45th legislature - STATE OF NEW MEXICO - second session, 2002

RELATING TO TAXATION; PROVIDING AN INCOME TAX CREDIT FOR SMALL BUSINESSES THAT REMOVE BARRIERS AND MAKE OTHER MODIFICATIONS TO PROVIDE ACCESS TO DISABLED INDIVIDUALS AND ENABLE THE BUSINESS TO COMPLY WITH THE AMERICANS WITH DISABILITIES ACT OF 1990.

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--SMALL BUSINESSES--DISABLED ACCESS EXPENDITURES.--

A. To encourage small businesses to provide access to disabled individuals and to comply with the Americans with Disabilities Act of 1990, a taxpayer that files an individual New Mexico income tax return and that owns an eligible small business or an owner of a pass-through business entity that is an eligible small business that has claimed a disabled access credit for eligible access expenditures made in the taxable year, pursuant to Section 44 of the Internal Revenue Code, may claim a credit in an amount equal to twenty-five percent of those eligible access expenditures made in the taxable year, not to exceed five thousand dollars ($5,000).

B. The taxpayer may claim the credit provided in this section for each taxable year in which the taxpayer qualifies as an eligible small business and claims the federal disabled access credit for eligible access expenditures.

C. The credit provided in this section may only be deducted from the taxpayer's income tax liability. Any portion of the maximum tax credit provided by this section that remains unused at the end of the taxpayer's taxable year may be carried forward for two consecutive taxable years; provided that the total tax credits claimed under this section shall not exceed the maximum amount of credit allowed for any taxable year.

D. 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.

E. A taxpayer that otherwise qualifies and claims a credit for qualified expenditures made by a pass-through business entity of which the taxpayer is an owner may claim a credit only in proportion to his ownership share of the pass-through business entity. The total credit claimed by all members of the pass-through business entity shall not exceed the aggregate amount of credit allowed pursuant to this section.

F. As used in this section:

(1) "owner" means:

(a) a partner in a partnership not taxed as a corporation for federal income tax purposes for the taxable year;

(b) a shareholder of an S corporation or of a corporation other than an S corporation that is not taxed as a corporation for federal income tax purposes for the taxable year;

(c) a member of a limited liability company; or

(d) any similar person holding an ownership interest in a pass-through business entity; and

(2) "pass-through business entity" means any business association other than:

(a) a sole proprietorship;

(b) an estate or trust; or

(c) a corporation, limited liability company, partnership or other entity not a sole proprietorship taxed as a corporation for federal income tax purposes for the taxable year."

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

"[NEW MATERIAL] CREDIT--SMALL BUSINESSES--DISABLED ACCESS EXPENDITURES.--

A. To encourage small businesses to provide access to disabled individuals and to comply with the Americans with Disabilities Act of 1990, a taxpayer that files a New Mexico corporate income tax return and that is an eligible small business that has claimed a disabled access credit for eligible access expenditures made in the taxable year, pursuant to Section 44 of the Internal Revenue Code, may claim a credit in an amount equal to twenty-five percent of those eligible access expenditures made in the taxable year, not to exceed five thousand dollars ($5,000).

B. The taxpayer may claim the credit provided in this section for each taxable year in which the taxpayer qualifies as an eligible small business and claims the federal disabled access credit for eligible access expenditures.

C. The credit provided in this section may only be deducted from the taxpayer's income tax liability. Any portion of the maximum tax credit provided by this section that remains unused at the end of the taxpayer's taxable year may be carried forward for three consecutive taxable years; provided that the total tax credits claimed under this section shall not exceed the maximum amount of credit allowed for any taxable year."

Section 3. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2002.