House Bill text for HB1011

HOUSE BILL 1011

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

INTRODUCED BY

Joni Marie Gutierrez

AN ACT

RELATING TO TAXATION; CREATING CHILE PRODUCTION TAX CREDITS THAT MAY BE TAKEN AGAINST A TAXPAYER'S GROSS RECEIPTS TAX, COMPENSATING TAX AND WITHHOLDING TAX DUE AND THE TAXPAYER'S PERSONAL INCOME TAX OR CORPORATE INCOME TAX.

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] CHILE PRODUCTION TAX CREDIT--INCOME TAX LIABILITY.--

A. A taxpayer who files an individual New Mexico income tax return, who is not a dependent of another individual and who is a qualified taxpayer may apply for and may be granted a tax credit by the department pursuant to this section. The tax credit provided in this section may be referred to as the "chile production tax credit".

B. A taxpayer who is authorized by the department to receive a chile production tax credit to be claimed against that taxpayer's gross receipts tax, compensating tax and withholding tax liabilities may claim a chile production tax credit pursuant to this section if the taxpayer has a balance of chile production tax credit remaining to be claimed and is not applying the balance against the taxpayer's gross receipts tax, compensating tax or withholding tax. A copy of the qualified taxpayer's chile production tax credit document shall be included with the individual income tax return filed by the taxpayer at the time that the chile production tax credit is claimed. The taxpayer shall state on each return the amount of the chile production tax credit that the taxpayer is applying against the taxpayer's tax liability.

C. A qualified taxpayer may apply the balance of the taxpayer's chile production tax credit against the taxpayer's individual income tax liability for the year in which the qualifying event occurred in an amount determined by the department and reflected on the taxpayer's chile production tax credit document.

D. A husband and wife filing separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the chile production tax credit that would have been allowed them in a joint return.

E. As used in this section:

(1) "chile processor" means a person who processes chile for resale;

(2) "chile producer" means a person who grows chile for resale;

(3) "chile production tax credit document" means a document issued by the department stating the amount of chile production tax credit that a qualified taxpayer is authorized to apply against the taxpayer's gross receipts tax, compensating tax and withholding tax liabilities or the taxpayer's liability pursuant to the Income Tax Act or the Corporate Income and Franchise Tax Act;

(4) "process" means to roast, dry, freeze, can, cook or brine chile or to extract the color from chile;

(5) "qualified taxpayer" means a chile producer or chile processor who harvests or processes chile on or after July 1, 2007, and who has been issued a chile production tax credit document by the department that authorizes the taxpayer to claim a chile production tax credit against certain portions of the taxpayer's tax liabilities; and

(6) "qualifying event" means:

(a) the harvesting of chile on or after July 1, 2007; or

(b) the processing of chile on or after July 1, 2007."

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

"[NEW MATERIAL] CHILE PRODUCTION TAX CREDIT--CORPORATE INCOME TAX LIABILITY.--

A. A qualified taxpayer that files a corporate income tax return pursuant to the Corporate Income and Franchise Tax Act may claim a credit pursuant to this section against the taxpayer's corporate income tax liability. The tax credit that may be claimed pursuant to this section may be referred to as the "chile production tax credit".

B. A taxpayer that is authorized to claim a chile production tax credit to be taken against that taxpayer's gross receipts tax, compensating tax and withholding tax liabilities may claim the chile production tax credit if the department determines that a balance of the chile production tax credit remains and the taxpayer is not applying the balance against the taxpayer's gross receipts tax, compensating tax or withholding tax. A copy of the qualified taxpayer's chile production tax credit document shall be included with the corporate income tax return filed by the taxpayer at the time that the chile production tax credit is claimed. The taxpayer shall state on each return the amount of the chile production tax credit that the taxpayer is applying against the taxpayer's tax liability.

C. A qualified taxpayer may apply the balance of the taxpayer's chile production tax credit against the taxpayer's corporate income tax liability for the year in which the qualifying event occurred in an amount allowed by the department.

D. As used in this section:

(1) "chile processor" means a person that processes chile for commercial sale;

(2) "chile producer" means a person that grows chile for commercial sale;

(4) "process" means to roast, dry, freeze, can, cook or brine chile or to extract the color from chile;

(5) "qualified taxpayer" means a chile producer or chile processor that harvests or processes chile on or after July 1, 2007, and that is issued a chile production tax credit document by the department that authorizes the taxpayer to claim a chile production tax credit against certain portions of the taxpayer's tax liabilities; and

(6) "qualifying event" means:

(a) the harvesting of chile on or after July 1, 2007; or

(b) the processing of chile on or after July 1, 2007."

Section 3. [NEW MATERIAL] CHILE PRODUCTION TAX CREDIT--ELIGIBILITY--AMOUNT--GROSS RECEIPTS TAX, COMPENSATING TAX AND WITHHOLDING TAX--BALANCES.--

A. The tax credit provided in this section may be referred to as the "chile production tax credit". The chile production tax credit shall be administered by the department pursuant to the Tax Administration Act.

B. A person is eligible for the chile production tax credit if the person is:

(1) a chile producer and harvested chile on or after July 1, 2007; or

(2) a chile processor and processed chile after July 1, 2007.

C. The amount of the chile production tax credit shall equal:

(1) in regard to chile initially processed by drying, one hundred dollars ($100) per ton of dried chile harvested or processed by the taxpayer; and

(2) in regard to chile processed in any other manner, twenty dollars ($20.00) per ton of raw chile harvested or processed by the taxpayer.

D. A taxpayer may claim the chile production tax credit by submitting to the department documentation of the amount of chile harvested or processed by the taxpayer on a form prescribed by the department. The taxpayer shall provide any other information required by the department. Within one year from the end of the calendar year in which the qualifying event occurred, the taxpayer shall apply to the department for a determination of the amount of the chile production tax credit the taxpayer is allowed to claim.

E. The department shall determine the amount of tax credit that the taxpayer is allowed to claim for the qualifying event and shall issue to the qualified taxpayer a chile production tax credit document that states the amount of the chile production tax credit allowed to be claimed by the taxpayer.

F. A taxpayer, having applied for and been issued a chile production tax credit document by the department stating the amount of the chile production tax credit the qualified taxpayer is allowed to claim pursuant to this section, may claim the allowable amount of the chile production tax credit against the taxpayer's gross receipts tax, compensating tax or withholding tax liability. The taxpayer shall submit a copy of the chile production tax credit document to the department with each tax return to which the taxpayer applies the chile production tax credit. The taxpayer shall state on each return the amount of the chile production tax credit that the taxpayer is applying against the taxpayer's tax liability.

G. If the amount of the chile production tax credit allowed the qualified taxpayer by the department exceeds the total gross receipts tax, compensating tax and withholding tax liability of the taxpayer for the reporting period in which the claim is made, the taxpayer may carry over and claim the balance against the taxpayer's subsequent gross receipts tax, compensating tax or withholding tax liability for a period of three years from the last day of the year in which the qualifying event occurred. The balance remaining on a chile production tax credit document may be claimed as a chile production tax credit against the taxpayer's liability pursuant to the Income Tax Act or as a chile production tax credit against the taxpayer's liability pursuant to the Corporate Income and Franchise Tax Act.

H. As used in this section:

(1) "chile processor" means a person who processes chile for resale;

(2) "chile producer" means a person who grows chile for resale;

(3) "chile production tax credit document" means a document issued by the department stating the amount of chile production tax credit that a qualified taxpayer is authorized to apply against the taxpayer's gross receipts tax, compensating tax or withholding tax liability or the taxpayer's liability pursuant to the Income Tax Act or the Corporate Income and Franchise Tax Act;

(4) "department" means the taxation and revenue department;

(5) "process" means to roast, dry, freeze, can, cook or brine chile or to extract the color from chile;

(6) "qualified taxpayer" means a taxpayer who is a chile producer or chile processor who harvests or processes chile after June 30, 2007, who is issued a chile production tax credit document by the department that authorizes the taxpayer to claim a chile production tax credit against certain portions of the taxpayer's tax liabilities;

(7) "qualifying event" means:

(a) the harvesting of chile on or after July 1, 2007; or

(b) the processing of chile on or after July 1, 2007; and

(8) "taxpayer" means a person liable for payment of gross receipts tax, compensating tax or withholding tax or other taxes against which the balance of a chile production tax credit may be claimed.

Section 4. APPLICABILITY.--The provisions of Sections 1 and 2 of this act are applicable to taxable years beginning on or after January 1, 2007.

Section 5. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2007.

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