 9fund, -in ChapterDecember 86,2003 Sectionand 1,in aseach amended)December isthereafter, amendedexcept toin read:2017, the public employees retirement association, with the assistance of the legislative council service, shall determine the amount of retirement benefits for the succeeding calendar year.

"7-1-6.43.If the monthly average exceeds seventy-five thousand dollars ($75,000), the association shall immediately notify the department of the average amount." SECTION 7.

DISTRIBUTION--[TO ] JUDICIAL RETIREMENT FUND AND MAGISTRATE RETIREMENT FUND--LEGISLATIVE RETIREMENT FUND.-- A.

A distribution pursuant to Section 7-1-6.1 NMSA 1978 from the net receipts attributable to the amount of tax deducted pursuant to the Oil and Gas Proceeds and Pass-Through Entity Withholding Tax Act shall be made:

(1) beginning July 1, 2019 and prior to July 1, 2022, to the:

(a) judicial retirement fund, in the amount of fifty-five thousand one hundred twenty-five dollars ($55,125);

and (b) magistrate retirement fund, in the amount of nineteen thousand eight hundred seventy-five dollars ($19,875);

and (2) on and after July 1, 2022, to the e e 17 legislative retirement fund in [an ] the amount equal to e e n d 18 seventy-five thousand dollars ($75,000) or, if larger, in an = = l ] 19 amount equal to one-twelfth of the amount necessary to pay out a l r i 20 the retirement benefits due under state legislator member t e a t coverage plan 2 and Paragraph (2) of Subsection C of Section m m 21 e d r e 22 10-11-41 NMSA 1978 for the succeeding calendar year.

c e r c 23 B.

In regard to the distribution to the legislative e a n b 24 retirement fund, in December [2003] 2021 and in each December u [ thereafter, the public employees retirement association, with .208616.6 - 10 - the assistance of the legislative council service, shall determine the amount of [those ] retirement benefits for the succeeding calendar year.

If the monthly average exceeds seventy-five thousand dollars ($75,000), the association shall ] immediately notify the department of the average [notify amount.

[That average amount shall be the amount distributed pursuant to Subsection A of this section as of the end of each month of the twelve consecutive months beginning with the December in which the determination was made.]" SECTION 7.

SECRETARY MAY DETERMINE WHERE CERTAIN GROSS RECEIPTS ARE TO BE REPORTED--PLACE OF BUSINESS FOR HB 2 CONSTRUCTION PROJECTS, [AND ] CERTAIN REAL PROPERTY SALES AND SALES OFPage OUT-9 OF-STATEOF OUT-OF-STATE VENDORS.-- A.

By regulation, the secretary may require any e e 17 person maintaining one or more places of business to report the e e n d 18 person's taxable gross receipts and deductions for each = = l ] 19 municipality or county or area within an Indian reservation or a l r i 20 pueblo grant in which the person maintains a place of business.

t e a t B.

For persons engaged in the construction m m 21 e d r e 22 business, the place where the construction project is performed c e r c 23 is a "place of business", and all receipts from that project e a n b 24 are to be reported from that place of business.

u [ C.

The secretary may, by regulation, also require .208616.6 - 11 - any person maintaining a business outside the boundaries of a municipality on land owned by that municipality to report the person's taxable gross receipts for that municipality.

Section 7-1-29 NMSA 1978 (being Laws 1965, HB 2 Chapter 248, Section 31, as amended) is amended to read:

Page 10 "7-1-29.

In response to a claim for refund, credit or rebate made as provided in Section 7-1-26 NMSA 1978, but before e e 17 a court acquires jurisdiction of the matter, the secretary or e e n d 18 the secretary's delegate may authorize payment to a person in = = l ] 19 the amount of the credit or rebate claimed or refund an a l r i 20 overpayment of tax determined by the secretary or the t e a t secretary's delegate to have been erroneously made by the m m 21 e d r e 22 person, together with allowable interest.

A payment of a c e r c 23 credit rebate claimed or a refund of tax and interest e a n b 24 erroneously paid amounting to twenty thousand dollars ($20,000) u [ or more shall be made with the prior approval of the attorney .208616.6 - 12 - general, except that the secretary or the secretary's delegate may make refunds with respect to the Oil and Gas Severance Tax Act, the Oil and Gas Conservation Tax Act, the Oil and Gas Emergency School Tax Act, the Oil and Gas Ad Valorem Production Tax Act, the Natural Gas Processors Tax Act or the Oil and Gas Production Equipment Ad Valorem Tax Act, Section 7-13-17 NMSA 1978 and the Cigarette Tax Act without the prior approval of the attorney general regardless of the amount.

Pursuant to the final order of the district court, the court of appeals, the supreme court of New Mexico or a federal court, from which order, appeal or review is not HB 2 successfully taken, adjudging that a person has properly Page 11 claimed a credit or rebate or made an overpayment of tax, the secretary shall authorize the payment to the person of the amount thereof.

In the discretion of the secretary, any amount e e 17 of credit or rebate to be paid or tax to be refunded may be e e n d 18 offset against any amount of tax for which the person due to = = l ] 19 receive the credit, rebate payment or refund is liable, or in a l r i 20 the case of a refund of gross receipts tax, any compensating t e a t tax owed by that person's customer as a result of transactions m m 21 e d r e 22 with that person.

The secretary or the secretary's delegate c e r c 23 shall give notice to the taxpayer that the credit, rebate e a n b 24 payment or refund will be made in this manner, and the taxpayer u [ shall be entitled to interest pursuant to Section 7-1-68 NMSA .208616.6 - 13 - 1978 until the tax liability is credited with the credit, rebate or refund amount.

An underpayment of tax to which an overpayment is credited HB 2 pursuant to this section shall be deemed paid in the period Page 12 in which the overpayment was made or the period to which the overpayment was credited against an underpayment, whichever is later.

If the overpayments credited pursuant to this section exceed the underpayments of a tax, the amount of the net overpayment for the periods covered in the e e 17 audit shall be refunded to the taxpayer.

e e n d 18 E.

When a taxpayer makes a payment identified to a = = l ] 19 particular return or assessment, and the department determines a l r i 20 that the payment exceeds the amount due pursuant to that return t e a t or assessment, the secretary may apply the excess to the m m 21 e d r e 22 taxpayer's other liabilities pursuant to the tax acts to which c e r c 23 the return or assessment applies, without requiring the e a n b 24 taxpayer to file a claim for a refund.

The liability to which u [ an overpayment is applied pursuant to this section shall be .208616.6 - 14 - deemed paid in the period in which the overpayment was made or the period to which the overpayment was applied, whichever is later.

If the department determines, upon review of an original or amended income tax return, corporate income and franchise tax return, estate tax return, special fuels excise tax return or oil and gas tax return, that there has been an overpayment of tax for the taxable period to which the return or amended return relates in excess of the amount due to be refunded to the taxpayer pursuant to the provisions of HB 2 Subsection K of Section 7-1-26 NMSA 1978, the department may Page 13 refund that excess amount to the taxpayer without requiring the taxpayer to file a refund claim.

The department shall keep such e e 17 records for a minimum of three years from the date of the e e n d 18 refund or credit.

= = l ] 19 H.

In response to a timely refund claim pursuant to a l r i 20 Section 7-1-26 NMSA 1978 and notwithstanding any other t e a t provision of the Tax Administration Act, the secretary or the m m 21 e d r e 22 secretary's delegate may refund or credit a portion of an c e r c 23 assessment of tax paid, including applicable penalties and e a n b 24 interest representing the amount of tax previously paid by u [ another person on behalf of the taxpayer on the same .208616.6 - 15 - transaction, provided that the requirements of equitable recoupment are met.

A new section of the Tax Administration Act HB 2 is enacted to read:

"[NEWPage MATERIAL]14 DISTRIBUTION--GROSS"DISTRIBUTION--GROSS RECEIPTS TAX TO COUNTY-SUPPORTED MEDICAID FUND.--A distribution pursuant to Section 7-1-6.1 NMSA 1978 of the net receipts attributable to the gross receipts tax shall be made to the county-supported medicaid fund in the amount of two million two hundred thousand e e 17 dollars ($2,200,000)." e e n d 18 SECTION 10.

Section 7-9-3.3 NMSA 1978 (being Laws 2003, = = l ] 19 Chapter 272, Section 4) is amended to read:

a l r i 20 "7-9-3.3.

DEFINITION--ENGAGING IN BUSINESS.--As used in t e a t the Gross Receipts and Compensating Tax Act, "engaging in m m 21 e d r e 22 business" means carrying on or causing to be carried on any c e r c 23 activity with the purpose of direct or indirect benefit, e a n b 24 without regard to having physical presence, including the u [ presence of a representative acting on behalf of the person, in .208616.6 - 16 - the state, except that "engaging in business" does not include:

["engaging in business" does not include ] having a worldwide [web site ] website as a third-party content provider on a computer physically located in New Mexico but ] owned by another nonaffiliated person;

[and B.

["engaging in business" does not include ] using a nonaffiliated third-party call center to accept and process telephone or electronic orders of tangible personal property or licenses primarily from non-New Mexico buyers, which orders are forwarded to a location outside New Mexico for filling, or to provide services HB 2 primarily to non-New Mexico customers;

and Page 15 C.

As used in this subsection, e e 17 "affiliate" means a business entity that, directly or e e n d 18 indirectly, through one or more intermediaries, controls, is = = l ] 19 controlled by or is under common control with another business a l r i 20 entity." t e a t SECTION 11.

Section 7-9-3.5 NMSA 1978 (being Laws 2003, m m 21 e d r e 22 Chapter 272, Section 3, as amended) is amended to read:

c e r c 23 "7-9-3.5.

DEFINITION--GROSS RECEIPTS.-- e a n b 24 A.

As used in the Gross Receipts and Compensating u [ Tax Act:

.208616.6 - 17 - (1) "gross receipts" means the total amount of money or the value of other consideration received from selling property in New Mexico, from leasing or licensing property employed in New Mexico, from granting a right to use a franchise employed in New Mexico, from selling services performed outside New Mexico, the product of which is initially used in New Mexico, or from performing services in New Mexico.

In an exchange in which the money or other consideration received does not represent the value of the property or service exchanged, "gross receipts" means the HB 2 reasonable value of the property or service exchanged;

Page 16 (2) "gross receipts" includes:

(a) any receipts from sales of tangible personal property handled on consignment, including third-partythird- party sales made over a multi-vendor marketplace platform that acts as the intermediary, typically as the processor of the e e 17 transaction, between the seller and the purchaser;

e e n d 18 (b) the total commissions or fees = = l ] 19 derived from the business of buying, selling or promoting the a l r i 20 purchase, sale or lease, as an agent or broker on a commission t e a t or fee basis, of any property, service, stock, bond or m m 21 e d r e 22 security;

c e r c 23 (c) amounts paid by members of any e a n b 24 cooperative association or similar organization for sales or u [ leases of personal property or performance of services by such .208616.6 - 18 - organization;

(e) amounts received by a New Mexico florist from the sale of flowers, plants or other products that are customarily sold by florists where the sale is made pursuant to orders placed with the New Mexico florist that are filled and delivered outside New Mexico by an out-of-stateout-of- state florist;

and HB 2 (f) the receipts of a home service Page 17 provider from providing mobile telecommunications services to customers whose place of primary use is in New Mexico if:

and 2) the charges for mobile e e 17 telecommunications services are billed by or for a customer's e e n d 18 home service provider and are deemed provided by the home = = l ] 19 service provider.

For the purposes of this section, "home a l r i 20 service provider", "mobile telecommunications services", t e a t "customer" and "place of primary use" have the meanings given m m 21 e d r e 22 in the federal Mobile Telecommunications Sourcing Act;

and c e r c 23 (3) "gross receipts" excludes:

e a n b 24 (a) cash discounts allowed and taken;

u [ (b) New Mexico gross receipts tax, .208616.6 - 19 - governmental gross receipts tax and leased vehicle gross receipts tax payable on transactions for the reporting period;

provided that the tax is approved, if approval is required by federal law HB 2 or regulation, by the secretary of the interior of the United Page 18 States;

(f) amounts received solely on behalf of e e 17 another in a disclosed agency capacity;

and e e n d 18 (g) amounts received by a New Mexico = = l ] 19 florist from the sale of flowers, plants or other products that a l r i 20 are customarily sold by florists where the sale is made t e a t pursuant to orders placed with an out-of-state florist for m m 21 e d r e 22 filling and delivery in New Mexico by a New Mexico florist.

c e r c 23 B.

When the sale of property or service is made e a n b 24 under any type of charge, conditional or time-sales contract or u [ the leasing of property is made under a leasing contract, the .208616.6 - 20 - seller or lessor may elect to treat all receipts, excluding any type of time-price differential, under such contracts as gross receipts as and when the payments are actually received.

If the seller or lessor transfers the seller's or lessor's interest in any such contract to a third person, the seller or lessor shall pay the gross receipts tax upon the full sale or leasing contract amount, excluding any HB 2 type of time-price differential." Page 19 SECTION 12.

IMPOSITION AND RATE OF TAX--DENOMINATION AS "GOVERNMENTAL GROSS RECEIPTS TAX".--For the privilege of engaging in certain activities by governments, there is imposed on every agency, institution, instrumentality or political e e 17 subdivision of the state, except any school districtdistrict, [and any e e n d 18 entity licensed by the department of health that is principally = = l ] 19 engaged in providing health care services], an excise tax of a l r i 20 five percent of governmental gross receipts.

The tax imposed t e a t by this section shall be referred to as the "governmental gross m m 21 e d r e 22 receipts tax"." c e r c 23 SECTION 13.

Section 7-9-7.1 NMSA 1978 (being Laws 1993, e a n b 24 Chapter 45, Section 1, as amended) is amended to read:

u [ "7-9-7.1.

DEPARTMENT BARRED FROM TAKING COLLECTION .208616.6 - 21 - ACTIONS WITH RESPECT TO CERTAIN COMPENSATING TAX LIABILITIES.-- A.

and HB 2 (3) the individual is not an agent for Page 20 collection of compensating tax pursuant to Section 7-9-10 NMSA 1978.

and e e 17 (2) did not report taxable gross receipts.

e e n d 18 [B.] C.

The prohibition in Subsection A of this = = l ] 19 section does not prevent the department from enforcing a l r i 20 collection of compensating tax on purchases from persons who t e a t are not individuals, who are agents for collection pursuant to m m 21 e d r e 22 Section 7-9-10 NMSA 1978 or who use the property in the course c e r c 23 of engaging in business in New Mexico or from enforcing e a n b 24 collection of compensating tax due on purchase of manufactured u [ homes." .208616.6 - 22 - SECTION 14.

EXEMPTIONS.--[ExemptedEXEMPTIONS.-- from the gross receipts or compensating tax are those receipts or uses exempted in Sections 7-9-13 through 7-9-42 NMSA 1978.] Exemptions from either the gross receipts tax or the compensating tax are not exemptions from both taxes unless explicitly stated otherwise by law." SECTION 15.

HB 2 "7-9-29.

EXEMPTION--GROSS RECEIPTS TAX--CERTAIN Page 21 ORGANIZATIONS.-- A.

Exempted from the gross receipts tax are the receipts of organizations that demonstrate to the department that they have been granted exemption from the federal income tax by the United States commissioner of internal revenue as e e 17 organizations described in Section 501(c)(3) of the United e e n d 18 States Internal Revenue Code of [1954 ] 1986, as that section = = l ] 19 may be amended or renumbered, except receipts as provided in a l r i 20 Subsection B of this section.

t e a t B.

Exempted from any local option gross receipts m m 21 e d r e 22 tax, but not the state gross receipts tax, are receipts of an c e r c 23 organization that is a hospital licensed by the department of e a n b 24 health that demonstrates to the department that it has been u [ granted exemption from the federal income tax by the United .208616.6 - 23 - 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.

[B.] C.

Exempted from the gross receipts tax are 6 the receipts from carrying on chamber of commerce, visitor bureau and convention bureau functions of organizations that demonstrate to the department that they have been granted exemption from the federal income tax by the United States commissioner of internal revenue as organizations described in Section 501(c)(6) of the United States Internal Revenue Code of [1954] 1986, as that section may be amended or renumbered.

[C.] D.

This section does not apply to receipts derived from an unrelated trade or business as defined in Section 513 of the United States Internal Revenue Code of ] 1986, as that section may be amended or renumbered." [1954 e e 17 SECTION 16.

Section 7-9-45 NMSA 1978 (being Laws 1969, e e n d 18 Chapter 144, Section 35, as amended) is amended to read:

= = l ] 19 "7-9-45.

DEDUCTIONS.-- a l r i 20 A.

[In computing the gross receipts tax or t e a t governmental gross receipts tax due, only those receipts m m 21 e d r e 22 specified in Sections 7-9-46 through 7-9-76.2, 7-9-77.1, c e r c 23 7-9-83, 7-9-85 through 7-9-87 and 7-9-89 NMSA 1978 may be e a n b 24 deducted.

Receipts, whether specified once or several times in u [ those sections, may be deducted only once from gross receipts .208616.6 - 24 - or governmental gross ] Receipts may only be deducted once from gross receipts or governmental gross receipts when computing the gross receipts tax or governmental gross receipts tax due.

TheExempted samefrom any local option gross receipts [thattax, but not the state gross receipts tax, are exemptedreceipts of an organization that is a hospital licensed by the department of health that demonstrates to the department that it has been granted exemption from the grossfederal receiptsincome tax may]by shallthe notUnited beStates bothcommissioner exemptof frominternal revenue as organizations described in Section 501(c)(3) of the grossUnited 6States receiptsInternal taxRevenue andCode deductedof from1986, grossas receipts.that section may be amended or renumbered.

[Receipts that are deducted from gross receipts may not be exempted from the gross receipts tax.] C.

TheExempted samefrom the gross receipts [thattax are exemptedthe receipts from thecarrying governmentalon grosschamber receiptsof tax]commerce, shallvisitor notbureau beand bothconvention exemptbureau fromfunctions of organizations that demonstrate to the governmentaldepartment grossthat receiptsthey taxhave andbeen deductedgranted exemption from governmentalthe grossfederal receipts.income tax by the United States commissioner of internal revenue as organizations described HB 2 in Section 501(c)(6) of the United States Internal Revenue Page 22 Code of 1986, as that section may be amended or renumbered.

[ReceiptsD. that are deducted from governmental gross receipts shall not be exempted from the governmental gross receipts tax.]" SECTION 17.

This section does not apply to receipts derived from an unrelated trade or business as defined in Section 513 of the United States Internal Revenue Code of 1986, as that section may be amended or renumbered." SECTION 16.

Section 7-9-45 NMSA 1978 (being Laws 1969, Chapter 144, Section 35, as amended) is amended to read:

"7-9-45.

DEDUCTIONS.-- A.

Receipts may only be deducted once from gross receipts or governmental gross receipts when computing the gross receipts tax or governmental gross receipts tax due.

B.

The same receipts shall not be both exempt from the gross receipts tax and deducted from gross receipts.

C.

The same receipts shall not be both exempt from the governmental gross receipts tax and deducted from governmental gross receipts." SECTION 17.

e e 17 "7-9-48.

DEDUCTION--GROSS RECEIPTS TAX--GOVERNMENTAL e e n d 18 GROSS RECEIPTS--SALE OF A SERVICE FOR RESALE.-- = = l ] 19 A.

Receipts from selling a service for resale may a l r i 20 be deducted from gross receipts or from governmental gross t e a t receipts if the sale is made to a person who delivers a m m 21 e d r e 22 nontaxable transaction certificate to the seller.

The buyer cHB e2 r c 23 delivering the nontaxable transaction certificate must resell ePage a23 n b 24 the service in the ordinary course of business and the resale u [ must be subject to the gross receipts tax or governmental gross .208616.6 - 25 - receipts tax.

The deduction allowed pursuant to this section shall not be claimed for receipts from an expenditure for which e e 17 a taxpayer claims a credit pursuant to Section 7-2-18.25 or e e n d 18 7-2A-25 [or 7-9G-2] NMSA 1978.

= = l ] 19 C.

A taxpayer allowed a deduction pursuant to this a l r i 20 section shall report the amount deducted separately in a manner t e a t required by the department.

m m 21 e d r e 22 [C.] D.

cHB e2 r c 23 (1) "government" means the United States or ePage a n b 24 the state or a governmental unit or a subdivision, agency, u [ department or instrumentality of the federal government or the .208616.6 - 26 - state;

and (4) "wind generation equipment" means wind generation turbines, blades, nacelles, rotors and supporting structures used to generate electricity from wind and related equipment." e e 17 SECTION 19.

Section 7-9-73.1 NMSA 1978 (being Laws 1991, e e n d 18 Chapter 8, Section 3, as amended) is amended to read:

= = l ] 19 "7-9-73.1.

DEDUCTION--GROSS RECEIPTS--HOSPITALS.--[FiftyRECEIPTS--HOSPITALS.-- ] a l r i 20 A.

Prior to July 1, 2018, sixty percent, and on and t e a t after July 1, 2018, sixty-five percent of the receipts of m m 21 e d r e 22 hospitals licensed by the department of health may be deductedHB c2 ededucted r c 23 from gross receipts;

provided that this deduction Page 25 may be e a n b 24 applied only to the taxable gross receipts remaining after all u [ other appropriate deductions have been taken.

.208616.6 - 27 - B.

provided that this deduction may be applied only to the taxable governmental gross receipts 6 remaining after all other appropriate deductions have been taken.

DEDUCTION--GROSS RECEIPTS TAX AND GOVERNMENTAL GROSS RECEIPTS TAX--PRESCRIPTION DRUGS--OXYGEN.--DRUGS-- OXYGEN.-- A.

Receipts from the sale of prescription drugs and e e 17 oxygen and oxygen services provided by a licensed medicare e e n d 18 durable medical equipment provider may be deducted from gross = = l ] 19 receipts and governmental gross receipts.

a l r i 20 B.

A taxpayer allowed a deduction pursuant to this t e a t section shall report the amount deducted separately in a mannerHB m2 mmanner 21 e d r e 22 required by the department.

cPage e26 r c 23 [B.] C.

For the purposes of this section, e a n b 24 "prescription drugs" means insulin and substances that are:

u [ (1) dispensed by or under the supervision of a .208616.6 - 28 - licensed pharmacist or by a physician or other person authorized under state law to do so;

The buyer delivering the nontaxable e e 17 transaction certificate must have the service performed e e n d 18 directly upon tangible personal property [which he ] that the = = l ] 19 buyer is in the business of manufacturing or upon ingredients a l r i 20 or component parts thereof.

tHB e2 a t B.

A taxpayer allowed a deduction pursuant to this mPage m27 21 e d r e 22 section shall report the amount deducted separately in a manner c e r c 23 required by the department." e a n b 24 SECTION 22.

TEMPORARY PROVISION--TAXATION AND REVENUE u [ DEPARTMENT REPORT TO LEGISLATURE--HEALTH CARE INDUSTRY REVENUE .208616.6 - 29 - AND TAX EXPENDITURES.--The taxation and revenue department shall evaluate health-care-industry-related revenue collections and tax expenditures and shall, by December 1, 2017, report to the legislative finance committee and the revenue stabilization and tax policy committee the result of that evaluation with a recommendation as to whether existing tax expenditures for that industry should be adjusted.

e e 17 B.

If this act takes effect after July 1, 2017, the e e n d 18 effective date of the provisions of Sections 4 through 22 and = = l ] 19 24 of this act is the first day of the month following theHB date2 athe ldate r i 20 this act takes effect.

tPage e28 a t C.

The effective date of the provisions of Sections m m 21 e d r e 22 1 through 3 and 23 of this act is July 1, 2018.

cHB e2 rPage c29 235 SECTION7 26.9 25

EMERGENCY.--It is necessary for the public e a n b 24 peace, health and safety that this act take effect immediately.

u [ - 30 - .208616.6