SENATE BILL 264

51st legislature - STATE OF NEW MEXICO - first session, 2013

INTRODUCED BY

Phil A. Griego

AN ACT

RELATING TO TAXATION; PROVIDING A MOTOR VEHICLE EXCISE TAX EXEMPTION FOR QUALIFIED PLUG-IN ELECTRIC DRIVE VEHICLES UNTIL 2018; DEFINING "QUALIFIED PLUG-IN ELECTRIC DRIVE VEHICLE" FOR PURPOSES OF CERTAIN TAX ACTS; PROVIDING GROSS RECEIPTS TAX AND COMPENSATING TAX EXEMPTIONS FOR QUALIFIED PLUG-IN ELECTRIC DRIVE VEHICLES.

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

     SECTION 1. Section 7-9-22 NMSA 1978 (being Laws 1969, Chapter 144, Section 15, as amended) is amended to read:

     "7-9-22. EXEMPTION--GROSS RECEIPTS TAX--VEHICLES.--Exempted from the gross receipts tax are the receipts from selling vehicles on which a tax is imposed by the Motor Vehicle Excise Tax Act, vehicles subject to registration under Section 66-3-16 NMSA 1978 and vehicles exempt from the motor vehicle excise tax pursuant to [Subsection] Subsections F and G of Section 7-14-6 NMSA 1978."

     SECTION 2. Section 7-9-23 NMSA 1978 (being Laws 1969, Chapter 144, Section 16, as amended) is amended to read:

     "7-9-23. EXEMPTION--COMPENSATING TAX--VEHICLES.--Exempted from the compensating tax [is] are the use of vehicles on which the tax imposed by the Motor Vehicle Excise Tax Act has been paid, the use of vehicles subject to registration under Section 66-3-16 NMSA 1978 and the use of vehicles exempt from the motor vehicle excise tax pursuant to [Subsection] Subsections F and G of Section 7-14-6 NMSA 1978."

     SECTION 3. Section 7-9J-1 NMSA 1978 (being Laws 2007, Chapter 204, Section 11) is amended to read:

     "7-9J-1. SHORT TITLE.--[Sections 11 through 18 of this act] Chapter 7, Article 9J NMSA 1978 may be cited as the "Alternative Energy Product Manufacturers Tax Credit Act"."

     SECTION 4. Section 7-9J-2 NMSA 1978 (being Laws 2007, Chapter 204, Section 12, as amended) is amended to read:

     "7-9J-2. DEFINITIONS.--As used in the Alternative Energy Product Manufacturers Tax Credit Act:

          A. "alternative energy product" means an alternative energy vehicle, fuel cell system, renewable energy system or any component of an alternative energy vehicle, fuel cell system or renewable energy system; components for integrated gasification combined cycle coal facilities and equipment related to the sequestration of carbon from integrated gasification combined cycle plants; or, beginning in taxable year 2011 and ending in taxable year 2019, a product extracted from or secreted by a single cell photosynthetic organism;

          B. "alternative energy vehicle" means a motor vehicle manufactured by an original equipment manufacturer that fully warrants and certifies that the motor vehicle meets the federal motor vehicle safety standards and is designed to be propelled in whole or in part by electricity; "alternative energy vehicle" includes a gasoline-electric hybrid motor vehicle [exempt from the motor vehicle excise tax pursuant to Subsection G of Section 7-14-6 NMSA 1978] or a qualified plug-in electric drive vehicle;

          C. "component" means a part, assembly of parts, material, ingredient or supply that is incorporated directly into an end product;

          D. "department" means the taxation and revenue department, the secretary of taxation and revenue or an employee of the department exercising authority lawfully delegated to that employee by the secretary;

          E. "fuel cell system" means a system that converts hydrogen, natural gas or waste gas to electricity without combustion, including:

                (1) a fuel cell or a system used to generate or reform hydrogen for use in a fuel cell; or

                (2) a system used to generate or reform hydrogen for use in a fuel cell, including:

                     (a) electrolyzers that use renewable energy; and

                     (b) reformers that use natural gas as the feedstock;

          F. "manufacturing" means combining or processing components or materials to increase their value for sale in the ordinary course of business, but "manufacturing" does not include construction, farming, power generation or processing natural resources;

          G. "manufacturing equipment" means an essential machine, mechanism or tool or a component of an essential machine, mechanism or tool used directly and exclusively in a taxpayer's manufacturing operation and that is subject to depreciation pursuant to the Internal Revenue Code of 1986 by the taxpayer carrying on the manufacturing; provided that "manufacturing equipment" does not include a vehicle that leaves the site of a manufacturing operation for the purpose of transporting persons or property, including property for which the taxpayer claims a credit pursuant to Section 7-9-79 NMSA 1978;

          H. "manufacturing operation" means a plant employing personnel to perform production tasks, in conjunction with manufacturing equipment not previously existing at the site, to produce alternative energy products;

          I. "modified combined tax liability" means the total liability of the taxpayer for the reporting period for the gross receipts tax imposed [by] pursuant to Section 7-9-4 NMSA 1978 [together with any tax collected at the same time and in the same manner as that gross receipts tax, such as], the compensating tax imposed pursuant to Section 7-9-7 NMSA 1978 and the withholding tax [the interstate telecommunications gross receipts tax, the surcharge 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 alternative energy product manufacturers tax credit applied against any or all of those taxes or surcharges] imposed on wages pursuant to Section 7-3-3 NMSA 1978, notwithstanding any distribution or transfer pursuant to the Tax Administration Act with respect to net receipts from those liabilities, minus the amount of a credit or deduction other than the alternative energy product manufacturers tax credit applied against those taxes; provided that "modified combined tax liability" excludes [all amounts collected with respect to] any liability resulting from a local option gross receipts [taxes] tax;

          J. "pass-through entity" means a business association other than:

                (1) a sole proprietorship;

                (2) an estate or trust;

                (3) a corporation, limited liability company, partnership or other entity that is not a sole proprietorship taxed as a corporation for federal income tax purposes for the taxable year; or

                (4) a partnership that is organized as an investment partnership in which the partner's income is derived solely from interest, dividends and sales of securities;

          K. "qualified expenditure" means an expenditure for the purchase of manufacturing equipment made after July 1, 2006 by a taxpayer approved by the department;

          L. "qualified plug-in electric drive vehicle" means a motor vehicle with four wheels that:

                (1) is made by a manufacturer;

                (2) is manufactured primarily for use on public streets, roads or highways;

                (3) has not been modified from the original manufacturer specifications;

                (4) is acquired for use or lease by a consumer and is not for resale;

                (5) is rated at not less than two thousand two hundred pounds unloaded base weight and not more than eight thousand five hundred pounds unloaded base weight;

                (6) has a maximum speed capability of at least sixty-five miles per hour; and

                (7) is propelled to a significant extent by an electric motor that draws electricity from a battery that:

                     (a) has a capacity of not less than four kilowatt-hours; and

                     (b) is capable of being recharged from an external source of electricity;

          [L.] M. "renewable energy" means energy from solar heat, solar light, wind, geothermal energy, landfill gas or biomass either singly or in combination that produces low or zero emissions and has substantial long-term production potential;

          [M.] N. "renewable energy system" means a system using only renewable energy to produce hydrogen or to generate electricity, including related cogeneration systems that create mechanical energy or that produce heat or steam for space or water heating and agricultural or small industrial processes and includes a:

                (1) photovoltaic energy system;

                (2) solar-thermal energy system;

                (3) biomass energy system;

                (4) wind energy system;

                (5) hydrogen production system; or

                (6) battery cell energy system; [and

          N.] O. "taxpayer" means a person, including a shareholder, member, partner or other owner of a pass-through entity, that is liable for payment of a tax or to whom an assessment has been made if the assessment remains unabated or the amount thereof has not been paid; and

          P. "unloaded base weight" means the weight of a vehicle without passengers or cargo."

     SECTION 5. Section 7-14-6 NMSA 1978 (being Laws 1988, Chapter 73, Section 16, as amended) is amended to read:

     "7-14-6. EXEMPTIONS FROM TAX.--

          A. A person who acquires a vehicle out of state thirty or more days before establishing a domicile in this state is exempt from the tax if the vehicle was acquired for personal use.

          B. A person applying for a certificate of title for a vehicle registered in another state is exempt from the tax if the person has previously registered and titled the vehicle in New Mexico and has owned the vehicle continuously since that time.

          C. A vehicle with a certificate of title owned by this state or any political subdivision is exempt from the tax.

          D. A person is exempt from the tax if the person has a disability at the time the person purchases a vehicle and can prove to the motor vehicle division of the department or its agent that modifications have been made to the vehicle that are:

                (1) due to that person's disability; and

                (2) necessary to enable that person to drive that vehicle or be transported in that vehicle.

          E. A person is exempt from the tax if the person is a bona fide resident of New Mexico who served in the armed forces of the United States and who suffered, while serving in the armed forces or from a service-connected cause, the loss or complete and total loss of use of:

                (1) one or both legs at or above the ankle; or

                (2) one or both arms at or above the wrist.

          F. A person who acquires a vehicle for subsequent lease shall be exempt from the tax if:

                (1) the person does not use the vehicle in any manner other than holding it for lease or sale or leasing or selling it in the ordinary course of business;

                (2) the lease is for a term of more than six months;

                (3) the receipts from the subsequent lease are subject to the gross receipts tax; and

                (4) the vehicle does not have a gross vehicle weight of over twenty-six thousand pounds.

          G. From July 1, [2004] 2013 through June 30, [2009] 2018, vehicles that are [gasoline-electric hybrid vehicles with a United States environmental protection agency fuel economy rating of at least twenty-seven and one-half miles per gallon] qualified plug-in electric drive vehicles are eligible for a one-time exemption from the tax at the time of the issuance of the original certificate of title for the vehicle.

          H. As used in this section:

                (1) "qualified plug-in electric drive vehicle" means a motor vehicle with four wheels that:

                     (a) is made by a manufacturer;

                     (b) is manufactured primarily for use on public streets, roads or highways;

                     (c) has not been modified from the original manufacturer specifications;

                     (d) is acquired for use or lease by a consumer and is not for resale;

                     (e) is rated at not less than two thousand two hundred pounds unloaded base weight and not more than eight thousand five hundred pounds unloaded base weight;

                     (f) has a maximum speed capability of at least sixty-five miles per hour; and

                     (g) is propelled to a significant extent by an electric motor that draws electricity from a battery that: 1) has a capacity of not less than four kilowatt-hours; and 2) is capable of being recharged from an external source of electricity; and

                (2) "unloaded base weight" means the weight of a vehicle without passengers or cargo."

     SECTION 6. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2013.

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