SENATE BILL 552

47th legislature - STATE OF NEW MEXICO - first session, 2005

INTRODUCED BY

H. Diane Snyder

AN ACT

RELATING TO TAXATION; PROVIDING FOR AN INCOME TAX CREDIT FOR NEW MEXICO RESIDENTS SIXTY-FIVE YEARS OF AGE OR OLDER FOR UNREIMBURSED EXPENDITURES FOR PRESCRIPTION DRUGS.

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] INCOME TAX--CREDIT--PRESCRIPTION DRUGS.--

          A. Except as otherwise provided in this section, any resident who files an individual New Mexico income tax return and who is sixty-five years of age or older may claim, and the department may allow, a tax credit in an amount not to exceed seventy-five percent of the taxpayer's actual unreimbursed expenditures for prescription drugs purchased by the taxpayer during the taxable year for which the return is filed.

          B. The credit provided pursuant to this section may be deducted from the taxpayer's New Mexico income tax liability for the taxable year. If the credit exceeds the taxpayer's income tax liability for the taxable year, the excess shall be refunded to the taxpayer.

          C. A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the credit provided under this section that would have been allowed on a joint return.

          D. The credit provided pursuant to this section shall not be allowed for an unreimbursed expenditure included in the taxpayer's itemized deductions, as defined in Section 63 of the Internal Revenue Code for the taxable year.

          E. A claim for the credit provided pursuant to this section shall not be filed by a resident who was an inmate of a public institution for more than six months during the taxable year for which the credit could be claimed or who was not physically present in New Mexico for at least six months during the taxable year for which the credit could be claimed.

          F. As used in this section:

                (1) "dependent" means "dependent" as defined by Section 152 of the Internal Revenue Code, but also includes a minor child or stepchild of the resident who would be a dependent for federal income tax purposes if the public assistance contributing to the support of the child or the stepchild was considered to have been contributed by the resident; and

                (2) "prescription drugs" means insulin and substances that are:

                     (a) dispensed by or under the supervision of a licensed pharmacist or other person authorized under state law to dispense the substance;

                     (b) prescribed for a specified individual by a person authorized under state law to prescribe the substance; and

                     (c) subject to the restrictions on sale contained in 21 U.S.C. 353."  

     Section 2. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2005.

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