Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Ezzell
LAST UPDATED
ORIGINAL DATE 02
/21/25
SHORT TITLE Gold & Silver Bullion Sale Gross Receipts
BILL
NUMBER Senate Bill 382
ANALYST Graeser
REVENUE*
(dollars in thousands)
Type FY25 FY26 FY27 FY28 FY29
Recurring or
Nonrecurring
Fund
Affected
GRT
Exemption
$0
Up to
($1,020.0)
Up to
($1,060.0)
Up to
($1,100.0)
Up to
($1,140.0)
Recurring General Fund
$0
Up to
($870.0)
Up to
($900.0)
Up to
($930.0)
Up to
($960.0)
Recurring
Local
Governments
Parentheses ( ) indicate revenue decreases.
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
TRD $14.6 $14.6
Parentheses ( ) indicate expenditure decreases.
Sources of Information
New Mexico Taxation and Revenue Department’s RP80
LFC Files
Agency Analysis Received From
State Investment Council (SIC) Taxation and Revenue Department (TRD)
SUMMARY
Synopsis of Senate Bill 382
Senate Bill 382 (SB382) provides a gross receipts tax deduction for receipts from the sale of gold
or silver coins and gold or silver bullion, including bars, ingots, and rounds but excluding
jewelry, works of art, or novelty or commemorative pieces. Deductions are required to be
reported separately, and the deduction must be included in the annual Taxation and Revenue
Department (TRD) tax expenditure report.
The effective date of this bill is July 1, 2025.
Senate Bill 382 – Page 2
FISCAL IMPLICATIONS
This bill creates a tax expenditure with a cost that is difficult to determine but likely significant.
LFC has serious concerns about the substantial risk to state revenues from tax expenditures and
the increase in revenue volatility from erosion of the revenue base. The committee recommends
the bill adhere to the LFC tax expenditure policy principles for vetting, targeting, and reporting
or action be postponed until the implications can be more fully studied.
The TRD tax data system codes include sales of gold and silver bullion and coins. However, the
codes also include jewelry and precious stones, as well. The following is an extract of the RP80
for the 24-month period January 2023 through December 2024.
Count
Gross
Receipts
Txbl Gross
Rcpts
Gross Tax
Deduction
s Ratio
Tax
Rate
42394 - Jewelry, Watch, Precious
Stone, and Precious Metal Merchant
Wholesalers
162 $5,906,195 $4,596,751 $375,721 22.2% 8.174%
423940 - Jewelry, Watch, Precious
Stone, and Precious Metal Merchant
Wholesalers
12,200 $124,227,035 $43,208,426 $3,282,405 65.2% 7.597%
Although the data mixes eligible with noneligible transactions, the fiscal impact is set at the
maximum potential of this exemption. TRD reports the fiscal impact of this deduction as
“unknown but negative.”
SIGNIFICANT ISSUES
The sale of stocks, bonds and securities are exempt from the gross receipts tax in the same
section of statute that exempts interest and dividends.
7-9-25. Exemption; gross receipts tax; dividends and interest.
Exempted from the gross receipts tax are the receipts received as interest on money
loaned or deposited, receipts received as dividends or interest from stocks, bonds or
securities or receipts from the sale of stocks, bonds or securities.
History: 1953 Comp., § 72-16A-12.13, enacted by Laws 1969, ch. 144, § 18.
Gold and silver bullion are primarily purchased as a long-term investment, primarily intended to
inflation-proof an individual’s personal investment portfolio. For this reason, there is some
reason to treat the purchase of these investment instruments as an investment similar to buying
stocks or bonds. Gold coins can be equated with gold or silver bullion as primarily an investment
instrument. However, silver coins are frequently purchased by hobby coin collectors.
TRD documents collateral implications:
TRD presumes the bill intends to provide a GRT deduction on the receipts from the sale
of collectible coins and bullion, which would not be taxable if they were considered legal
tender. TRD notes that receipts from sales of gold and silver to jewelers may be
deducted, subject to certain limitations, under existing law (Section 7-9-74 NMSA 1978),
and that this new deduction overlaps with that limited existing deduction.
While tax incentives can support specific industries or promote desired social and
economic behaviors, the growing number of such incentives complicate the tax code. Senate Bill 382 – Page 3
Introducing more tax incentives has two main consequences: (1) It creates special
treatment and exceptions within the code, leading to increased tax expenditures and a
narrower tax base, which negatively impacts the general fund; and (2) It imposes a
heavier compliance burden on both taxpayers and TRD. Increasing complexity and
exceptions in the tax code is generally not in line with sound tax policy.
This bill narrows the gross receipts tax (GRT) base. Many New Mexico tax reform efforts over
the last few years have focused on broadening the GRT base and lowering the rates. Narrowing
the base leads to continually rising GRT rates, increasing volatility in the state’s largest general
fund revenue source. Higher rates compound tax pyramid issues and force consumers and
businesses to pay higher taxes on all other purchases without an exemption, deduction, or credit.
PERFORMANCE IMPLICATIONS
The LFC tax policy of accountability is met with the bill’s requirement to report annually to an
interim legislative committee regarding the data compiled from the reports from taxpayers taking
the deduction and other information to determine whether the deduction is meeting its purpose.
ADMINISTRATIVE IMPLICATIONS
TRD will need to update forms, instructions, and publications. Implementing this bill will have
a low impact on TRD’s Information Technology Division (ITD), approximately 220 hours or
just over one month and $14,661 of staff workload costs.
TECHNICAL ISSUES
TRD suggests the definition of “gold or silver bullion” under subsection D, page 2, clarify if
conditions (1) through (4) must all be met, and therefore an “and” should be added to the end of
lines, 6, 9, and 13. Or if the opposite is true and only one of the conditions must be met, and
therefore an “or” added to the end of lines, 6, 9, and 13.
OTHER SUBSTANT IVE ISSUES
In assessing all tax legislation, LFC staff considers whether the proposal is aligned with
committee-adopted tax policy principles. Those five principles:
Adequacy: Revenue should be adequate to fund needed government services.
Efficiency: Tax base should be as broad as possible and avoid excess reliance on one tax.
Equity: Different taxpayers should be treated fairly.
Simplicity: Collection should be simple and easily understood.
Accountability: Preferences should be easy to monitor and evaluate.
In addition, staff reviews whether the bill meets principles specific to tax expenditures. Those
policies and how this bill addresses those issues:
Tax Expenditure Policy Principle Met? Comments
Vetted: The proposed new or expanded tax expenditure was vetted
through interim legislative committees, such as LFC and the Revenue
Stabilization and Tax Policy Committee, to review fiscal, legal, and
X
Senate Bill 382 – Page 4
general policy parameters.
Targeted: The tax expenditure has a clearly stated purpose, long-term
goals, and measurable annual targets designed to mark progress toward
the goals.
No purpose stated
or implied.
Clearly stated purpose X
Long-term goals X
Measurable targets X
Transparent: The tax expenditure requires at least annual reporting by
the recipients, the Taxation and Revenue Department, and other relevant
agencies
Accountable: The required reporting allows for analysis by members of
the public to determine progress toward annual targets and determination
of effectiveness and efficiency. The tax expenditure is set to expire unless
legislative action is taken to review the tax expenditure and extend the
expiration date.
Public analysis X
Expiration date X
Effective: The tax expenditure fulfills the stated purpose. If the tax
expenditure is designed to alter behavior – for example, economic
development incentives intended to increase economic growth – there are
indicators the recipients would not have performed the desired actions
“but for” the existence of the tax expenditure.
No purpose or
rationale offered.
Fulfills stated purpose X
Passes “but for” test X
Efficient: The tax expenditure is the most cost-effective way to achieve
the desired results.
X
Key: Met Not Met ? Unclear
LG/sgs/hg