44th legislature - STATE OF NEW MEXICO - second session, 2000

RELATING TO TAXATION; PROVIDING FOR TAX CREDITS FOR ENTERPRISE ZONE BUSINESSES.

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] CREDIT FOR ENTERPRISE ZONE BUSINESSES.--

A. A taxpayer who files a New Mexico individual income tax return, who is not a dependent of another individual and who is not claiming for the same period any credit under the Investment Credit Act, may claim a credit against tax liability attributable to net income from an unincorporated business facility, as that term is defined in the Enterprise Zone Act, that has commenced operations in an enterprise zone on or after the date the enterprise zone has been designated in accordance with that act if the taxpayer can furnish evidence satisfactory to the department that a minimum of five thousand dollars ($5,000) has been invested for each job created. The credit provided pursuant this section, not to exceed fifty percent of the tax due from net income of the business facility, shall be as follows:

(1) an amount not to exceed five hundred dollars ($500) for each economically disadvantaged or long-term unemployed worker, as defined in the Enterprise Zone Act, employed by the taxpayer in the business facility for at least thirty hours per week for at least six months during the taxable year for which the credit is claimed; and

(2) an amount not to exceed two hundred fifty dollars ($250) for each resident of the state, who is not an economically disadvantaged or long-term unemployed worker as defined in the Enterprise Zone Act, employed by the taxpayer in the business facility for at least thirty hours per week for at least three months during the taxable year for which the credit is claimed.

B. For the purposes of this section, a taxpayer having income from both within and without enterprise zones shall separately account for income from business facilities within the enterprise zones and the credit provided by this section may be deducted only from the income tax liability attributable to income from business facilities within enterprise zones.

C. A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the credit that would have been allowed on a joint return.

D. A taxpayer who otherwise qualifies and claims a credit for a partnership of which the taxpayer is a member may claim a credit only in proportion to his interest in the partnership, and the total credit claimed by all members of the partnership shall not exceed in the aggregate the amounts of the credit provided in Subsection A of this section.

E. Claims for the credit provided in this section shall be limited to the taxable year in which the business facility commenced operations and the four following taxable years.

F. To support a claim for credit under this section, the taxpayer shall submit to the department a statement from the labor department verifying that the employee with respect to whom a credit is being claimed was employed by the taxpayer for at least thirty hours per week, or the equivalent thereof, for a period of at least three months. In addition, to support a claim submitted pursuant to Paragraph (1) of Subsection A of this section, the taxpayer shall submit a statement to the taxation and revenue department from the labor department verifying that the employee with respect to whom a credit is being claimed was an economically disadvantaged worker or long-term unemployed worker, as those terms are defined in the Enterprise Zone Act on the day upon which the employee was hired by the taxpayer."

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

"[NEW MATERIAL] CREDIT FOR ENTERPRISE ZONE BUSINESSES.--

A. A taxpayer who files a New Mexico corporate income tax return and who is not claiming for the same period any credit under the Investment Credit Act may claim a credit against tax liability attributable to net income from an incorporated business facility, as that term is defined in the Enterprise Zone Act, that has commenced operations in an enterprise zone on or after the date the enterprise zone has been designated in accordance with that act if the taxpayer can furnish evidence satisfactory to the department that a minimum of five thousand dollars ($5,000) has been invested for each job created. The credit provided pursuant to this section, not to exceed fifty percent of the tax due from net income of the business facility, shall be as follows:

(1) an amount not to exceed five hundred dollars ($500) for each economically disadvantaged or long- term unemployed worker, as defined in the Enterprise Zone Act, employed by the taxpayer in the business facility for at least thirty hours per week for at least three months during the taxable year for which the credit is claimed; and

(2) an amount not to exceed two hundred fifty dollars ($250) for each resident of the state, who is not an economically disadvantaged or long-term unemployed worker, as defined in the Enterprise Zone Act, employed by the taxpayer in the business facility for at least thirty hours per week for at least three months during the taxable year for which the credit is claimed.

B. For the purpose of this section, a taxpayer having income from both within and without enterprise zones shall separately account for income from business facilities within enterprise zones, and the credit provided by this section maybe deducted only from the corporate income tax liability attributable to income from business facilities within enterprise zones.

C. Claims for the credit provided in this section shall be limited to the taxable year in which the business facility commenced operations and the four following taxable years.

D. To support a claim for credit under this section, the taxpayer shall submit to the department a statement from the labor department verifying that the employee with respect to whom a credit is being claimed was employed by the taxpayer for at least thirty hours per week, or the equivalent thereof, for a period of at least three months. In addition, to support a claim submitted pursuant to Paragraph (1) of Subsection A of this section, the taxpayer shall submit a statement to the taxation and revenue department from the labor department verifying that the employee with respect to whom a credit is being claimed was an economically disadvantaged worker or long-term unemployed worker, as those terms are defined in the Enterprise Zone Act, on the day upon which the employee was hired by the taxpayer."

Section 3. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2000.