HOUSE BILL 10

56th legislature - STATE OF NEW MEXICO - second session, 2024

INTRODUCED BY

Cynthia Borrego and Javier Martínez and Kristina Ortez

 

 

 

 

 

AN ACT

RELATING TO TAXATION; CREATING THE HOME FIRE RECOVERY INCOME TAX CREDIT.

 

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

     SECTION 1. A new section of the Income Tax Act is enacted to read:

     "[NEW MATERIAL] HOME FIRE RECOVERY INCOME TAX CREDIT.--

          A. A taxpayer who is not a dependent of another individual and who, beginning on the effective date of this section and prior to January 1, 2030, incurs qualified site-built home expenditures for a home in New Mexico to replace a prior home of the taxpayer that was destroyed by a wildfire in calendar years 2021 through 2023 may claim a tax credit against the taxpayer's tax liability imposed pursuant to the Income Tax Act in an amount equal to the qualified site-built home expenditures incurred by the taxpayer. The tax credit provided by this section may be referred to as the "home fire recovery income tax credit".

          B. A taxpayer who seeks to claim a tax credit pursuant to this section shall apply for certification of eligibility for the tax credit from the construction industries division of the regulation and licensing department on forms and in a manner prescribed by that division. An application for certification of the tax credit shall be made no later than twelve months after the calendar year in which construction of the site-built home is completed. Except as otherwise provided in Subsections F and G of this section, only one tax credit shall be certified per taxpayer. The construction industries division may promulgate rules governing the procedure for administering the provisions of this subsection. Completed applications shall be considered in the order received.

          C. An application for certification of eligibility shall include:

                (1) proof that the taxpayer's prior home was destroyed by wildfire in calendar years 2021 through 2023, including a sworn statement by the taxpayer;

                (2) proof that the taxpayer incurred expenditures for the construction of a site-built home on the same property of the taxpayer's prior, wildfire-destroyed home, including a contract with a builder;

                (3) a sworn statement by the taxpayer and the builder of the site-built home that the construction of a new site-built home has been completed and stating the date of its completion; and

                (4) any additional information the construction industries division of the regulation and licensing department may require to determine eligibility for the credit.

          D. If the construction industries division of the regulation and licensing department determines that the taxpayer meets the requirements of this section, the division shall issue a dated certificate of eligibility to the taxpayer providing the amount of home fire recovery income tax credit for which the taxpayer is eligible and the taxable year in which the credit may be claimed. The construction industries division shall provide the department with the certificates of eligibility issued pursuant to this subsection in an electronic format at regularly agreed-upon intervals.

          E. A taxpayer issued a certificate of eligibility shall claim the tax credit in a manner required by the department within twelve months of being issued the certificate of eligibility.

          F. That portion of the tax credit that exceeds a taxpayer's tax liability in the taxable year in which the tax credit is claimed shall not be refunded but may be carried forward for a maximum of three consecutive taxable years.

          G. Married individuals filing separate returns for a taxable year for which they could have filed a joint return may each claim only one-half of the tax credit that would have been claimed on a joint return.

          H. A taxpayer may be allocated the right to claim the tax credit in proportion to the taxpayer's ownership interest if the taxpayer owns an interest in a business entity that is taxed for federal income tax purposes as a partnership or limited liability company and that business entity has met all of the requirements to be eligible for the credit. The total credit claimed by all members of the partnership or limited liability company shall not exceed the allowable credit pursuant to this section.

          I. The department shall compile an annual report on the tax credit provided by this section that shall include the number of taxpayers approved by the department to receive the credit, the aggregate amount of credits approved and any other information necessary to evaluate the credit. The department shall present the report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the cost of the tax credit.

          J. As used in this section:

                (1) "home" means a dwelling designed for long-term habitation in which the taxpayer resides for a majority of the year;

                (2) "qualified site-built home expenditures" means gross expenditures for the construction of a site-built home on the same property in New Mexico that a taxpayer's prior home was destroyed by a wildfire in calendar years 2021 through 2023, less any compensation related to home construction or repair costs received pursuant to the federal Hermit's Peak/Calf Canyon Fire Assistance Act; and

                (3) "site-built home" means a home that is constructed permanently on a taxpayer's property with a foundation and that cannot be moved, and excludes a manufactured or mobile home."

     SECTION 2. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2024.

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