45th legislature - STATE OF NEW MEXICO - first session, 2001

RELATING TO TAXATION; ENACTING THE CHILD CARE QUALITY INVESTMENT TAX CREDIT ACT; PROVIDING TAX CREDITS FOR CERTAIN EXPENDITURES BY QUALIFIED CHILD CARE CENTERS AND FOR EXPANSION OF CARE TO LOW-INCOME CHILDREN BY NATIONALLY ACCREDITED FACILITIES.

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

Section 1. SHORT TITLE.--This act may be cited as the "Child Care Quality Investment Tax Credit Act".

Section 2. PURPOSE OF ACT.--It is the purpose of the Child Care Quality Investment Tax Credit Act to promote the availability of high quality child care for all children in New Mexico by providing tax incentives to child care providers who invest in quality through increases in employment and training of child care workers and to encourage nationally accredited child care centers to enroll low-income children.

Section 3. DEFINITIONS.--As used in the Child Care Quality Investment Tax Credit Act:

A. "accredited child care facility" means a child care center that is accredited by the national association for the education of young children division of the national academy of early childhood programs or the national early childhood program accreditation division of the national child care association;

B. "child care center" means a person licensed as a child care center by the children, youth and families department;

C. "department" means the taxation and revenue department, the secretary of taxation and revenue and any employee of the department exercising authority lawfully delegated to that employee by the secretary;

D. "qualified child care facility" means a child care center that includes provision of care for children under twenty-four months of age and for one or more children of any age whose care is subsidized by the children, youth and families department; and

E. "taxpayer" means a person liable for payment of any tax, a person responsible for withholding and payment over or for collection and payment over of any tax or a person to whom an assessment has been made, if the assessment remains unabated or the amount thereof has not been paid.

Section 4. CHILD CARE QUALITY INVESTMENT TAX CREDIT--AMOUNT--ELIGIBILITY--QUALIFIED EXPENDITURES.--

A. A taxpayer who provides child care at a qualified child care facility may claim a tax credit in an amount equal to eighty percent of qualified expenditures made by the taxpayer, not to exceed twenty thousand dollars ($20,000) in any calendar year. The tax credit provided in this section may be cited as the "child care quality investment tax credit".

B. For purposes of Subsection A of this section, the amount of a taxpayer's qualified expenditures is the sum of:

(1) the increase in the taxpayer's gross annual payroll expenses, including benefits paid by the taxpayer, from a calendar year in which the ratio of children under twenty-four months of age to child care workers for those children is higher than four to one to an immediately succeeding calendar year in which the ratio of children under twenty-four months of age to child care workers for those children is four to one or less; and

(2) the amount of the taxpayer's expenditures for training or education of child care workers employed by the taxpayer in a qualified child care facility, if the training or education is provided by a college, university or other accredited source outside the facility or is conducted at the facility at a time that the facility is not open for child care. Qualified expenditures include expenditures for tuition, books, supplies and fees associated with such training or education, as well as salary or wages paid for the hours spent in education or training, if the salary or wages have not been counted toward the credit in Paragraph (1) of this subsection.

Section 5. ACCESS TO QUALITY CHILD CARE TAX CREDIT--AMOUNT--ELIGIBILITY--QUALIFIED EXPENDITURES.--A taxpayer who provides child care at an accredited child care facility may claim a tax credit in an amount equal to twenty percent of payments made by the children, youth and families department to the facility for subsidized care of low-income children, not to exceed ten thousand dollars ($10,000) in any calendar year. The tax credit provided in this section may be cited as the "access to quality child care tax credit".

Section 6. CLAIMING THE TAX CREDITS AGAINST CERTAIN TAXES.--

A. A taxpayer shall apply for approval of a tax credit within one year following the end of the calendar year in which the qualified expenditures were made or following the period for which the accredited child care facility is claiming a credit for subsidy payments received. A taxpayer who qualifies for both the child care quality investment tax credit and the access to quality child care tax credit may claim both credits.

B. A taxpayer having applied for and been granted approval for the child care quality investment tax credit or the access to quality child care tax credit may claim the amount of the credit against the taxpayer's gross receipts tax, compensating tax or withholding tax due, or any combination of those taxes, provided that no taxpayer may claim an amount of available credit for a reporting period that exceeds the taxpayer's tax liability.

C. Any amount of the child care quality investment tax credit or the access to quality child care tax credit not claimed against a taxpayer's gross receipts tax, compensating tax or withholding tax due for a reporting period may be claimed against gross receipts tax, compensating tax or withholding tax in subsequent reporting periods, but not later than three years from the date an amount of the credit was first claimed.

Section 7. CREDIT CLAIM FORMS--CERTIFICATION BY CHILDREN, YOUTH AND FAMILIES DEPARTMENT.--

A. The department shall provide credit claim forms. A credit claim shall accompany any return to which the taxpayer wishes to apply the child care quality investment tax credit or the access to quality child care tax credit, and the claim shall specify the amount and type of credit intended to apply to each return.

B. The taxpayer shall submit with the credit claim form written certification from the children, youth and families department that:

(1) in the case of the child care quality investment tax credit, the child care center is a qualified child care facility and the taxpayer has made the qualified expenditures for which the taxpayer claims the credit; and

(2) in the case of the access to quality child care tax credit, the child care center is an accredited child care facility and has received the subsidy payments for care of low-income children for which the taxpayer claims the credit.

Section 8. INTERPRETATION OF ACT--ADMINISTRATION OF ACT.--The department shall interpret the provisions of the Child Care Quality Investment Tax Credit Act and shall administer the tax credits under that act pursuant to the provisions of the Tax Administration Act.

Section 9. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2001.