SENATE FINANCE COMMITTEE SUBSTITUTE FOR

SENATE CORPORATIONS AND TRANSPORTATION COMMITTEE SUBSTITUTE FOR

SENATE BILL 265

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

AN ACT

RELATING TO TAXATION; PROVIDING FOR A CREDIT AGAINST THE GAMING TAX TO OFFSET THE EXPENSE OF LIVE HORSE RACES.

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

     SECTION 1. A new section of the Gaming Control Act is enacted to read:

     "[NEW MATERIAL] LIVE HORSE RACE GAMING TAX CREDIT.--

          A. Beginning on July 1, 2014 and prior to July 1, 2017, a taxpayer that is a gaming operator licensee that is a racetrack may claim, and the taxation and revenue department may allow subject to the limitations pursuant to Subsection C of this section, a tax credit in an amount not to exceed:

                (1) twelve thousand five hundred dollars ($12,500) for each day that a live horse race is conducted at the licensee's premises during a fiscal year; provided that the gaming operator licensee paid gaming tax in an amount equal to ten million dollars ($10,000,000) or less in the fiscal year immediately prior to the fiscal year in which the taxpayer claims the tax credit; or

                (2) seven thousand five hundred dollars ($7,500) for each day that a live horse race is conducted at the licensee's premises during a fiscal year; provided that the gaming operator licensee paid gaming tax in an amount equal to more than ten million dollars ($10,000,000) in the fiscal year immediately prior to the fiscal year in which the taxpayer claims the tax credit.

          B. The tax credit that may be claimed pursuant to this section may be referred to as the "live horse race gaming tax credit".

          C. The aggregate amount of live horse race gaming tax credits provided pursuant to this section that the taxation and revenue department may allow in a fiscal year shall not exceed three million dollars ($3,000,000). If the aggregate amount of live horse race gaming tax credits claimed exceeds the limitation in this subsection, the available amount of tax credits shall be prorated among the taxpayers eligible for the live horse race gaming tax credit in that fiscal year. The maximum tax credit amount an individual taxpayer may claim shall not exceed seventy-five percent of the gaming tax liability due from that taxpayer in that fiscal year.

          D. Subject to the provisions of this section, the tax credit provided for in this section may be claimed on a monthly basis against the gaming tax remitted to the state on a form provided by the taxation and revenue department. The tax credit claimed each month shall not exceed the lesser of one-twelfth of seventy-five percent of the gaming tax paid in the prior fiscal year or seventy-five percent of the taxpayer's monthly gaming tax liability pursuant to Section 60-2E-47 NMSA 1978. Any additional tax credit that may be allowed may be claimed in the last month of the fiscal year.

          E. The purpose of the live horse race gaming tax credit is to offset the expense of each day that live horse racing is conducted at the premises of a gaming operator licensee that is a racetrack and to promote live horse racing days in New Mexico.

          F. To be eligible for the live horse race gaming tax credit, a gaming operator licensee that is a racetrack shall:

                (1) conduct at least one more day of live horse racing and at least one more quarter horse race in the current fiscal year for which the tax credit is being claimed than in the fiscal year immediately prior to the fiscal year in which the tax credit is being claimed; provided that if the gaming operator licensee claimed a tax credit and was denied the credit, the licensee shall only be required to conduct one more day of live horse racing and one more quarter horse race than in the most recent fiscal year in which a tax credit was claimed and approved or than in the fiscal year in which the gaming operator licensee first claimed a live horse race gaming tax credit, whichever is most recent; or

                (2) conduct at least five more days of live horse racing and at least five more quarter horse races in the current fiscal year for which the tax credit is being claimed than in the fiscal year immediately prior to the fiscal year in which the gaming operator licensee first claimed and was approved a live horse race gaming tax credit.

          G. The state racing commission shall certify the eligibility of a gaming operator licensee that is a racetrack for purposes of obtaining a live horse race gaming tax credit and shall promulgate rules establishing procedures for certification. The rules shall ensure compliance with the provisions of Subsection C of this section and that a taxpayer shall not be eligible for the live horse racing gaming tax credit if during any fiscal year the taxpayer conducts fewer days of live horse racing than the taxpayer conducted during the fiscal year in which the taxpayer first claimed a live horse race gaming tax credit. The state racing commission shall issue a dated certificate of eligibility containing the identifying information of the taxpayer that qualifies for the live horse race gaming tax credit. All certificates of eligibility issued pursuant to this subsection shall be sequentially numbered, and an account of all certificates issued or destroyed shall be maintained by the state racing commission. The taxation and revenue department shall audit the records of the live horse race gaming tax credit maintained by the state racing commission on a periodic basis to ensure effective administration of the tax credit and compliance with the Tax Administration Act and the provisions of this section.

          H. To claim a live horse race gaming tax credit, the taxpayer shall provide to the taxation and revenue department the certificate of eligibility issued by the state racing commission to the taxpayer pursuant to this section.

          I. The taxpayer shall report to the state racing commission the number of live horse racing days conducted in a fiscal year and the increase from a prior fiscal year, the number of New Mexico breed races held and the number of New Mexico-bred horses that raced at the licensee's premises and any other information that the state racing commission requires to determine the eligibility of the taxpayer and the effectiveness of the live horse race gaming tax credit.

          J. The taxation and revenue department, with the cooperation of the state racing commission, shall compile an annual report on the live horse race gaming tax credit created pursuant to this section that shall include the number of taxpayers approved by the department to receive the tax credit, the aggregate amount of tax credits approved and any other information necessary to evaluate the effectiveness of the tax credit. In 2016, the taxation and revenue department shall compile and present the annual reports to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the effectiveness and cost of the tax credit and whether the tax credit is performing the purpose for which it was created.

          K. The live horse race gaming tax credit shall be administered by the taxation and revenue department pursuant to the Tax Administration Act."

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

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