HEALTH EQUIPMENT GRT DEDUCTION

SB0133

SENATE BILL 133

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Jeff Steinborn
and
Martin Hickey
and
Rex Wilson

and
Carrie Hamblen

AN ACT

RELATING TO TAXATION; PROVIDING A GROSS RECEIPTS TAX DEDUCTION
FOR THE SALE OF CERTAIN EQUIPMENT AND MEDICATION DISPENSED BY A
HEALTH CARE PRACTITIONER IN A PRACTICE SETTING; PROVIDING A
HOLD HARMLESS DISTRIBUTION TO MUNICIPALITIES AND COUNTIES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1.
A new section of the Tax Administration Act is

enacted to read:

"[
NEW MATERIAL
] DISTRIBUTION TO HOLD HARMLESS
MUNICIPALITIES AND COUNTIES FROM GROSS RECEIPTS TAX DEDUCTIONS
FOR RECEIPTS FOR THE SALE OF CERTAIN IN-OFFICE EQUIPMENT AND
MEDICATIONS TO HEALTH CARE PRACTITIONERS.--

A. A distribution pursuant to Section 7-1-6.1 NMSA
1978 shall be made to a municipality in an amount, subject to
any increase or decrease made pursuant to Section 7-1-6.15 NMSA
1978, equal to the total deductions claimed pursuant to Section
2 of this 2026 act for the month by taxpayers from business
locations in the municipality multiplied by the sum of the
combined rate of all municipal local option gross receipts
taxes in effect in the municipality for the month plus one and
two hundred twenty-five thousandths percent.

B. A distribution pursuant to Section 7-1-6.1 NMSA
1978 shall be made to a county in an amount, subject to any
increase or decrease made pursuant to Section 7-1-6.15 NMSA
1978, equal to the total deductions claimed pursuant to Section
2 of this 2026 act for the month by taxpayers from business
locations:

(1) within a municipality in the county
multiplied by the combined rate of all county local option
gross receipts taxes in effect for the month that are imposed
throughout the county; and

(2) in the county but not within a
municipality multiplied by the combined rate of all county
local option gross receipts taxes in effect for the month that
are imposed in the county area not within a municipality."

SECTION 2.
A new section of the Gross Receipts and
Compensating Tax Act is enacted to read:

"[
NEW MATERIAL
] DEDUCTION--GROSS RECEIPTS--IN-OFFICE
EQUIPMENT AND IN-OFFICE MEDICATION SOLD TO A HEALTH CARE
PRACTITIONER.--

A. Except for receipts that may be deducted
pursuant to Section 7-9-73.3 NMSA 1978, receipts from the sale
of in-office equipment to a health care practitioner or an
association of health care practitioners may be deducted from
gross receipts if the in-office equipment is used during a
service that is within the scope of practice of the health care
practitioner.

B. Except for receipts that may be deducted
pursuant to Section 7-9-73.2 NMSA 1978, receipts from the sale
of in-office medication to a health care practitioner or an
association of health care practitioners may be deducted from
gross receipts if the in-office medication is used for the
treatment of patients within the scope of practice of the
health care practitioner providing the treatment.

C. A taxpayer allowed a deduction pursuant to this
section shall report the amount of the deduction separately in
a manner required by the department.

D. The deductions provided by this section shall be
included in the tax expenditure budget pursuant to Section
7-1-84 NMSA 1978, including the annual aggregate cost of the
deductions.

E. As used in this section:

(1) "association of health care practitioners"
means a corporation, an 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 or
a hospital, a hospice, a nursing home or an entity that is
solely an outpatient facility or intermediate care facility
licensed by the health care authority;

(2) "health care practitioner" means:

(a) a chiropractic physician licensed
pursuant to the provisions of the Chiropractic Physician
Practice Act;

(b) a dentist or dental hygienist
licensed pursuant to the Dental Health Care Act;

(c) a doctor of oriental medicine
licensed pursuant to the provisions of the Acupuncture and
Oriental Medicine Practice Act;

(d) an optometrist licensed pursuant to
the provisions of the Optometry Act;

(e) an osteopathic physician licensed
pursuant to the provisions of the Medical Practice Act;

(f) a physical therapist licensed
pursuant to the provisions of the Physical Therapy Act;

(g) a physician or physician assistant
licensed pursuant to the provisions of the Medical Practice
Act;

(h) a podiatric physician licensed
pursuant to the provisions of the Podiatry Act;

(i) a psychologist licensed pursuant to
the provisions of the Professional Psychologist Act;

(j) a registered lay midwife registered
by the department of health;

(k) a registered nurse or licensed
practical nurse licensed pursuant to the provisions of the
Nursing Practice Act;

(l) a registered occupational therapist
licensed pursuant to the provisions of the Occupational Therapy
Act;

(m) a respiratory care practitioner
licensed pursuant to the provisions of the Respiratory Care
Act;

(n) a speech-language pathologist or
audiologist licensed pursuant to the Speech-Language Pathology,
Audiology and Hearing Aid Dispensing Practices Act;

(o) a professional clinical mental
health counselor, marriage and family therapist or professional
art therapist licensed pursuant to the provisions of the
Counseling and Therapy Practice Act who has obtained a master's
degree or a doctorate;

(p) an independent social worker
licensed pursuant to the provisions of the Social Work Practice
Act;

(q) a clinical laboratory that is
accredited pursuant to 42 U.S.C. Section 263a but that is not a
laboratory in a physician's office or in a hospital defined
pursuant to 42 U.S.C. Section 1395x; and

(r) a naturopathic doctor licensed
pursuant to the provisions of the Naturopathic Doctors'
Practice Act;

(3) "in-office equipment" means equipment used
by a health care practitioner primarily to provide medical
treatment to patients in the health care practitioner's
practice setting. "In-office equipment" does not mean office
furniture that is not primarily used to provide medical
treatment, including desks, desk chairs, computers and
software; and

(4) "in-office medication" means saline or
other non-prescription substance dispensed by a health care
practitioner to a patient in the health care practitioner's
practice setting to treat the patient's specific illness,
injury or other medical necessity.
"

SECTION 3.
EFFECTIVE DATE.--The effective date of the
provisions of this act is July 1, 2026.