46th legislature - STATE OF NEW MEXICO - first session, 2003

RELATING TO TAXATION; REMOVING CERTAIN GROSS RECEIPTS AND COMPENSATING TAX EXEMPTIONS FOR NATIONAL LABORATORIES AND PROVIDING TEMPORARY GROSS RECEIPTS AND COMPENSATING TAX DEDUCTIONS FOR THOSE LABORATORIES; PROVIDING FOR A DISTRIBUTION OF GROSS RECEIPTS TAX REVENUE TO THE PUBLIC SCHOOL FUND; MAKING AN APPROPRIATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. Section 7-9-15 NMSA 1978 (being Laws 1970, Chapter 12, Section 1, as amended) is amended to read:

"7-9-15. EXEMPTION--COMPENSATING TAX--CERTAIN ORGANIZATIONS.--

A. Exempted from the compensating tax is the use of property by organizations other than a national laboratory that demonstrate to the department that they have been granted exemption from the federal income tax by the United States commissioner of internal revenue as organizations described in Section 501(c)(3) of the United States Internal Revenue Code of 1954, as amended or renumbered, in the conduct of functions described in Section 501(c)(3). The use of property as an ingredient or component part of a construction project is not a use in the conduct of functions described in Section 501(c)(3). This section does not apply to the use of property in an unrelated trade or business as defined in Section 513 of the United States Internal Revenue Code of 1954, as amended or renumbered.

B. As used in this section, "national laboratory" means a federally funded research and development center operated as a department of energy national laboratory."

Section 2. Section 7-9-29 NMSA 1978 (being Laws 1970, Chapter 12, Section 3, as amended) is amended to read:

"7-9-29. EXEMPTION--GROSS RECEIPTS TAX--CERTAIN ORGANIZATIONS.--

A. Exempted from the gross receipts tax are the receipts of organizations other than a national laboratory that demonstrate to the department that they have been granted exemption from the federal income tax by the United States commissioner of internal revenue as organizations described in Section 501(c)(3) of the United States Internal Revenue Code of 1954, as amended or renumbered.

B. Exempted from the gross receipts tax are the receipts from carrying on chamber of commerce, visitor bureau and convention bureau functions of organizations that demonstrate to the department that they have been granted exemption from the federal income tax by the United States commissioner of internal revenue as organizations described in Section 501(c)(6) of the United States Internal Revenue Code of 1954, as amended or renumbered.

C. This section does not apply to receipts derived from an unrelated trade or business as defined in Section 513 of the United States Internal Revenue Code of 1954, as amended or renumbered.

D. As used in this section, "national laboratory" means a federally funded research and development center operated as a department of energy national laboratory."

Section 3. Section 7-9-60 NMSA 1978 (being Laws 1970, Chapter 12, Section 4, as amended) is amended to read:

"7-9-60. DEDUCTION--GROSS RECEIPTS TAX--GOVERNMENTAL GROSS RECEIPTS TAX--SALES TO CERTAIN ORGANIZATIONS.--

A. Except as provided otherwise in Subsection B of this section, receipts from selling tangible personal property to organizations other than a national laboratory that have been granted exemption from the federal income tax by the United States commissioner of internal revenue as organizations described in Section 501(c)(3) of the United States Internal Revenue Code of 1986, as amended or renumbered, may be deducted from gross receipts or from governmental gross receipts if the sale is made to an organization that delivers a nontaxable transaction certificate to the seller. The buyer delivering the nontaxable transaction certificate shall employ the tangible personal property in the conduct of functions described in Section 501(c)(3) and shall not employ the tangible personal property in the conduct of an unrelated trade or business as defined in Section 513 of the United States Internal Revenue Code of 1986, as amended or renumbered.

B. The deduction provided by this section does not apply to receipts from selling construction material or from selling metalliferous mineral ore.

C. As used in this section, "national laboratory" means a federally funded research and development center operated as a department of energy national laboratory."

Section 4. A new section of the Tax Administration Act is enacted to read:

"[NEW MATERIAL] DISTRIBUTION TO PUBLIC SCHOOL FUND.--A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the public school fund in an amount equal to the net receipts attributable to the gross receipts tax imposed on a federally funded research and development center operated as a department of energy national laboratory that is an organization described in Section 501(c)(3) of the Internal Revenue Code. The distribution made pursuant to this section shall be considered as new revenue to the public school fund and shall not be offset by a reduction of previously existing revenue sources or of the level of appropriation from those resources."

Section 5. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

"[NEW MATERIAL] DEDUCTION--COMPENSATING TAX--NATIONAL LABORATORY.--

A. A national laboratory may deduct the following percentages of the value of property in computing the compensating tax due on the use of the property by the national laboratory:

(1) for a taxable year beginning in 2003, eighty percent;

(2) for a taxable year beginning in 2004, sixty percent;

(3) for a taxable year beginning in 2005, forty percent;

(4) for a taxable year beginning in 2006, twenty percent; and

(5) for taxable years beginning on or after January 1, 2007, no deduction shall be allowed.

B. As used in this section, "national laboratory" means a federally funded research and development center operated as a department of energy national laboratory that demonstrates to the taxation and revenue department that it has been granted exemption from the federal income tax by the United States commissioner of internal revenue as an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended."

Section 6. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

"[NEW MATERIAL] DEDUCTION--GROSS RECEIPTS TAX--NATIONAL LABORATORY.--

A. Receipts of a national laboratory may be deducted from gross receipts in the following amounts:

(1) for a taxable year beginning in 2003, eighty percent of receipts;

(2) for a taxable year beginning in 2004, sixty percent of receipts;

(3) for a taxable year beginning in 2005, forty percent of receipts;

(4) for a taxable year beginning in 2006, twenty percent of receipts; and

(5) for taxable years beginning on or after January 1, 2007, no deduction shall be allowed.

B. As used in this section, "national laboratory" means a federally funded research and development center operated as a department of energy national laboratory that demonstrates to the taxation and revenue department that it has been granted exemption from the federal income tax by the United States commissioner of internal revenue as an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended."

Section 7. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

"[NEW MATERIAL] DEDUCTION--GROSS RECEIPTS TAX--GOVERNMENTAL GROSS RECEIPTS TAX--SALES TO A NATIONAL LABORATORY.--

A. Except as provided in Subsection B of this section, receipts from selling tangible personal property to a national laboratory may be deducted from gross receipts or from governmental gross receipts in the following amounts:

(1) for a taxable year beginning in 2003, eighty percent of the receipts;

(2) for a taxable year beginning in 2004, sixty percent of the receipts;

(3) for a taxable year beginning in 2005, forty percent of the receipts;

(4) for a taxable year beginning in 2006, twenty percent of the receipts; and

(5) for taxable years beginning on or after January 1, 2007, no deduction shall be allowed.

B. The deduction provided by this section does not apply to receipts from selling construction material or from selling metalliferous mineral ore.

C. As used in this section, "national laboratory" means a federally funded research and development center operated as a department of energy national laboratory that demonstrates to the taxation and revenue department that it has been granted exemption from the federal income tax by the United States commissioner of internal revenue as an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended."

Section 8. EFFECTIVE DATE.--

A. The effective date of the provisions of Sections 1 through 3 and 5 through 7 of this act is July 1, 2003.

B. The effective date of the provisions of Section 4 of this act is August 1, 2003.