SENATE BILL 151
47th legislature - STATE OF NEW MEXICO - first session, 2005
INTRODUCED BY
H. Diane Snyder
AN ACT
RELATING TO TAXATION; ENACTING THE BUSINESS SERVICES TAX CREDIT ACT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. SHORT TITLE.--This act may be cited as the "Business Services Tax Credit Act".
Section 2. PURPOSE OF THE ACT.--The purpose of the Business Services Tax Credit Act is to reduce the tax burden on businesses that results from multiple impositions of transactional taxes upon the sale or use of services purchased by businesses.
Section 3. DEFINITIONS.--As used in the Business Services Tax Credit Act:
A. "department" means the taxation and revenue department, the secretary of taxation and revenue or any employee of the department exercising authority lawfully delegated to that employee by the secretary;
B. "qualified expenditure" means the amount paid by a qualified taxpayer to purchase a service that is deductible for purposes of determining net income pursuant to Section 162 of the Internal Revenue Code of 1986 and for which receipts from performance of that service are subject to the gross receipts tax and are not eligible for a deduction or exemption from the gross receipts tax, but does not include expenditures for:
(1) commercial linen supply services;
(2) entertainment or recreational services;
(3) intrastate telephone and telegraph services;
(4) janitorial or cleaning services;
(5) landscaping services;
(6) repair and maintenance services;
(7) sewer and solid waste services disposal; and
(8) services, the purchase price of which is the basis for any other New Mexico tax credit claimed and allowed either prior or subsequent to this credit; and
C. "qualified taxpayer" means a person liable for payment of any tax, a person responsible for withholding a payment or for collection and payment of any tax or a person to whom an assessment has been made if the assessment remains unabated or the amount of the assessment has not been paid, but does not include:
(1) a federal, state, tribal or other governmental unit or subdivision or an agency, department, institution or instrumentality of a federal, state, tribal or other governmental unit or subdivision;
(2) a taxpayer that is a nonprofit entity and for which receipts are exempt from the gross receipts tax pursuant to Sections 7-9-16 and 7-9-29 NMSA 1978; or
(3) a taxpayer for which receipts are exempt from the gross receipts tax pursuant to Section 7-9-24 NMSA 1978.
Section 4. BUSINESS SERVICES TAX CREDIT.--
A. The tax credit provided in the Business Services Tax Credit Act may be referred to as the "business services tax credit". The purpose of the business services tax credit is to reduce the tax burden on businesses that results from multiple impositions of transactional taxes upon the sale or use of services that businesses purchase.
B. A qualified taxpayer may apply for, and the department may allow, a business services tax credit for qualified expenditures made during the period:
(1) beginning July 1, 2005 and ending June 30, 2006, in an amount equal to:
(a) one-half percent of qualified expenditures of the taxpayer; or
(b) in the case of a taxpayer that claims the gross receipts tax deduction pursuant to Section 7-9-73.1 NMSA 1978, one-fourth percent of the qualified expenditures of the taxpayer;
(2) beginning July 1, 2006 and ending June 30, 2007, in an amount equal to:
(a) one percent of the qualified expenditures of the taxpayer; or
(b) in the case of a taxpayer that claims the gross receipts tax deduction pursuant to Section 7-9-73.1 NMSA 1978, one-half percent of the qualified expenditures of the taxpayer;
(3) beginning July 1, 2007 and ending June 30, 2008, in an amount equal to:
(a) one and one-half percent of the qualified expenditures of the taxpayer; or
(b) in the case of a taxpayer that claims the gross receipts tax deduction pursuant to Section 7-9-73.1 NMSA 1978, three-fourths percent of qualified expenditures of the taxpayer;
(4) beginning July 1, 2008 and ending June 30, 2009, in an amount equal to:
(a) two percent of the qualified expenditures of the taxpayer; or
(b) in the case of a taxpayer that claims the gross receipts tax deduction pursuant to Section 7-9-73.1 NMSA 1978, one percent of the qualified expenditures of the taxpayer; and
(5) beginning July 1, 2009 and ending June 30, 2010, in an amount equal to:
(a) two and one-half percent of the qualified expenditures of the taxpayer; or
(b) in the case of a taxpayer that claims the gross receipts tax deduction pursuant to Section 7-9-73.1 NMSA 1978, one and one-fourth percent of the qualified expenditures of the taxpayer.
C. The business services tax credit may be claimed against state gross receipts tax, compensating tax or withholding tax for which the taxpayer would be liable for a tax reporting period in which the qualified expenditure was paid or in later periods. In no case may the credit taken exceed the total gross receipts tax, compensating tax or withholding tax due for the reporting period. After the initial reporting period in which part of the credit for a qualified expenditure was claimed, any excess credit may be carried forward and used in future reporting periods.
D. The department shall administer the business services tax credit pursuant to the provisions of the Tax Administration Act.
Section 5. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2005.
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