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AN ACT

RELATING TO TAXATION; ADDING A REPORTING REQUIREMENT;

EXTENDING THE DATE FOR ELIGIBILITY.

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

Section 1. Section 7-9G-1 NMSA 1978 (being Laws 2004,

Chapter 15, Section 1, as amended) is amended to read:

"7-9G-1. HIGH-WAGE JOBS TAX CREDIT--QUALIFYING

HIGH-WAGE JOBS.--

A. A taxpayer who is an eligible employer may

apply for, and the taxation and revenue department may allow,

a tax credit for each new high-wage economic-based job. The

credit provided in this section may be referred to as the

"high-wage jobs tax credit".

B. The high-wage jobs tax credit may be claimed

and allowed in an amount equal to ten percent of the wages and

benefits distributed to an eligible employee in a new

high-wage economic-based job, but shall not exceed twelve

thousand dollars ($12,000).

C. The high-wage jobs tax credit may be claimed by

an eligible employer for each new high-wage economic-based job

performed for the year in which the new high-wage

economic-based job is created and for the three following

qualifying periods.

D. A new high-wage economic-based job shall not be

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eligible for a credit pursuant to this section unless the

eligible employer's total number of employees with new

high-wage economic-based jobs on the last day of the

qualifying period at the location at which the job is

performed or based is at least one more than the number on

the day prior to the date the job was created.

E. With respect to each new high-wage

economic-based job for which an eligible employer seeks the

high-wage jobs tax credit, the employer shall certify:

(1) the amount of wages paid to each

eligible employee in a new high-wage economic-based job

during each qualifying period;

(2) the number of weeks the position was

occupied during the qualifying period;

(3) whether the new high-wage economic-based

job was in a municipality with a population of forty thousand

or more or with a population of less than forty thousand

according to the most recent federal decennial census and

whether the job was in the unincorporated area of a county;

and

(4) the total number of employees employed

by the employer at the job location on the day prior to the

qualifying period and on the last day of the qualifying

period.

F. To receive a high-wage jobs tax credit with

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respect to any qualifying period, an eligible employer shall

apply to the taxation and revenue department on forms and in

the manner prescribed by the department. The application

shall include a certification made pursuant to Subsection E

of this section.

G. The credit provided in this section may be

deducted from the modified combined tax liability of a

taxpayer. If the credit exceeds the modified combined tax

liability of the taxpayer, the excess shall be refunded to

the taxpayer.

H. The economic development department shall

report to the appropriate interim legislative committee

before November 1 of each year the cost of this tax credit to

the state and its impact on company recruitment and job

creation.

I. As used in this section:

(1) "benefits" means any employee benefit

plan as defined in Title 1, Section 3 of the federal Employee

Retirement Income Security Act of 1974, 29 U.S.C. 1002;

(2) "eligible employee" means an individual

who is employed by an eligible employer and who is a resident

of New Mexico; "eligible employee" does not include an

individual who:

(a) bears any of the relationships

described in Paragraphs (1) through (8) of 26 U.S.C. Section

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152(a) to the employer or, if the employer is a corporation,

to an individual who owns, directly or indirectly, more than

fifty percent in value of the outstanding stock of the

corporation or, if the employer is an entity other than a

corporation, to an individual who owns, directly or

indirectly, more than fifty percent of the capital and

profits interest in the entity;

(b) if the employer is an estate or

trust, is a grantor, beneficiary or fiduciary of the estate

or trust or is an individual who bears any of the

relationships described in Paragraphs (1) through (8) of 26

U.S.C. Section 152(a) to a grantor, beneficiary or fiduciary

of the estate or trust;

described in 26 U.S.C. Section 152(a)(9), of the employer or,

if the taxpayer is a corporation, of an individual who owns,

directly or indirectly, more than fifty percent in value of

the outstanding stock of the corporation or, if the employer

is an entity other than a corporation, of an individual who

owns, directly or indirectly, more than fifty percent of the

capital and profits interest in the entity or, if the

employer is an estate or trust, of a grantor, beneficiary or

fiduciary of the estate or trust; or

(d) is working or has worked as an

employee or as an independent contractor for an entity that

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directly or indirectly owns stock in a corporation of the

eligible employer or other interest of the eligible employer

that represents fifty percent or more of the total voting

power of that entity or has a value equal to fifty percent or

more of the capital and profits interest in the entity;

(3) "eligible employer" means an employer

that:

(a) made more than fifty percent of its

sales to persons outside New Mexico during the most recent

twelve months of the employer's modified combined tax

liability reporting periods ending prior to claiming a

high-wage jobs tax credit; or

(b) is eligible for development

training program assistance pursuant to Section 21-19-7 NMSA

1978;

(4) "modified combined tax liability" means

the total liability for the reporting period for the gross

receipts tax imposed by Section 7-9-4 NMSA 1978 together with

any tax collected at the same time and in the same manner as

the gross receipts tax, such as the compensating tax, the

withholding tax, the interstate telecommunications gross

receipts tax, the surcharges imposed by Section 63-9D-5 NMSA

1978 and the surcharge imposed by Section 63-9F-11 NMSA 1978,

minus the amount of any credit other than the high-wage jobs

tax credit applied against any or all of these taxes or

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surcharges; but "modified combined tax liability" excludes

all amounts collected with respect to local option gross

receipts taxes;

(5) "new high-wage economic-based job" means

a job created by an eligible employer on or after

July 1, 2004 and prior to July 1, 2015 that is occupied for

at least forty-eight weeks of a qualifying period by an

eligible employee who is paid wages calculated for the

qualifying period to be at least:

(a) forty thousand dollars ($40,000) if

the job is performed or based in a municipality with a

population of forty thousand or more according to the most

recent federal decennial census; and

(b) twenty-eight thousand dollars

($28,000) if the job is performed or based in a municipality

with a population of less than forty thousand according to the

most recent federal decennial census or in the unincorporated

area of a county;

(6) "qualifying period" means the period of

twelve months beginning on the day an eligible employee begins

working in a new high-wage economic-based job or the period of

twelve months beginning on the anniversary of the day an

eligible employee began working in a new high-wage

economic-based job; and

(7) "wages" means wages as defined in

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Paragraphs (1), (2) and (3) of 26 U.S.C. Section 51(c)."