0001|                         SENATE BILL 86
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0002|     42ND LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION,
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0003|     1996
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0004|                         INTRODUCED BY
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0005|                     ELIZABETH T. STEFANICS
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0006|     
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0007|                                
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0008|     
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0009|     
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0010|     
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0011|                             AN ACT
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0012|     RELATING TO TAXATION; PROVIDING A TAX CREDIT FOR SMALL
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0013|     BUSINESSES THAT PAY SEVENTY-FIVE PERCENT OF EMPLOYEE HEALTH
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0014|     INSURANCE PREMIUMS.
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0015|     
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0016|     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0017|       Section 1.  A new section of the Income Tax Act is enacted
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0018|     to read:
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0019|       "[<u>NEW MATERIAL</u>]  CREDIT--EMPLOYEE HEALTH INSURANCE
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0020|     PREMIUMS PAID BY SMALL BUSINESS EMPLOYERS.--
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0021|            A.  Any taxpayer who files an individual New Mexico
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0022|     income tax return, who is engaged in a small business and who
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0023|     paid at least seventy-five percent of the health insurance
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0024|     premiums for one or more employees of the taxpayer in the
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0025|     taxable year for which the return is filed may claim a credit in
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0001|     an amount equal to ten percent of the aggregate amount of such
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0002|     premiums paid by the taxpayer in the taxable year.
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0003|            B.  A husband and wife who file separate returns for
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0004|     a taxable year in which they could have filed a joint return may
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0005|     each claim only one-half of the credit pursuant to Subsection A
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0006|     of this section that would have been allowed on a joint return.
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0007|            C.  A taxpayer who otherwise qualifies and claims a
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0008|     credit pursuant to Subsection A of this section and who is a
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0009|     member of a partnership or business association that is the
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0010|     employer paying the employee health insurance premiums may claim
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0011|     a credit only in proportion to his interest in the partnership
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0012|     or association.  The total credit claimed by all members of the
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0013|     partnership or association shall not exceed an amount equal to
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0014|     ten percent of the aggregate amount of qualifying employee
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0015|     health insurance premiums paid by the partnership or association
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0016|     in the taxable year.
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0017|            D.  The credit provided in this section may only be
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0018|     deducted from the taxpayer's income tax liability for the
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0019|     taxable year for which the credit is claimed.
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0020|            E.  As used in this section:
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0021|                 (1)  "health insurance premium" means "health
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0022|     insurance" and "premium" as those terms are defined in the New
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0023|     Mexico Insurance Code; and
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0024|                 (2)  "small business" means any individual or
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0025|     legal entity employing twenty-five or fewer employees in New
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0001|     Mexico who files an income tax return under the Income Tax Act."
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0002|       Section 2.  A new section of the Corporate Income and
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0003|     Franchise Tax Act is enacted to read:
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0004|       "[<u>NEW MATERIAL</u>]  CREDIT--EMPLOYEE HEALTH INSURANCE
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0005|     PREMIUMS PAID BY SMALL BUSINESS EMPLOYER.--
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0006|            A.  Any taxpayer who files a corporate income tax
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0007|     return and who is engaged in a small business and paid at least
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0008|     seventy-five percent of the health insurance premiums for one or
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0009|     more employees of the taxpayer in the taxable year for which the
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0010|     return is filed may claim a credit in an amount equal to ten
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0011|     percent of the aggregate amount of such premiums paid by the
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0012|     taxpayer in the taxable year.
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0013|            B.  The credit provided in this section may only be
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0014|     deducted from the taxpayer's corporate income tax liability for
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0015|     the taxable year for which the credit is claimed.
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0016|            C.  As used in this section:
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0017|                 (1)  "health insurance premium" means "health
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0018|     insurance" and "premium" as those terms are defined in the New
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0019|     Mexico Insurance Code; and
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0020|                 (2)  "small business" means any corporation
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0021|     employing twenty-five or fewer employees in New Mexico that
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0022|     files an income tax return under the Corporate Income and
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0023|     Franchise Tax Act."
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0024|       Section 3.  APPLICABILITY.--The provisions of this act
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0025|     apply to taxable years beginning on or after January 1, 1997.
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0001|                                    
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0002|   
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0003|                    FORTY-SECOND LEGISLATURE
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0004|                      SECOND SESSION, 1996
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0005|   
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0006|   
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0007|                                              JANUARY 23, 1996
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0008|   
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0009|   Mr. President:
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0010|   
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0011|     Your COMMITTEES' COMMITTEE, to whom has been referred
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0012|   
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0013|                           SENATE BILL 86
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0014|   
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0015|   has had it under consideration and finds same to be GERMANE, PURSUANT
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0016|   TO CONSTITUTIONAL PROVISIONS, and thence referred to the WAYS AND
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0017|   MEANS COMMITTEE.
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0018|   
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0019|                              Respectfully submitted,
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0020|   
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0021|   
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0022|   
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0023|   
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0024|                              __________________________________
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0025|                              SENATOR MANNY M. ARAGON, Chairman 
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0001|   
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0002|   
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0003|   
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0004|   Adopted_______________________ Not Adopted_______________________
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0005|             (Chief Clerk)                        (Chief Clerk)
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0006|   
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0007|   
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0008|                     Date ________________________
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0009|   
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0010|   
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0011|   
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0012|   S0086CC1
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