AN ACT
RELATING TO TAXATION; CREATING THE JOB
MENTORSHIP TAX CREDIT; PROVIDING INCOME TAX AND CORPORATE INCOME TAX CREDITS
FOR EMPLOYMENT OF YOUTH PARTICIPATING IN CAREER PREPARATION EDUCATION PROGRAMS.
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:
"JOB MENTORSHIP TAX
CREDIT.--
A. To encourage New Mexico businesses to hire
youth participating in career preparation education programs, a taxpayer who
files an individual New Mexico income tax return, who is not a dependent of
another individual and who is an owner of a New Mexico business may claim a
credit in an amount equal to fifty percent of gross wages paid to qualified
students who are employed by the business during the taxable year for which the
return is filed. The tax credit provided
by this section may be referred to as the "job mentorship tax
credit".
B. A taxpayer who is an owner of a New Mexico
business may claim the job mentorship tax credit for each taxable year in which
the business employs one or more qualified students. The maximum aggregate credit allowable shall
not exceed fifty percent of the gross wages paid to not more than ten qualified
students employed by the business for up to three hundred twenty hours of
employment of each qualified student in each taxable year for a maximum of
three taxable years for each qualified student.
In no event shall a taxpayer claim a credit in excess of twelve thousand
dollars ($12,000) in any taxable year. The taxpayer shall certify that hiring the
qualified student does not displace or replace a current employee.
C. The department shall issue job mentorship tax
credit certificates upon request to any accredited New Mexico secondary school
that has a school-sanctioned career preparation education program. The maximum number of certificates that may
be issued in a school year to any one school is equal to the number of
qualified students in the school-sanctioned career preparation education
program on October 15 of that school year, as certified by the school
principal.
D. A job mentorship tax credit certificate may
be executed by a school principal with respect to a qualified student, and the
executed certificate may be transferred to a New Mexico business that employs
that student. By executing the
certificate with respect to a student, the school principal certifies that the
school has a school-sanctioned career preparation education program and the
student is a qualified student.
E. To claim the job mentorship tax credit, the
taxpayer must submit with respect to each employee for whom the credit is
claimed:
(1) a properly executed job mentorship tax credit
certificate;
(2) information required by the secretary with
respect to the employee's employment by the business during the taxable year
for which the credit is claimed; and
(3) information required by the secretary that
the employee was not also employed in the same taxable year by another New
Mexico business qualifying for and claiming a job mentorship tax credit for
that employee pursuant to this section or the Corporate Income and Franchise
Tax Act.
F. The job mentorship tax credit may only be
deducted from the taxpayer's New Mexico income tax liability for the taxable
year. Any portion of the maximum 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 the total credits claimed under this section shall not exceed the
maximum allowable pursuant to Subsection B of this section.
G. 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.
H. A taxpayer who otherwise qualifies for and
claims a job mentorship tax credit for employment of qualified students by a
partnership, limited partnership, limited liability company, S corporation or
other business association of which the taxpayer is a member may claim a credit
only in proportion to his interest in the partnership, limited partnership,
limited liability company, S corporation or association. The total credit claimed by all members of
the business shall not exceed the maximum credit allowable pursuant to
Subsection B of this section.
I. As used in this section:
(1) "career preparation education
program" means a work-based learning or school-to-career program designed
for secondary school students to create academic and career goals and
objectives and find employment in a job meeting those goals and objectives;
(2) "New Mexico business" means a
partnership, limited partnership, limited liability company treated as a
partnership for federal income tax purposes, S corporation or sole
proprietorship that carries on a trade or business in New Mexico and that
employs in New Mexico fewer than three hundred full-time employees at any one
time during the taxable year; and
(3) "qualified student" means an
individual who is at least fourteen years of age but not more than twenty-one
years of age who is attending full time an accredited New Mexico secondary
school and who is a participant in a career preparation education program
sanctioned by the secondary school."
Section 2. A new section of the Corporate Income and
Franchise Tax Act is enacted to read:
"JOB MENTORSHIP TAX
CREDIT.--
A. To encourage New Mexico businesses to hire
youth participating in career preparation education programs, a taxpayer that
is a New Mexico business and that files a corporate income tax return may claim
a credit in an amount equal to fifty percent of gross wages paid to qualified
students who are employed by the taxpayer during the taxable year for which the
return is filed. The tax credit provided
by this section may be referred to as the "job mentorship tax
credit".
B. A taxpayer may claim the job mentorship tax
credit provided in this section for each taxable year in which the taxpayer
employs one or more qualified students.
The maximum aggregate credit allowable shall not exceed fifty percent of
the gross wages paid to not more than ten qualified students employed by the
taxpayer for up to three hundred twenty hours of employment of each qualified
student in each taxable year for a maximum of three taxable years for each
qualified student. In no event shall a
taxpayer claim a credit in excess of twelve thousand dollars ($12,000) in any
taxable year. The employer shall certify
that hiring the qualified student does not displace or replace a current
employee.
C. The department shall issue job mentorship tax
credit certificates upon request to any accredited New Mexico secondary school
that has a school-sanctioned career preparation education program. The maximum number of certificates that may
be issued in a school year to any one school is equal to the number of
qualified students in the school-sanctioned career preparation education
program on October 15 of that school year, as certified by the school
principal.
D. A job mentorship tax credit certificate may
be executed by a school principal with respect to a qualified student, and the
executed certificate may be transferred to a New Mexico business that employs
that student. By executing the
certificate with respect to a student, the school principal certifies that the
school has a school-sanctioned career preparation education program and the
student is a qualified student.
E. To claim the job mentorship tax credit, the
taxpayer must submit with respect to each employee for whom the credit is
claimed:
(1) a properly executed job mentorship tax credit
certificate;
(2) information required by the secretary with
respect to the employee's employment by the taxpayer during the taxable year
for which the credit is claimed; and
(3) information required by the secretary that
the employee was not also employed in the same taxable year by another New
Mexico business qualifying for and claiming a job mentorship tax credit for
that employee pursuant to this section or the Income Tax Act.
F. The job mentorship tax credit may only be
deducted from the taxpayer's corporate income tax liability for the taxable
year. Any portion of the maximum 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 the total credits claimed pursuant to this section shall not exceed
the maximum allowable under Subsection B of this section.
G. As used in this section:
(1) "career preparation education
program" means a work-based learning or school-to-career program designed
for secondary school students to create academic and career goals and
objectives and find employment in a job meeting those goals and objectives;
(2) "New Mexico business" means a
corporation that carries on a trade or business in New Mexico and that employs
in New Mexico fewer than three hundred full-time employees during the taxable
year; and
(3) "qualified student" means an
individual who is at least fourteen years of age but not more than twenty-one
years of age who is attending full time an accredited New Mexico secondary
school and who is a participant in a career preparation education program
sanctioned by the secondary school."
Section 3. APPLICABILITY.--The provisions of this act
apply to taxable years beginning on or after January 1, 2003.
HB 572
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