SENATE BILL 260

50th legislature - STATE OF NEW MEXICO - second session, 2012

INTRODUCED BY

Mark Boitano

AN ACT

RELATING TO TAXATION; PROVIDING A DEDUCTION FROM GROSS RECEIPTS FOR CERTAIN SMALL BUSINESSES.

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

     SECTION 1. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

     "[NEW MATERIAL] DEDUCTION--SMALL BUSINESSES--APPLICATIONS--REPORTING.--

          A. Receipts of a small business may be deducted from gross receipts if the total gross receipts of the taxpayer in the preceding calendar year did not exceed fifty thousand dollars ($50,000), inclusive of receipts that are exempt or deductible pursuant to other sections of the Gross Receipts and Compensating Tax Act.

          B. The purposes of the deduction provided in this section are to:

                (1) reduce the tax burden on the smallest businesses in New Mexico and thereby provide additional financial resources to sustain and grow small businesses; and

                (2) offset the disproportionate costs of tax compliance and reporting for small businesses.

          C. To receive the deduction provided in this section, a taxpayer shall file with the department an application on a form and in a manner required by the department for the specific calendar year in which the taxpayer wishes to take the deduction. The application shall include:

                (1) for an existing taxpayer:

                     (a) the total gross receipts of the taxpayer in the preceding calendar year; and

                     (b) any other information required by the department to determine if the taxpayer is eligible to take the deduction; and

                (2) for a taxpayer that has been engaging in business for less than one full calendar year at the time the application for a deduction is filed with the department:

                     (a) the total gross receipts of the taxpayer for the part of the calendar year in which the taxpayer was engaging in business; and

                     (b) any other information required by the department to determine if the taxpayer is eligible to take the deduction.

          D. If an eligible taxpayer's total gross receipts for the calendar year exceed fifty thousand dollars ($50,000), the taxpayer shall:

                (1) file a report stating the taxpayer's total gross receipts for the calendar year, taking the deduction as allowed for the first fifty thousand dollars ($50,000) pursuant to this section and any other deductions that the taxpayer is eligible to take;

                (2) calculate and submit the gross receipts tax owed on the excess gross receipts above fifty thousand dollars ($50,000);

                (3) file the report by the twenty-fifth day of the month following the month in which the taxpayer's gross receipts exceeded fifty thousand dollars ($50,000);

                (4) file gross receipts reports monthly for the remainder of the calendar year; and

                (5) not apply for a deduction pursuant to this section in the next calendar year.

          E. An eligible taxpayer shall file with the department an annual report in a form and manner determined by the department no later than January 25 of each year following a year in which the taxpayer takes a deduction pursuant to this section in which the taxpayer's gross receipts for the preceding calendar year are reported.

          F. As used in this section:

                (1) "eligible taxpayer" means a taxpayer who has submitted an application to the department to take a deduction in a specified calendar year pursuant to this section and has received approval from the department to take the deduction for the calendar year specified;

                (2) "small business" means an entity engaged in doing business that has total gross receipts in a calendar year of fifty thousand dollars ($50,000) or less; and

                (3) "total gross receipts" means, in regard to a taxpayer that has any business structure, the gross receipts for all persons who own, directly or indirectly, any interest in the capital or profits in the business that are derived from substantially the same activities as those of the taxpayer."

     SECTION 2. EFFECTIVE DATE.--The effective date of the provisions of this act is January 1, 2013.

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