SENATE BILL 1191
48th legislature - STATE OF NEW MEXICO - first session, 2007
INTRODUCED BY
James G. Taylor
AN ACT
RELATING TO TAXATION; AMENDING THE INVESTMENT CREDIT ACT TO PROVIDE FOR A TAX CREDIT FOR EQUIPMENT USED IN THE FARMING OR PROCESSING OF CHILE; EXCLUDING CHILE MANUFACTURING OPERATIONS FROM A CERTAIN EMPLOYMENT REQUIREMENT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 7-9A-3 NMSA 1978 (being Laws 1979, Chapter 347, Section 3, as amended) is amended to read:
"7-9A-3. DEFINITIONS.--As used in the Investment Credit Act:
A. "department" means the taxation and revenue department, the secretary of taxation and revenue or any employee of the department exercising authority lawfully delegated to that employee by the secretary;
B. "equipment" means an essential machine, mechanism or tool, or a component or fitting thereof, used directly and exclusively in a manufacturing operation and subject to depreciation for purposes of the Internal Revenue Code by the taxpayer carrying on the manufacturing operation. "Equipment" does not include any vehicle that leaves the site of the manufacturing operation for purposes of transporting persons or property or any property for which the taxpayer claims the credit pursuant to Section 7-9-79 NMSA 1978;
C. "manufacturing" means combining or processing components or materials, including recyclable materials, to increase their value for sale in the ordinary course of business, including genetic testing and production and chile farming, but not including:
(1) construction;
(2) farming, other than chile farming;
(3) power generation, except for electricity generation at a facility other than one for which both location approval and a certificate of convenience and necessity are required prior to commencing construction or operation of the facility, pursuant to the Public Utility Act [and the Electric Utility Industry Restructuring Act of 1999]; or
(4) processing natural resources, including
hydrocarbons;
D. "manufacturing operation" means a plant, including a genetic testing and production facility, employing personnel to perform production tasks, in conjunction with equipment not previously existing at the site, to produce goods;
E. "recyclable materials" means materials that would otherwise become solid waste if not recycled and that can be collected, separated or processed and placed in use in the form of raw materials or products; and
F. "taxpayer" means a person liable for payment of any tax, a person responsible for withholding and payment over or for collection and payment over of any tax or a person to whom an assessment has been made, if the assessment
remains unabated or the amount thereof has not been paid."
Section 2. Section 7-9A-7.1 NMSA 1978 (being Laws 1983, Chapter 206, Section 6, as amended) is amended to read:
"7-9A-7.1. EMPLOYMENT REQUIREMENTS.--
A. Except as provided in Subsection B of this section, prior to July 1, 2011, to be eligible to claim a credit pursuant to the Investment Credit Act, the taxpayer shall employ the equivalent of one full-time employee who has not been counted to meet this employment requirement for any prior claim in addition to the number of full-time employees employed on the day one year prior to the day on which the taxpayer applies for the credit for every:
(1) five hundred thousand dollars ($500,000), or portion of that amount, in value of qualified equipment claimed by the taxpayer in a taxable year in the same claim, up to a value of thirty million dollars ($30,000,000); and
(2) one million dollars ($1,000,000), or portion of that amount, in value of qualified equipment over thirty million dollars ($30,000,000) claimed by the taxpayer in a taxable year in the same claim.
B. The employment requirements of Subsection A of this section do not apply to manufacturing operations that produce or provide initial roasting, drying, freezing, canning, cooking, brining, color extracting or similar processing of raw chile.
[B.] C. After June 30, 2011, for every one hundred thousand dollars ($100,000) in value of qualified equipment claimed by a taxpayer in a taxable year, the taxpayer shall employ the equivalent of one full-time employee in addition to the number of full-time employees employed on the day one year prior to the day on which the taxpayer applies for credit.
[C.] D. The department may require evidence showing compliance with this section. The department may find that an additional employee meets the requirements of this section, although employed earlier than one year prior to the day on which the taxpayer applies for the credit, if [he] the employee was only being trained prior to that date or [his] the employee's employment [is] was necessitated by the use of the qualified equipment."
Section 3. TEMPORARY PROVISION--APPLICABILITY.--The provisions of this act apply to qualified equipment purchased or introduced into New Mexico on or after January 1, 2007.
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