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AN ACT

RELATING TO TAXATION; ADJUSTING DISTRIBUTIONS TO

MUNICIPALITIES AND COUNTIES TO OFFSET THE FOOD AND HEALTH

CARE PRACTITIONER SERVICES DEDUCTIONS IN THE GROSS RECEIPTS

TAX; AMENDING THE GROSS RECEIPTS AND COMPENSATING TAX ACT TO

EXPAND THE DEFINITION OF RETAIL FOOD STORE FOR PURPOSES OF

THE DEDUCTION FOR RECEIPTS FROM THE SALE OF FOOD.

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

Section 1. Section 7-1-6.46 NMSA 1978 (being Laws 2004,

Chapter 116, Section 1, as amended) is amended to read:

"7-1-6.46. DISTRIBUTION TO MUNICIPALITIES--OFFSET FOR

FOOD DEDUCTION AND HEALTH CARE PRACTITIONER SERVICES

DEDUCTION.--

A. A distribution pursuant to Section 7-1-6.1 NMSA

1978 shall be made to a municipality in an amount, subject to

any increase or decrease made pursuant to Section 7-1-6.15

NMSA 1978, equal to the sum of:

(1) for a municipality having a population

of less than ten thousand according to the most recent

federal decennial census and having per capita taxable gross

receipts for the previous calendar year that are less than

the average per capita taxable gross receipts for all

municipalities for that same calendar year:

(a) the total deductions claimed

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pursuant to Section 7-9-92 NMSA 1978 for the month by

taxpayers from business locations attributable to the

municipality multiplied by the sum of the combined rate of

all municipal local option gross receipts taxes in effect in

the municipality for the month plus one and two hundred

twenty-five thousandths percent; and

(b) the total deductions claimed

pursuant to Section 7-9-93 NMSA 1978 for the month by

taxpayers from business locations attributable to the

municipality multiplied by the sum of the combined rate of

all municipal local option gross receipts taxes in effect in

the municipality for the month plus one and two hundred

twenty-five thousandths percent; or

(2) for a municipality not described in

Paragraph (1) of this subsection:

(a) the total deductions claimed

pursuant to Section 7-9-92 NMSA 1978 for the month by

taxpayers from business locations attributable to the

municipality multiplied by the sum of the combined rate of

all municipal local option gross receipts taxes in effect in

the municipality on January 1, 2007 plus one and two hundred

twenty-five thousandths percent; and

(b) the total deductions claimed

pursuant to Section 7-9-93 NMSA 1978 for the month by

taxpayers from business locations attributable to the

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municipality multiplied by the sum of the combined rate of

all municipal local option gross receipts taxes in effect in

the municipality on January 1, 2007 plus one and two hundred

twenty-five thousandths percent.

B. The distribution pursuant to Subsection A of

this section is in lieu of revenue that would have been

received by the municipality but for the deductions provided

by Sections 7-9-92 and 7-9-93 NMSA 1978. The distribution

shall be considered gross receipts tax revenue and shall be

used by the municipality in the same manner as gross receipts

tax revenue, including payment of gross receipts tax revenue

bonds.

C. For the purposes of this section, "business

locations attributable to the municipality" means business

locations:

(1) within the municipality;

(2) on land owned by the state, commonly

known as the "state fairgrounds", within the exterior

boundaries of the municipality;

(3) outside the boundaries of the

municipality on land owned by the municipality; and

(4) on an Indian reservation or pueblo grant

in an area that is contiguous to the municipality and in

which the municipality performs services pursuant to a

contract between the municipality and the Indian tribe or

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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.

D. A distribution pursuant to this section may be

adjusted for a distribution made to a tax increment

development district with respect to a portion of a gross

receipts tax increment dedicated by a municipality pursuant

to the Tax Increment for Development Act."

Section 2. Section 7-1-6.47 NMSA 1978 (being Laws 2004,

Chapter 116, Section 2, as amended) is amended to read:

"7-1-6.47. DISTRIBUTION TO COUNTIES--OFFSET FOR FOOD

DEDUCTION AND HEALTH CARE PRACTITIONER SERVICES DEDUCTION.--

A. A distribution pursuant to Section 7-1-6.1 NMSA

1978 shall be made to a county in an amount, subject to any

increase or decrease made pursuant to Section 7-1-6.15 NMSA

1978, equal to the sum of:

(1) for a county having a population of less

than forty-eight thousand according to the most recent

federal decennial census:

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(a) the total deductions claimed

pursuant to Section 7-9-92 NMSA 1978 for the month by

taxpayers from business locations within a municipality in

the county multiplied by the combined rate of all county

local option gross receipts taxes in effect for the month

that are imposed throughout the county;

(b) the total deductions claimed

pursuant to Section 7-9-92 NMSA 1978 for the month by

taxpayers from business locations in the county but not

within a municipality multiplied by the combined rate of all

county local option gross receipts taxes in effect for the

month that are imposed in the county area not within a

municipality;

pursuant to Section 7-9-93 NMSA 1978 for the month by

taxpayers from business locations within a municipality in

the county multiplied by the combined rate of all county

local option gross receipts taxes in effect for the month

that are imposed throughout the county; and

(d) the total deductions claimed

pursuant to Section 7-9-93 NMSA 1978 for the month by

taxpayers from business locations in the county but not

within a municipality multiplied by the combined rate of all

county local option gross receipts taxes in effect for the

month that are imposed in the county area not within a

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municipality; or

(2) for a county not described in Paragraph

(1) of this subsection:

(a) the total deductions claimed

pursuant to Section 7-9-92 NMSA 1978 for the month by

taxpayers from business locations within a municipality in

the county multiplied by the combined rate of all county

local option gross receipts taxes in effect on January 1,

2007 that are imposed throughout the county;

(b) the total deductions claimed

pursuant to Section 7-9-92 NMSA 1978 for the month by

taxpayers from business locations in the county but not

within a municipality multiplied by the combined rate of all

county local option gross receipts taxes in effect on January

1, 2007 that are imposed in the county area not within a

municipality;

pursuant to Section 7-9-93 NMSA 1978 for the month by

taxpayers from business locations within a municipality in

the county multiplied by the combined rate of all county

local option gross receipts taxes in effect on January 1,

2007 that are imposed throughout the county; and

(d) the total deductions claimed

pursuant to Section 7-9-93 NMSA 1978 for the month by

taxpayers from business locations in the county but not

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within a municipality multiplied by the combined rate of all

county local option gross receipts taxes in effect on January

1, 2007 that are imposed in the county area not within a

municipality.

B. The distribution pursuant to Subsection A of

this section is in lieu of revenue that would have been

received by the county but for the deductions provided by

Sections 7-9-92 and 7-9-93 NMSA 1978. The distribution shall

be considered gross receipts tax revenue and shall be used by

the county in the same manner as gross receipts tax revenue,

including payment of gross receipts tax revenue bonds.

C. A distribution pursuant to this section may be

adjusted for a distribution made to a tax increment

development district with respect to a portion of a gross

receipts tax increment dedicated by a county pursuant to the

Tax Increment for Development Act."

Section 3. Section 7-9-92 NMSA 1978 (being Laws 2004,

Chapter 116, Section 5) is amended to read:

"7-9-92. DEDUCTION--GROSS RECEIPTS--SALE OF FOOD AT

RETAIL FOOD STORE.--

A. Receipts from the sale of food at a retail food

store that are not exempt from gross receipts taxation and

are not deductible pursuant to another provision of the Gross

Receipts and Compensating Tax Act may be deducted from gross

receipts. The deduction provided by this section shall be

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separately stated by the taxpayer.

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 and 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; provided, however, that if more

than seventy-five percent of the total sales of the

establishment consist of bottled water, ice and coffee, the

establishment shall be considered a "retail food store" for

the purposes of this section."

Section 4. EFFECTIVE DATE.--The effective date of the

provisions of this act is July 1, 2007.