HOUSE BILL 346

49th legislature - STATE OF NEW MEXICO - first session, 2009

INTRODUCED BY

Mimi Stewart

AN ACT

RELATING TO TAXATION; IMPOSING AN EDUCATION SURTAX ON GROSS RECEIPTS AND COMPENSATING TAX FOR DISTRIBUTION TO THE PUBLIC SCHOOL FUND; REVERSING PART OF THE PERSONAL INCOME TAX CHANGES MADE IN LAWS 2005, CHAPTER 104; PROVIDING A CONTINGENCY; MAKING AN APPROPRIATION.

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

     Section 1. A new section of the Tax Administration Act is enacted to read:

     "[NEW MATERIAL] DISTRIBUTION--PUBLIC SCHOOL FUND--EDUCATION SURTAX RECEIPTS.--A distribution pursuant to Section 7-1-6.1 NMSA 1978 of the net receipts attributable to the education surtax shall be made to the public school fund."

     Section 2. A new section of the Tax Administration Act is enacted to read:

     "[NEW MATERIAL] INCOME TAX ALLOCATED TO THE PUBLIC SCHOOL FUND--CALCULATION.--A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the public school fund in the amount of the net receipts attributable to the difference between personal income tax received by the department under Section 3 of this act and the amount that would have been received by the department pursuant to personal income tax rates in effect on January 1, 2008. The department shall adopt rules for calculating the amount to be distributed to the public school fund."

     Section 3. Section 7-2-7 NMSA 1978 (being Laws 2005, Chapter 104, Section 4, as amended) is repealed and a new Section 7-2-7 NMSA 1978 is enacted to read:

     "7-2-7. [NEW MATERIAL] INDIVIDUAL INCOME TAX RATES.--The tax imposed by Section 7-2-3 NMSA 1978 shall be at the following rates for a taxable year beginning in 2010:

          A. For married individuals filing separate returns:

If the taxable income is:             The tax shall be:

Not over $4,000                       1.7% of taxable income

Over $4,000 but not over $8,000       $68.00 plus 3.2% of

                                      excess over $4,000

Over $8,000 but not over $12,000      $196 plus 4.7% of excess

                                      over $8,000

Over $12,000 $384 plus 6.0% of excess

                                      over $12,000.

          B. For surviving spouses and married individuals filing joint returns:

If the taxable income is: The tax shall be:

Not over $8,000    1.7% of taxable income

Over $8,000 but not over $16,000    $136 plus 3.2% of excess                                       over $8,000

Over $16,000 but not over $24,000    $392 plus 4.7% of excess                                       over $16,000

Over $24,000                          $768 plus 6.0% of excess

                                      over $24,000.

          C. For single individuals and for estates and trusts:

If the taxable income is:             The tax shall be:

Not over $5,500                       1.7% of taxable income

Over $5,500 but not over $11,000      $93.50 plus 3.2% of                                        excess over $5,500

Over $11,000 but not over $16,000     $269.50 plus 4.7% of                                       excess over $11,000

Over $16,000                          $504.50 plus 6.0% of                                       excess over $16,000.

          D. For heads of household filing returns:

If the taxable income is:             The tax shall be:

Not over $7,000                       1.7% of taxable income

Over $7,000 but not over $14,000      $119 plus 3.2% of excess

                                      over $7,000

Over $14,000 but not over $20,000     $343 plus 4.7% of excess

                                      over $14,000

Over $20,000                          $625 plus 6.0% of excess

                                      over $20,000.

          E. The tax on the sum of any lump-sum amounts included in net income is an amount equal to five multiplied by the difference between:

                (1) the amount of tax due on the taxpayer's taxable income; and

                (2) the amount of tax that would be due on an amount equal to the taxpayer's taxable income and twenty percent of the taxpayer's lump-sum amounts included in net income."

     Section 4. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

     "[NEW MATERIAL] GROSS RECEIPTS--EDUCATION SURTAX.--The gross receipts tax shall be increased by a surtax, hereby imposed, of one-half of one percent of gross receipts. The surtax may be referred to as the "education surtax". The department shall administer and enforce collection of the education surtax pursuant to the provisions of the Tax Administration Act and the Gross Receipts and Compensating Tax Act in the same manner as the gross receipts tax."

     Section 5. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

     "[NEW MATERIAL] COMPENSATING TAX--EDUCATION SURTAX.--The compensating tax shall be increased by a surtax, hereby imposed, of one-half of one percent of the value of tangible property as provided in Section 7-9-7 NMSA 1978. The surtax may be referred to as the "education surtax". The department shall administer and enforce collection of the education surtax pursuant to the provisions of the Tax Administration Act and the Gross Receipts and Compensating Tax Act in the same manner as the gross receipts tax."

     Section 6. APPLICABILITY.--The provisions of Section 3 of this act apply to taxable years beginning on or after January 1, 2010.

     Section 7. EFFECTIVE DATE--CONTINGENCY.--

          A. Except as provided in Subsection B of this section, the effective date of the provisions of this act is July 1, 2009.

           B. This act is contingent upon the enactment into law of a bill of the first session of the forty-ninth legislature that provides a new method for determining the state equalization guarantee distribution to public schools. If no such bill is enacted into law, the provisions of this act shall not become effective.

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