0001| SENATE BILL 687
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0002| 43rd legislature - STATE OF NEW MEXICO - first session, 1997
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0003| INTRODUCED BY
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0004| STUART INGLE
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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| AN ACT
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0011| RELATING TO TAXATION; CHANGING CERTAIN PROVISIONS OF THE INCOME
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0012| TAX ACT PERTAINING TO ESTIMATED TAX PAYMENTS; DECLARING AN
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0013| EMERGENCY.
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0014|
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0015| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0016| Section 1. Section 7-2-12.2 NMSA 1978 (being Laws 1996,
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0017| Chapter 17, Section 1) is amended to read:
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0018| "7-2-12.2. ESTIMATED TAX DUE--PAYMENT OF ESTIMATED TAX--
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0019| PENALTY.--
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0020| A. Except as otherwise provided in this section,
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0021| every individual who is required to file an income tax return
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0022| under the Income Tax Act shall pay the required annual payment
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0023| in installments [The amount of any required installment shall
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be twenty-five percent of the required annual payment]
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0025| through either withholding or estimated tax payments.
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0001| B. For the purposes of this section:
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0002| (1) "required annual payment" means the lesser
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0003| of:
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0004| (a) ninety percent of the tax shown on
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0005| the return of the taxable year or, if no return is filed,
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0006| ninety percent of the tax for the taxable year; or
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0007| (b) one hundred percent of the tax shown
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0008| on the return for the preceding taxable year if the preceding
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0009| taxable year was a taxable year of twelve months and the
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0010| taxpayer filed a New Mexico tax return for that preceding
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0011| taxable year; and
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0012| (2) "tax" means the tax imposed under Section
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0013| 7-2-3 NMSA 1978 less any amount allowed for credits provided by
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0014| Sections 7-2-13 and 7-2-18.1 through 7-2-18.4 NMSA 1978 and for
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0015| any applicable tax rebates provided by the Income Tax Act.
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0016| C. There shall be four required installments for
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0017| each taxable year. If a taxpayer is not liable for estimated
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0018| tax payments on March 31, but becomes liable for estimated tax
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0019| at some point after March 31, he must make estimated tax
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0020| payments as follows:
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0021| (1) if the taxpayer becomes required to pay
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0022| estimated tax after March 31 and before June 1, fifty percent
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0023| of the required annual payment shall be paid on June 15,
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0024| twenty-five percent on September 15 and twenty-five percent on
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0025| January 15 of the following taxable year;
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0001| (2) if the taxpayer becomes required to pay
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0002| estimated tax after May 31, but before September 1, seventy-
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0003| five percent of the required annual payment shall be paid on
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0004| September 15 and twenty-five percent on January 15 of the
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0005| following taxable year; and
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0006| (3) if the taxpayer becomes required to pay
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0007| estimated tax after August 31, one hundred percent of the
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0008| required annual payment shall be paid on January 15 of the
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0009| following taxable year.
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0010| D. Except as otherwise provided in this section,
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0011| for taxpayers reporting on a calendar year basis, [the due
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dates for the installments are] estimated payments of the
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0013| required annual payment are due on or before April 15, June 15
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0014| and September 15 of the taxable year and January 15 of the
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0015| following taxable year. For taxpayers reporting on a fiscal
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0016| year other than a calendar year, the due dates for the
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0017| installments are the fifteenth day of the fourth, sixth and
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0018| ninth months of the fiscal year and the fifteenth day of the
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0019| first month following the fiscal year.
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0020| E. A rancher or farmer who expects to receive at
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0021| least two-thirds of his gross income for the taxable year from
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0022| ranching or farming, or who has received at least two-thirds of
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0023| his gross income for the previous taxable year from ranching or
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0024| farming, may:
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0025| (1) pay the required annual payment for the
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0001| taxable year in one installment on January 15 of the following
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0002| taxable year; or
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0003| (2) on or before March 1 of the following
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0004| taxable year, file a return for the taxable year and pay in
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0005| full the amount computed on the return as payable.
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0006| No penalty under Subsection G of this section shall be
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0007| imposed unless the rancher or farmer underpays his tax by more
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0008| than one-third. If a joint return is filed, a rancher or
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0009| farmer shall consider his spouse's gross income in determining
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0010| whether at least two-thirds of gross income is from ranching or
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0011| farming.
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0012| [D.] F. For the purposes of [applying] this
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0013| section, the amount of tax deducted and withheld with respect
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0014| to a taxpayer under the Withholding Tax Act shall be deemed a
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0015| payment of estimated tax. An equal part of the amount of
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0016| withheld tax shall be deemed paid on each due date for the
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0017| applicable taxable year unless the taxpayer establishes the
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0018| dates on which all amounts were actually withheld, in which
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0019| case the amounts withheld shall be deemed payments of estimated
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0020| tax on the dates on which the amounts were actually withheld.
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0021| The taxpayer may apply the provisions of this subsection
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0022| separately to wage withholding and any other amounts withheld
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0023| under the Withholding Tax Act.
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0024| [E.] G. Except as otherwise provided in this
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0025| section, in the case of any underpayment of [estimated tax]
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0001| the required annual payment by a taxpayer, there shall be
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0002| added to the tax an amount as penalty determined by applying
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0003| the rate specified in Subsection B of Section 7-1-67 NMSA 1978
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0004| to the amount of the underpayment for the period of the
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0005| underpayment, provided:
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0006| (1) the amount of the underpayment shall be
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0007| the excess of the amount of the required [installment]
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0008| annual payment over the amount, if any, [of the
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installment] paid on or before the due date for the
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0010| installment;
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0011| (2) the period of the underpayment runs from
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0012| the due date for the installment to whichever of the following
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0013| dates is earlier:
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0014| (a) the fifteenth day of the fourth
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0015| month following the close of the taxable year; or
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0016| (b) with respect to any portion of the
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0017| underpayment, the date on which the portion was paid; and
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0018| (3) [for the purposes of Subparagraph (b) of
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Paragraph (2) of this subsection] a payment of estimated tax
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0020| shall be credited against unpaid [required] or underpaid
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0021| installments in the order in which the installments are
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0022| required to be paid.
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0023| [F.] H. No penalty shall be imposed under
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0024| Subsection [E] G of this section for any taxable year if:
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0025| (1) the difference between the following is
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0001| less than five hundred dollars ($500):
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0002| (a) the tax shown on the return for the
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0003| taxable year or, when no return is filed, the tax for the
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0004| taxable year; and
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0005| (b) any amount withheld under the
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0006| provisions of the Withholding Tax Act for that taxpayer for
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0007| that taxable year;
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0008| (2) the individual's preceding taxable year
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0009| was a taxable year of twelve months, the individual did not
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0010| have any tax liability for the preceding taxable year and the
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0011| individual was a resident of New Mexico for the entire taxable
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0012| year; [or]
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0013| (3) through either withholding or estimated
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0014| tax payments, the individual paid the required annual payment
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0015| as defined in Subsection B of this section; or
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0016| [(3)] (4) the secretary determines that
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0017| the underpayment was not due to fraud, negligence or disregard
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0018| of rules and regulations.
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0019| [G.] I. If, on or before January 31 of the
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0020| following taxable year, the taxpayer files a return for the
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0021| taxable year and pays in full the amount computed on the return
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0022| as payable, then no penalty under Subsection [E] G of this
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0023| section shall be imposed with respect to any underpayment of
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0024| the fourth required installment for the taxable year.
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0025| [H.] J. This section shall be applied to
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0001| taxable years of less than twelve months in the manner
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0002| determined by regulation or instruction of the secretary.
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0003| [I.] K. Except as otherwise provided in
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0004| Subsection [J] L of this section, this section applies to
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0005| any estate or trust.
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0006| [J.] L. This section does not apply to any
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0007| trust that is subject to the tax imposed by Section 511 of the
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0008| Internal Revenue Code or that is a private foundation. With
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0009| respect to any taxable year ending before the date two years
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0010| after the date of the decedent's death, this section does not
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0011| apply to:
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0012| (1) the estate of the decedent; or
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0013| (2) any trust all of which was treated under
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0014| Subpart E of Part I of Subchapter J of Chapter 1 of the
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0015| Internal Revenue Code as owned by the decedent and to which the
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0016| residue of the decedent's estate will pass under the decedent's
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0017| will or, if no will is admitted to probate, that is the trust
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0018| primarily responsible for paying debts, taxes and expenses of
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0019| administration."
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0020| Section 2. APPLICABILITY.--The provisions of this act
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0021| apply to taxable years beginning on or after January 1, 1997.
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0022| Section 3. EMERGENCY.--It is necessary for the public
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0023| peace, health and safety that this act take effect immediately.
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0024|
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0025|
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0001| FORTY-THIRD LEGISLATURE
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0002| FIRST SESSION, 1997 SB 687/a
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0003|
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0004|
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0005| February 17, 1997
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0006|
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0007| Mr. President:
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0008|
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0009| Your WAYS AND MEANS COMMITTEE, to whom has been
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0010| referred
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0011|
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0012| SENATE BILL 687
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0013|
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0014| has had it under consideration and reports same with
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0015| recommendation that it DO PASS, amended as follows:
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0016|
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0017| l. On page 2, line 23, after "on" insert "or before".
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0018|
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0019| 2. On page 2, line 24, after both occurrences of "on"
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0020| insert "or before".
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0021|
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0022| 3. On page 3, line 3, after "on" insert "or before".
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0023|
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0024| 4. On page 3, line 4, after "on" insert "or before".
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0025|
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0001| 5. On page 3, line 8, after "on" insert "or before".
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0002|
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0003| 6. On page 4, line 1, after "on" insert "or before".
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0004|
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0005| 7. On page 6, line 23, after "months" insert "and to
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0006| taxpayers
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0007| reporting on a fiscal year other than a calendar year".,
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0008|
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0009| and thence referred to the FINANCE COMMITTEE.
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0010|
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0011| Respectfully submitted,
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0012|
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0013|
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0014|
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0015| __________________________________
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0016| Carlos R. Cisneros, Chairman
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0017|
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0018|
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0019|
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0020| Adopted_______________________ Not
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0021| Adopted_______________________
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0022| (Chief Clerk) (Chief Clerk)
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0023|
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0024|
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0025| Date ________________________
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0001|
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0002|
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0003| The roll call vote was 7 For 0 Against
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0004| Yes: 7
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0005| No: 0
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0006| Excused: McSorley, Nava
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0007| Absent: None
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0013| S0687WM1
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