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

RELATING TO TAXATION; PROVIDING A PHASED-IN CREDIT FOR THE STATE PORTION OF GROSS RECEIPTS TAX ON RECEIPTS FROM THE SALE OF FOOD; MODIFYING CERTAIN DISTRIBUTIONS TO MUNICIPALITIES AND COUNTIES.

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

Section 1. Section 7-1-6.4 NMSA 1978 (being Laws 1983, Chapter 211, Section 9, as amended) is amended to read:

"7-1-6.4. DISTRIBUTION--MUNICIPALITY FROM GROSS RECEIPTS TAX.--

A. Except as provided in Subsection B of this section, a distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to each municipality in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to the product of the quotient of one and two hundred twenty-five thousandths percent divided by the tax rate imposed by Section 7-9-4 NMSA 1978 [times] multiplied by the sum of the net receipts for the month plus the amount of the food credit claimed for the month pursuant to Section 7-9-92 NMSA 1978 attributable to the gross receipts tax from business locations:

(1) within that municipality;

(2) on land owned by the state, commonly known as the "state fair grounds", within the exterior boundaries of that municipality;

(3) outside the boundaries of any municipality on land owned by that municipality; and

(4) on an Indian reservation or pueblo grant in an area that is contiguous to that municipality and in which the municipality performs services pursuant to a contract between the municipality and the Indian tribe or Indian pueblo if:

(a) the contract describes an area in which the municipality is required to perform services and requires the municipality to perform services that are substantially the same as the services the municipality performs for itself; and

(b) the governing body of the municipality has submitted a copy of the contract to the secretary.

B. If the reduction made by Laws 1991, Chapter 9, Section 9 to the distribution under this section impairs the ability of a municipality to meet its principal or interest payment obligations for revenue bonds outstanding prior to July 1, 1991 that are secured by the pledge of all or part of the municipality's revenue from the distribution made under this section, then the amount distributed pursuant to this section to that municipality shall be increased by an amount sufficient to meet any required payment, provided that the distribution amount does not exceed the amount that would have been due that municipality under this section as it was in effect on June 30, 1992."

Section 2. Section 7-1-6.16 NMSA 1978 (being Laws 1983, Chapter 213, Section 27, as amended) is amended to read:

"7-1-6.16. COUNTY EQUALIZATION DISTRIBUTION.--

A. Beginning on September 15, 1989 and on September 15 of each year thereafter, the department shall distribute to any county that has imposed or continued in effect during the state's preceding fiscal year a county gross receipts tax pursuant to [the County Gross Receipts Tax Act] Section 7-20E-9 NMSA 1978 an amount equal to:

(1) the product of a fraction, the numerator of which is the county's population and the denominator of which is the state's population, multiplied by the annual sum for the county; less

(2) the net receipts received by the department during the report year, including any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, attributable to the county gross receipts tax at a rate of one-eighth percent; provided that for any month in the report year, if no county gross receipts tax was in effect in the county in the previous month, the net receipts, for the purposes of this section, for that county for that month shall be zero.

B. If the amount determined by the calculation in Subsection A of this section is zero or a negative number for a county, no distribution shall be made to that county.

C. As used in this section:

(1) "annual sum" means for each county the sum of the monthly amounts for those months in the report year [which] that follow a month in which the county had in effect a county gross receipts tax;

(2) "monthly amount" means an amount equal to the product of the sum of the net receipts received by the department in the month attributable to the state gross receipts tax plus the amount of the food credit claimed for the month pursuant to Section 7-9-92 NMSA 1978 multiplied by a fraction, the numerator of which is one-eighth percent and the denominator of which is the tax rate imposed by Section 7-9-4 NMSA 1978 in effect on the last day of the previous month;

(3) "population" means the most recent official census or estimate determined by the [bureau of the] United States census bureau for the unit or, if neither is available, the most current estimated population for the unit provided in writing by the bureau of business and economic research at the university of New Mexico; and

(4) "report year" means the twelve-month period ending on the July 31 immediately preceding the date upon which a distribution pursuant to this section is required to be made."

Section 3. A new section of the Gross Receipts and Compensating Tax Act, Section 7-9-92 NMSA 1978, is enacted to read:

"7-9-92. [NEW MATERIAL] FOOD CREDIT--GROSS RECEIPTS TAX--RECEIPTS FROM SALE OF FOOD AT RETAIL FOOD STORES.--

A. The credit provided for in this section may be referred to as the "food credit". A food credit shall be allowed for each reporting period against the gross receipts tax due for that reporting period as follows:

(1) for a taxpayer located in the unincorporated area of a county:

(a) on or after July 1, 2003 and before July 1, 2004, an amount equal to one and one-fourth percent of the taxpayer's taxable gross receipts from the sale of food at a retail food store for that reporting period;

(b) on or after July 1, 2004 and before July 1, 2005, an amount equal to two and one-half percent of the taxpayer's taxable gross receipts from the sale of food at a retail food store for that reporting period;

(c) on or after July 1, 2005 and before July 1, 2006, an amount equal to three and three-fourths percent of the taxpayer's taxable gross receipts from the sale of food at a retail food store for that reporting period; and

(d) on or after July 1, 2006, an amount equal to five percent of the taxpayer's taxable gross receipts from the sale of food at a retail food store for that reporting period; and

(2) for a taxpayer located in a municipality:

(a) on or after July 1, 2003 and before July 1, 2004, an amount equal to eighty-two hundredths percent of the taxpayer's taxable gross receipts from the sale of food at a retail food store for that reporting period;

(b) on or after July 1, 2004 and before July 1, 2005, an amount equal to one and sixty-four hundredths percent of the taxpayer's taxable gross receipts from the sale of food at a retail food store for that reporting period;

(c) on or after July 1, 2005 and before July 1, 2006, an amount equal to two and forty-six hundredths percent of the taxpayer's taxable gross receipts from the sale of food at a retail food store for that reporting period; and

(d) on or after July 1, 2006, an amount equal to three and two hundred seventy-five thousandths percent of the taxpayer's taxable gross receipts from the sale of food at a retail food store for that reporting period.

B. For the purposes of this section:

(1) "food" means any food or food product for home consumption that meets the definition of food in 7 USCA 2012(g)(1) for purposes of the federal food stamp program; and

(2) "retail food store" means an establishment that sells food for home preparation and consumption that meets the definition of retail food store in 7 USCA 2012(k)(1) for purposes of the federal food stamp program, whether or not the establishment participates in the food stamp program."

Section 4. EFFECTIVE DATE.--The effective date of the provisions of Section 3 of this act is July 1, 2003. The effective date of the provisions of Sections 1 and 2 of this act is August 1, 2003.