HB0436

HOUSE BILL 436

56th legislature - STATE OF NEW MEXICO - first session, 2023

INTRODUCED BY

Raymundo Lara and Kristina Ortez and Carrie Hamblen

AN ACT

RELATING TO TAXATION; PROVIDING AN INCOME TAX CREDIT AND CORPORATE INCOME TAX CREDIT FOR PURCHASES OF BLENDED BIODIESEL; PROVIDING A GROSS RECEIPTS TAX DEDUCTION AND COMPENSATING TAX DEDUCTION FOR THE SALE AND USE OF BLENDED BIODIESEL.

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] BLENDED BIODIESEL INCOME TAX CREDIT.--

A. Prior to January 1, 2028, a taxpayer who is not a dependent of another individual and who purchases blended biodiesel in New Mexico may claim a credit against the taxpayer's tax liability imposed pursuant to the Income Tax Act in an amount equal to fifty cents ($.50) for each gallon purchased. The tax credit provided by this section may be referred to as the "blended biodiesel income tax credit".

B. A taxpayer may claim the credit provided by this section for the taxable year in which the taxpayer purchases blended biodiesel. To receive the credit, a taxpayer shall apply to the department on forms and in the manner prescribed by the department within twelve months following the calendar year in which the blended biodiesel is purchased. The application shall include proof the taxpayer purchased blended biodiesel as provided in this section.

C. That portion of credit claimed by a taxpayer that exceeds the taxpayer's income tax liability in the taxable year in which the credit is claimed may be carried forward for a period of three consecutive years.

D. Married individuals filing separate returns for a taxable year for which they could have filed a joint return may each claim only one-half of the credit that would have been claimed on a joint return.

E. A taxpayer may be allocated the right to claim the credit provided by this section in proportion to the taxpayer's ownership interest if the taxpayer owns an interest in a business entity that is taxed for federal income tax purposes as a partnership or limited liability company and that business entity has met all of the requirements to be eligible for the credit. The total credit claimed by all members of the partnership or limited liability company shall not exceed the allowable credit pursuant to this section.

F. A taxpayer allowed a credit pursuant to this section shall report the amount of credit to the department on a form and in a manner required by the department.

G. The department shall compile an annual report on the credit provided by this section that shall include the number of taxpayers approved by the department to receive the credit, the aggregate amount of credits approved and any other information necessary to evaluate the credit. The department shall compile and present the annual report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the cost of the credit.

H. As used in this section:

(1) "biodiesel" means a renewable, biodegradable, mono alkyl ester combustible liquid fuel that is derived from agricultural plant oils or animal fats and that meets commonly known standards in the industry for biodiesel fuel, B100 or B99 blend stock for distillate fuels; and

(2) "blended biodiesel" means a diesel engine fuel that contains at least five percent biodiesel."

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

"[NEW MATERIAL] BLENDED BIODIESEL CORPORATE INCOME TAX CREDIT.--

A. Prior to January 1, 2028, a taxpayer that purchases blended biodiesel in New Mexico may claim a credit against the taxpayer's tax liability imposed pursuant to the Corporate Income and Franchise Tax Act in an amount equal to fifty cents ($.50) for each gallon purchased. The tax credit provided by this section may be referred to as the "blended biodiesel corporate income tax credit".

D. A taxpayer allowed a credit pursuant to this section shall report the amount of credit to the department on a form and in a manner required by the department.

E. The department shall compile an annual report on the credit provided by this section that shall include the number of taxpayers approved by the department to receive the credit, the aggregate amount of credits approved and any other information necessary to evaluate the credit. The department shall compile and present the annual report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the cost of the credit.

F. As used in this section:

(2) "blended biodiesel" means a diesel engine fuel that contains at least five percent biodiesel."

SECTION 3. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

"[NEW MATERIAL] DEDUCTION--GROSS RECEIPTS TAX--COMPENSATING TAX.--

A. Receipts for the sale of blended biodiesel may be deducted from gross receipts.

B. The value of blended biodiesel may be deducted in computing compensating tax due.

C. A taxpayer allowed a deduction pursuant to this section shall report the amount of the deduction to the department on a form and in a manner required by the department.

D. The department shall compile an annual report on the deductions provided by this section that shall include the number of taxpayers approved by the department to receive the deduction, the aggregate amount of deductions approved and any other information necessary to evaluate the deduction. The department shall compile and present the annual report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the cost of the deductions.

E. As used in this section:

(2) "blended biodiesel" means a diesel engine fuel that contains at least five percent biodiesel."

SECTION 4. APPLICABILITY.--The provisions of Sections 1 and 2 of this act apply to taxable years beginning on or after January 1, 2023.

SECTION 5. EFFECTIVE DATE.--The effective date of the provisions of Section 3 of this act is July 1, 2023.

- 6 -