0001| AN ACT
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0002| RELATING TO TAXATION; PROVIDING A CREDIT AGAINST CORPORATE INCOME TAX;
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0003| ENACTING A SECTION OF THE NMSA 1978.
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0004|
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0005| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0006| Section 1. A new section of the Corporate Income and Franchise
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0007| Tax Act is enacted to read:
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0008| "INTERGOVERNMENTAL BUSINESS TAX CREDIT.--
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0009| A. With respect to the net income of a taxpayer engaged in
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0010| the transaction of business occurring after July 1, 1997 from a new
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0011| business on Indian land, the person who is liable for the payment of
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0012| the corporate income tax may claim a credit as provided in Subsection
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0013| D of this section against the corporate income tax for the aggregate
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0014| amount of tax paid to an Indian nation, tribe or pueblo located in
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0015| whole or in part within New Mexico.
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0016| B. The credit provided by this section may be referred to
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0017| as the "intergovernmental business tax credit".
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0018| C. As used in this section:
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0019| (1) "aggregate amount of tax" means the total of all
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0020| taxes imposed by an Indian nation, tribe or pueblo located in whole or
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0021| in part in New Mexico on income derived from the new business's
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0022| activity on Indian land, except a tax shall not be included in that
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0023| total if the tax is eligible for a credit pursuant to the provisions
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0024| of Section 7-29C-1 NMSA 1978 or any other intergovernmental tax credit
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0025| that provides a similar tax credit;
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0001| (2) "Indian land" means all land in New Mexico that
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0002| on March 1, 1997 was:
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0003| (a) within the exterior boundaries of an Indian
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0004| reservation or pueblo grant; or
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0005| (b) lands held in trust by the United States for
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0006| an individual Indian nation, tribe or pueblo;
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0007| (3) "new business" means a manufacturer or processor
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0008| that occupies a new business facility or a grower that commences
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0009| operation in New Mexico on or after July 1, 1997; and
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0010| (4) "new business facility" means a facility on
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0011| Indian land that satisfies the following requirements:
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0012| (a) the facility is employed by the taxpayer in
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0013| the operation of a revenue-producing enterprise. The facility shall
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0014| not be considered a "new business facility" in the hands of the
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0015| taxpayer if the taxpayer's only activity with respect to the facility
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0016| is to lease it to another person;
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0017| (b) the facility is acquired by or leased to the
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0018| taxpayer on or after January 1, 1997. The facility shall be deemed to
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0019| have been acquired by or leased to the taxpayer on or after the
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0020| specified date if the transfer of title to the taxpayer, the transfer
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0021| of possession pursuant to a binding contract to transfer title to the
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0022| taxpayer or the commencement of the term of the lease to the taxpayer
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0023| occurs on or after that date or if the facility is constructed,
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0024| erected or installed by or on behalf of the taxpayer, the
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0025| construction, erection or installation is completed on or after that
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0001| date;
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0002| (c) the facility is a newly acquired facility in
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0003| which the taxpayer is not continuing the operation of the same or a
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0004| substantially identical revenue-producing enterprise that previously
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0005| was in operation on the Indian land of the Indian nation, tribe or
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0006| pueblo where the facility is now located; a facility is a "newly
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0007| acquired facility" if the facility was acquired or leased by the
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0008| taxpayer from another person even if the facility was employed in a
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0009| revenue-producing enterprise on the Indian land of the same Indian
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0010| nation, tribe or pueblo immediately prior to the transfer of the title
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0011| to the facility to the taxpayer or immediately prior to the
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0012| commencement of the term of the lease of the facility to the taxpayer
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0013| by another person provided that the revenue-producing enterprise of
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0014| the previous occupant was not the same or substantially identical to
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0015| the taxpayer's revenue-producing enterprise; and
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0016| (d) the facility is not a replacement business
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0017| facility for a business facility that existed on the Indian land of
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0018| the Indian nation, tribe or pueblo where the business is now located.
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0019| D. The intergovernmental business tax credit shall be
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0020| determined separately for each reporting period and shall be equal to
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0021| fifty percent of the lesser of:
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0022| (1) the aggregate amount of tax paid by a taxpayer;
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0023| or
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0024| (2) the amount of the taxpayer's corporate income tax
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0025| due for the reporting period from the new business's activity
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0001| conducted on Indian land.
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0002| E. The department shall administer and interpret the
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0003| provisions of this section in accordance with the provisions of the
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0004| Tax Administration Act.
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0005| F. The burden of showing entitlement to a credit authorized
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0006| by this section is on the taxpayer claiming it, and the taxpayer shall
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0007| furnish to the appropriate tax collecting agency, in the manner
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0008| determined by the department, proof of payment of the aggregate amount
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0009| of tax on which the credit is based.
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0010| G. For a taxpayer qualifying for the credit provided by
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0011| this section that conducts business in New Mexico both on and off
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0012| Indian land, the taxpayer's corporate income tax liability derived
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0013| from the new business activity conducted on Indian land shall be equal
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0014| to the sum of the products of one-half of the taxpayer's New Mexico
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0015| corporate income tax liability before application of the credit
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0016| provided by this section multiplied by the payroll factor and one-half
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0017| of the taxpayer's New Mexico corporate income tax liability before
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0018| application of the credit provided by this section multiplied by the
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0019| property factor. The factors shall be determined as follows:
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0020| (1) the payroll factor is a fraction, the numerator
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0021| of which is the amount of compensation paid to employees employed
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0022| during the tax period by the taxpayer in his new business on Indian
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0023| land, and the denominator of which is the total amount of compensation
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0024| paid to employees employed during the tax period by the taxpayer in
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0025| all of New Mexico, including Indian land; and
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0001| (2) the property factor is a fraction, the numerator
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0002| of which is the average value of the taxpayer's real and tangible
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0003| personal property owned or rented and used in the new business on
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0004| Indian land in New Mexico during the tax period and the denominator of
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0005| which is the average value of all the taxpayer's real and tangible
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0006| property owned or rented and used in New Mexico, including on Indian
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0007| land, during the tax period."
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0008| Section 2. APPLICABILITY.--The provisions of this act apply to
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0009| taxable years beginning on or after January 1, 1997.
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0010| Section 3. EFFECTIVE DATE.--The effective date of the
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0011| provisions of this act is July 1, 1997.
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