Development of Modeling Tool to be Used in Evaluating Alternatives to the Current Gross Receipt

The Bureau of Business and Economic Research was asked to analyze the structure of the NM economy to develop estimates of commercial transactions in the state as well as other information critical to a full assessment of tax options by the Revenue Stabilization and Tax Policy Committee. BBER had determined that the IMPLAN model and proprietary databases could provide an appropriate tool for a model of the structure of the New Mexico economy that would yield information critical to evaluating alternatives to the current gross receipts tax. The first phase of the research involved validating the I MPLAN model and IMPLAN databases on the structure of NM economy in 2012. We then combined the IMPLAN data with other data in an effort to build a model for estimating the gross receipts tax base statewide. Finally, we put the model to the test by examining the revenue impacts of the Sharer-Taylor 2013 legislation to replace the Gross Receipts, Income and other taxes with a broad -based tax on transactions