0001| SENATE BILL 975
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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| L. SKIP VERNON
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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 TAX
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0012| ADMINISTRATION ACT TO PROVIDE FOR VARIABLE INTEREST RATES.
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0013|
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0014| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0015| Section 1. Section 7-1-67 NMSA 1978 (being Laws 1965,
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0016| Chapter 248, Section 68, as amended) is amended to read:
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0017| "7-1-67. INTEREST ON DEFICIENCIES.--
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0018| A. If any tax imposed is not paid on or before the
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0019| day on which it becomes due, interest shall be paid to the
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0020| state on such amount from the first day following the day on
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0021| which the tax becomes due, without regard to any extension of
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0022| time or installment agreement, until it is paid, except that:
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0023| (1) for any income tax imposed on a member of
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0024| the armed services of the United States serving in a combat
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0025| zone under orders of the president of the United States,
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0001| interest shall accrue only for the period beginning the day
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0002| after any applicable extended due date if the tax is not paid;
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0003| (2) if the amount of interest due at the time
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0004| payment is made is less than one dollar ($1.00), then no
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0005| interest shall be due; and
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0006| (3) if demand is made for payment of any tax,
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0007| including accrued interest, and if such tax is paid within ten
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0008| days after the date of such demand, no interest on the amount
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0009| so paid shall be imposed for the period after the date of the
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0010| demand.
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0011| B. Interest due to the state under Subsection A or
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0012| [D] E of this section shall be:
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0013| (1) for periods prior to January 1, 1998, at
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0014| the rate of fifteen percent a year, computed at the rate of one
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0015| and one-fourth percent per month or any fraction thereof;
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0016| [provided that if a different rate is specified by a compact
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or other interstate agreement to which New Mexico is a party,
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[then] that rate shall be applied to amounts due under the
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compact or other agreement] and
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0020| (2) for calendar years beginning on or after
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0021| January 1, 1998, at a rate equal to the underpayment rate
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0022| determined by the internal revenue service in accordance with
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0023| Section 6621 of the Internal Revenue Code for the calendar
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0024| quarter immediately preceding the calendar year to which the
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0025| rate is to apply. However, if no underpayment rate is
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0001| determined for that period, the rate for the calendar year
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0002| shall be the prime rate on the first business day of that
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0003| calendar year plus one hundred basis points, computed at one-
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0004| twelfth of that rate per month. If a monthly period for which
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0005| interest is being calculated lies in two calendar years, the
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0006| interest rate applicable to the earlier calendar year shall
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0007| apply to the whole monthly period. As used in this paragraph,
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0008| "prime rate" means the nationally published prime rate
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0009| representing the base rate on corporate loans posted by at
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0010| least seventy-five percent of the nation's thirty largest
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0011| banks.
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0012| C. Notwithstanding the provisions in Subsection B
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0013| of this section, if a different rate of interest is specified
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0014| by a compact or other interstate agreement to which New Mexico
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0015| is a party, that rate shall be applied to amounts due under the
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0016| compact or other agreement.
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0017| [C.] D. Nothing in this section shall be
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0018| construed to impose interest on interest or interest on the
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0019| amount of any penalty.
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0020| [D.] E. If any tax required to be paid in
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0021| accordance with Section 7-1-13.1 NMSA 1978 is not paid in the
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0022| manner required by that section, interest shall be paid to the
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0023| state on the amount required to be paid in accordance with
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0024| Section 7-1-13.1 NMSA 1978. If interest is due under this
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0025| subsection and is also due under Subsection A of this section,
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0001| interest shall be due and collected only pursuant to Subsection
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0002| A of this section."
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0003| Section 2. Section 7-1-68 NMSA 1978 (being Laws 1965,
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0004| Chapter 248, Section 69, as amended) is amended to read:
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0005| "7-1-68. INTEREST ON OVERPAYMENTS.--
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0006| A. As provided in this section, interest shall be
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0007| allowed and paid on the amount of tax overpaid by a person that
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0008| is subsequently refunded or credited to that person.
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0009| B. Interest payable on overpayments of tax shall be
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0010| [paid]:
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0011| (1) for periods prior to January 1, 1998, at
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0012| the rate of fifteen percent a year, computed at the rate of one
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0013| and one-fourth percent per month or fraction thereof;
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0014| [provided that if a different rate is specified by a compact
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or other interstate agreement to which New Mexico is a party,
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then that rate shall be applied to amounts due under the
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compact or other agreement] and
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0018| (2) for calendar years beginning on or after
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0019| January 1, 1998, at a rate equal to the underpayment rate
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0020| determined by the internal revenue service in accordance with
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0021| Section 6621 of the Internal Revenue Code for the calendar
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0022| quarter immediately preceding the calendar year to which the
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0023| rate is to apply. However, if no underpayment rate is
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0024| determined for that period, the rate for the calendar year
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0025| shall be the prime rate published on the first business day of
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0001| that calendar year plus one hundred basis points, computed at
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0002| one-twelfth of that rate per month. If a monthly period for
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0003| which interest is being calculated lies in two calendar years,
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0004| the interest rate applicable to the earlier calendar year shall
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0005| apply to the whole monthly period. As used in this paragraph,
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0006| "prime rate" means the nationally published prime rate
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0007| representing the base rate on corporate loans posted by at
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0008| least seventy-five percent of the nation's thirty largest
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0009| banks.
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0010| C. Notwithstanding the provisions in Subsection B
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0011| of this section, if a different rate of interest is specified
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0012| by a compact or other interstate agreement to which New Mexico
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0013| is a party, that rate shall be applied to amounts due under the
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0014| compact or other agreement.
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0015| [C.] D. Unless otherwise provided by this
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0016| section, interest on an overpayment not arising from an
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0017| assessment by the department shall be paid from the date the
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0018| claim for refund was made until a date preceding by not more
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0019| than thirty days the date on which the amount thereof is
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0020| credited or refunded to any person; interest on an overpayment
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0021| arising from an assessment by the department shall be paid from
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0022| the date overpayment was made until a date preceding by not
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0023| more than thirty days the date on which the amount thereof is
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0024| credited or refunded to any person.
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0025| [D.] E. No interest shall be allowed or paid
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0001| with respect to an amount credited or refunded if:
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0002| (1) the amount of interest due is less than
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0003| one dollar ($1.00);
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0004| (2) the credit or refund is made within
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0005| seventy-five days of the date of the claim for refund of income
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0006| tax, pursuant to either the Income Tax Act or the Corporate
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0007| Income and Franchise Tax Act, for the tax year immediately
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0008| preceding the tax year in which the claim is made;
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0009| (3) the credit or refund is made within one
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0010| hundred twenty days of the date of the claim for refund of
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0011| income tax, pursuant to the Income Tax Act or the Corporate
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0012| Income and Franchise Tax Act [or the Banking and Financial
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Corporations Tax Act], for any tax year more than one year
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0014| prior to the year in which the claim is made;
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0015| (4) Sections 6611(f) and 6611(g) of the
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0016| [United States] Internal Revenue Code [of 1986], as those
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0017| sections may be amended or renumbered, prohibit payment of
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0018| interest for federal income tax purposes;
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0019| (5) the credit or refund is made within sixty
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0020| days of the date of the claim for refund of any tax other than
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0021| income tax; or
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0022| (6) gasoline tax is refunded or credited under
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0023| the Gasoline Tax Act to users of gasoline off the highways."
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0024| Section 3. EFFECTIVE DATE.--The effective date of the
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0025| provisions of this act is July 1, 1997.
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