45th legislature - STATE OF NEW MEXICO - second session, 2002

FOR THE ECONOMIC AND RURAL DEVELOPMENT AND

TELECOMMUNICATIONS COMMITTEE

AN ACT

RELATING TO TAXATION; PROVIDING A GROSS RECEIPTS TAX DEDUCTION FOR CERTAIN SOFTWARE DEVELOPMENT SERVICES; ENACTING A NEW SECTION OF THE GROSS RECEIPTS AND COMPENSATING TAX ACT.

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

Section 1. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

"[NEW MATERIAL] DEDUCTION--GROSS RECEIPTS TAX--SALE OF SOFTWARE DEVELOPMENT SERVICES.--

A. The receipts of an eligible software development company from the sale of software development services that are performed in a qualified area may be deducted from gross receipts.

B. As used in this section:

(1) "eligible software development company" means a taxpayer whose primary business in New Mexico is providing software development services and who had no business location in New Mexico other than in a qualified area during the period for which a deduction under this section is sought;

(2) "qualified area" means the state of New Mexico except for an incorporated municipality with a population of more than fifty thousand according to the most recent federal decennial census; and

(3) "software development services" means custom software design and development and web site design and development but does not include software implementation or support services."

Section 2. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2002.