HOUSE BILL 368

48th legislature - STATE OF NEW MEXICO - first session, 2007

INTRODUCED BY

Edward C. Sandoval

AN ACT

RELATING TO TAXATION; PROVIDING FOR AN INCOME TAX EXEMPTION FOR EARNED INCOME OF ARMED FORCES RETIREES.

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] EXEMPTION--EARNED INCOME OF ARMED FORCES RETIREE.--

          A. An individual who is an armed forces retiree may claim an exemption in an amount equal to fifty percent of earned income includable, except for this exemption, in net income; provided that the exemption shall not exceed fifty thousand dollars ($50,000) in a taxable year.

          B. As used in this section:

                (1) "armed forces retiree" means a former member of the armed forces of the United States who has qualified by years of service or disability to separate from military service with lifetime benefits; and

                (2) "earned income" means compensation, net earnings from self-employment and net income from a sole proprietorship or pass-through entity in which the taxpayer is an active participant."

     Section 2. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2007.

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