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SPONSOR: |
Lujan |
DATE TYPED: |
03/06/03 |
HB |
920/aHTRC |
||
SHORT TITLE: |
Income Tax Act Definition of “Resident” |
SB |
|
||||
|
ANALYST: |
Hayes |
|||||
REVENUE
Estimated Revenue |
Subsequent Years Impact |
Recurring or
Non-Rec |
Fund Affected |
|
FY03 |
FY04 |
|
|
|
|
$4
million |
See
Narrative |
Recurring |
General
Fund |
|
|
|
|
|
(Parenthesis ( ) Indicate Revenue Decreases)
Relates
to HB 282
Response
Received From
Taxation
and Revenue Department (TRD)
SUMMARY
Synopsis
of HTRC Amendments
Two references in this bill’s “residency”
definition as “an individual who is physically present in this state for seven months
or more” are amended to one hundred eighty-five days (185) or more.
The other HTRC amendment adds a clause at the
end of sub-section S, “for periods after that change of abode”, which
clarifies the definition and timeframe for determining a non-resident for purposes
of the Income Tax Act.
Synopsis of Original Bill
House Bill 920 amends
the Income Tax General Provisions, Section 7-2-2 NMSA 1978, to change the
definition of a New Mexico “resident” for the purposes of the Income Tax
Act. A “resident” means an individual
who is domiciled in this state during any part of the taxable year or an
individual who is physically present in this state for seven months or more
during the taxable year. However,
if the individual changes his place of abode to outside New Mexico on or
before the last day of
the taxable year with the intention of continuing to live outside New Mexico,
then the individual is not considered a “resident” for purposes of the Income
Tax Act.
The effective date of
the provisions of this legislation applies to taxable years beginning on or
after January 1, 2003.
Significant Issues
FISCAL IMPLICATIONS
TRD estimates a $4 million revenue impact from this legislation. The estimate is only approximate and depends a great deal upon
compliance and enforcement. The
department does not have detailed information on the amount of time spent in
New Mexico by “interim” residents. However,
the amount of income potentially affected by the proposal is significant
according to TRD. Total taxable income
reported by taxpayers filing schedule PIT-B is approximately $10 billion per
year. Most of this income is not
taxable in New Mexico, but HB 902 could increase the portion that is, in fact,
taxable in New Mexico.
RELATIONSHIP
HB 282 amends the
state’s Income Tax Act.
TECHNICAL ISSUES
“Seven months” may need to be changed to a
specific number of days, e.g., 210 days, since the number of days in a
seven-month period could be different depending on which months are used.
CMH/prr