HOUSE BILL 526
54th legislature - STATE OF NEW MEXICO - first session, 2019
Abbas Akhil and Christine Chandler and Jason C. Harper and Joseph L. Sanchez
RELATING TO TAXATION; AMENDING THE DEFINITION OF "CONTRACTOR" IN THE LABORATORY PARTNERSHIP WITH SMALL BUSINESS TAX CREDIT ACT; AMENDING NOTICE REQUIREMENTS TO A SMALL BUSINESS THAT RECEIVES ASSISTANCE FROM A NATIONAL LABORATORY OR THE LABORATORY'S CONTRACTOR; INCREASING THE AMOUNT OF CREDITS FOR EACH SMALL BUSINESS PURSUANT TO THE LABORATORY PARTNERSHIP WITH SMALL BUSINESS TAX CREDIT ACT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 7-9E-3 NMSA 1978 (being Laws 2000 (2nd S.S.), Chapter 20, Section 3, as amended) is amended to read:
"7-9E-3. DEFINITIONS.--As used in the Laboratory Partnership with Small Business Tax Credit Act:
(1) means a person that:
(a) has the capability to provide small business assistance; and
(b) may enter into a contract with a national laboratory to provide small business assistance; and
(a) a gas, water or electric utility owned or operated by a county, municipality or other political subdivision of the state; [or]
(b) a national, federal, state, Indian or other governmental unit or subdivision, or an agency, department or instrumentality of any of the foregoing; or
(c) an organization that: 1) demonstrates to the department that the organization has been granted exemption from the federal income tax by the United States commissioner of internal revenue as organizations described in Section 501(c)(3) of the United States Internal Revenue Code of 1986, as that section may be amended or renumbered; and 2) has a place of business in New Mexico;
B. "department" means the taxation and revenue department, the secretary of taxation and revenue or an employee of the department exercising authority lawfully delegated to that employee by the secretary;
C. "national laboratory" means a prime contractor designated as a national laboratory by act of congress that is operating a facility in New Mexico;
D. "qualified expenditure" means an expenditure by a national laboratory in providing small business assistance, limited to the following expenditures incurred in providing the assistance:
(1) employee salaries, wages, fringe benefits and employer payroll taxes;
(2) administrative costs related directly to the provision of small business assistance, the total of which is limited to forty-nine percent of employee salaries, wages, fringe benefits and employer payroll taxes;
(3) in-state travel expenses, including per diem and mileage at the internal revenue service standard rates; and
(4) supplies and services of contractors related to the provision of small business assistance;
E. "rural area" means an area of the state outside of the exterior boundaries of a class A county that has a net taxable value for rate-setting purposes for any property tax year of more than seven billion dollars ($7,000,000,000);
F. "small business" means a business in New Mexico that conforms to the definition of small business found in the federal Small Business Act; and
G. "small business assistance" means assistance rendered by a national laboratory related to the transfer of technology, including software, manufacturing, mining, oil and gas, environmental, agricultural, information and solar and other alternative energy source technologies. "Small business assistance" includes nontechnical assistance related to expanding the New Mexico base of suppliers, including training and mentoring individual small businesses; assistance in developing business systems to meet audit, reporting and quality assurance requirements; and other supplier development initiatives for individual small businesses."
SECTION 2. Section 7-9E-5 NMSA 1978 (being Laws 2000 (2nd S.S.), Chapter 20, Section 5, as amended) is amended to read:
"7-9E-5. ELIGIBILITY REQUIREMENTS.--A national laboratory is eligible for a tax credit in an amount equal to qualified expenditures if:
A. the small business assistance is rendered to a small business located in New Mexico;
B. the small business assistance is completed;
C. the small business certifies to the national laboratory that the small business assistance provided is not otherwise available to the small business at a reasonable cost through private industry;
D. the national laboratory provides written notice to each small business to which [it] the laboratory or a contractor of the laboratory is providing small business assistance [of the option] that the small business [has to obtain ownership of or] is entitled to license to [tangible or] intangible property developed from the small business assistance or can obtain ownership of tangible or intangible property developed from the small business assistance;
E. the national laboratory requires small businesses to which it is providing small business assistance to acknowledge only after the small business assistance is completed that the small business assistance has been rendered; and
F. the national laboratory provides forms for small business requests and for completion of small business assistance that are in accordance with the Laboratory Partnership with Small Business Tax Credit Act and other applicable state and federal laws."
SECTION 3. Section 7-9E-7 NMSA 1978 (being Laws 2000 (2nd S.S.), Chapter 20, Section 7, as amended) is amended to read:
"7-9E-7. TAX CREDITS--AMOUNTS.--A tax credit provided pursuant to the Laboratory Partnership with Small Business Tax Credit Act shall be in an amount equal to the qualified expenditure incurred by the national laboratory to provide small business assistance to a specific small business, not to exceed [ten thousand dollars ($10,000)] twenty thousand dollars ($20,000) for each small business [located outside of a rural area] for which small business assistance is rendered in a calendar year or [twenty thousand dollars ($20,000)] forty thousand dollars ($40,000) if the small business assistance was provided to a small business located in a rural area."
SECTION 4. Section 7-9E-8 NMSA 1978 (being Laws 2000 (2nd S.S.), Chapter 20, Section 8, as amended) is amended to read:
"7-9E-8. CLAIMING THE TAX CREDIT--LIMITATION.--
A. A national laboratory eligible for the tax credit pursuant to the Laboratory Partnership with Small Business Tax Credit Act may claim the amount of each tax credit by crediting that amount against gross receipts taxes otherwise due pursuant to the Gross Receipts and Compensating Tax Act. The tax credit shall be taken on each monthly gross receipts tax return filed by the laboratory against gross receipts taxes due the state and shall not impact any local government tax distribution. In no event shall the tax credits taken by an individual national laboratory exceed two million four hundred thousand dollars ($2,400,000) in a given calendar year.
B. Tax credits claimed pursuant to the Laboratory Partnership with Small Business Tax Credit Act by all national laboratories in the aggregate for qualified expenditures for a specific small business not located in a rural area shall not exceed [ten thousand dollars ($10,000)] twenty thousand dollars ($20,000).
C. Tax credits claimed pursuant to the Laboratory Partnership with Small Business Tax Credit Act by all national laboratories in the aggregate for qualified expenditures for a specific small business located in a rural area shall not exceed [twenty thousand dollars ($20,000)] forty thousand dollars ($40,000)."
SECTION 5. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2019.
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