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

RELATING TO TAXATION; ENACTING SECTIONS OF THE INCOME TAX ACT AND CORPORATE INCOME AND FRANCHISE TAX ACT TO PROVIDE A CREDIT FOR GROSS RECEIPTS TAX PAID ON RECEIPTS FROM THE PROVISION OF MEDICAL AND OTHER HEALTH SERVICES BY PHYSICIANS.

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] CREDIT--PHYSICIANS--GROSS RECEIPTS TAX PAID ON RECEIPTS FROM THE PROVISION OF MEDICAL AND OTHER HEALTH SERVICES--REFUND.--

A. A physician who files an individual New Mexico income tax return may claim a credit for state and local option gross receipts taxes paid in the taxable year for which the credit is claimed on receipts of the taxpayer from the provision of medical and other health services or on receipts of a pass-through business entity of which the taxpayer is an owner from the provision of medical and other health services by physicians. If the taxes were paid by a pass-through business entity of which the taxpayer is an owner, the amount of the gross receipts taxes paid by the taxpayer shall be determined to be the taxes paid on that portion of the taxable gross receipts of the pass-through business entity from the provision of medical and other health services by physicians that represents the taxpayer's proportionate ownership share of the pass-through business entity.

B. The credit provided by this section may only be deducted from the taxpayer's New Mexico income tax liability for the taxable year. Any portion of the tax credit provided by this section that remains unused at the end of the taxpayer's taxable year may be carried forward for three consecutive taxable years.

C. As used in this section:

(1) "owner" means a partner in a partnership not taxed as a corporation for federal income tax purposes for the taxable year, a shareholder of an S corporation or of a corporation other than an S corporation that is not taxed as a corporation for federal income tax purposes for the taxable year, a member of a limited liability company or any similar person holding an ownership interest in a pass-through business entity;

(2) "pass-through business entity" means any business association other than:

(a) a sole proprietorship;

(b) an estate or trust; or

(c) a corporation, limited liability company, partnership or other entity not a sole proprietorship taxed as a corporation for federal income tax purposes for the taxable year; and

(3) "physician" means a medical doctor licensed as a physician to practice medicine pursuant to the provisions of the Medical Practice Act or a person licensed as an osteopathic physician pursuant to the provisions of Chapter 61, Article 10 NMSA 1978."

Section 2. A new section of the Corporate Income and Franchise Tax Act is enacted to read:

"[NEW MATERIAL] CREDIT--GROSS RECEIPTS TAX PAID ON RECEIPTS FROM MEDICAL AND HEALTH SERVICES PROVIDED BY PHYSICIANS--REFUND.--

A. A taxpayer that files a corporate income tax return may claim a credit for state and local option gross receipts taxes paid in the taxable year for which the credit is being claimed on receipts of the taxpayer from the provision of medical and other health services by physicians.

B. The credit provided by this section may only be deducted from the taxpayer's corporate income tax liability for the taxable year. Any portion of the tax credit provided by this section that remains unused at the end of the taxpayer's taxable year may be carried forward for three consecutive taxable years.

C. As used in this section, "physician" means a medical doctor licensed as a physician to practice medicine pursuant to the provisions of the Medical Practice Act or a person licensed as an osteopathic physician pursuant to the provisions of Chapter 61, Article 10 NMSA 1978."

Section 3. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2002.