Committee advances GRT-deduction extension for health providers but members push for local 'hold harmless' protections

The sponsor introduced House Bill 338 to extend the gross receipts tax (GRT) deduction for health-care providers through 2031 and to add coinsurance payments to the deduction. Sponsor and provider representatives said the deduction helps private practices and keeps providers in the state; they argued it lowers the effective tax burden on health-care services that are difficult to pass along to patients.

City and municipal witnesses urged caution. Al Park, testifying for the City of Albuquerque, said the city supported the bill's policy goals but raised concerns about local revenues and urged a "hold harmless" mechanism. The New Mexico Municipal League warned the bill could cost municipalities about $30 million by FY30 and said the currently proposed hold-harmless payments would offset only a portion of that loss.

Sponsor noted parallel negotiations with the Senate and expressed willingness to pursue a hold-harmless amendment in tax committee. The committee debated a motion to table the bill (which failed) and ultimately approved a motion to advance the bill "with no recommendation" (a due pass without recommendation) so further fiscal and hold-harmless language can be negotiated in Taxation and Revenue. Members emphasized priority to protect small towns and municipalities if the deduction moves forward.