SENATE BILL 426

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

INTRODUCED BY

Linda M. Lopez

AN ACT

RELATING TO TAXATION; AMENDING THE INVESTMENT CREDIT ACT TO ENABLE GREATER PARTICIPATION IN THAT CREDIT; CLARIFYING PROVISIONS OF THE INVESTMENT CREDIT ACT.

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

     SECTION 1. Section 7-9A-2 NMSA 1978 (being Laws 1979, Chapter 347, Section 2, as amended) is amended to read:

     "7-9A-2. PURPOSE OF ACT.--[It is the purpose] The purposes of the Investment Credit Act are:

          A. to provide a favorable tax climate for manufacturing businesses; and

          B. to promote increased employment or wages in New Mexico."

     SECTION 2. Section 7-9A-4 NMSA 1978 (being Laws 1979, Chapter 347, Section 4, as amended by Laws 1991, Chapter 159, Section 3 and also by Laws 1991, Chapter 162, Section 3) is amended to read:

     "7-9A-4. ADMINISTRATION OF THE ACT.--The department is charged with the administration of the Investment Credit Act pursuant to the provisions of the Tax Administration Act."

     SECTION 3. Section 7-9A-5 NMSA 1978 (being Laws 1979, Chapter 347, Section 5, as amended by Laws 1991, Chapter 159, Section 4 and also by Laws 1991, Chapter 162, Section 4) is amended to read:

     "7-9A-5. INVESTMENT CREDIT--AMOUNT--CLAIMANT.--The investment credit provided for in the Investment Credit Act is an amount equal to the percent of the compensating tax rate provided for in the Gross Receipts and Compensating Tax Act applied to the value of the qualified equipment and may be claimed by the taxpayer [carrying on] engaged in a manufacturing operation in New Mexico."

     SECTION 4. Section 7-9A-7.1 NMSA 1978 (being Laws 1983, Chapter 206, Section 6, as amended) is amended to read:

     "7-9A-7.1. EMPLOYMENT REQUIREMENTS.--

          A. Prior to July 1, 2020, to be eligible to claim a credit pursuant to the Investment Credit Act, the taxpayer shall:

                (1) employ the equivalent of one full-time employee who has not been counted to meet this employment requirement for any prior claim in addition to the number of full-time employees employed on the day one year prior to the day on which the taxpayer applies for the credit for every:

                     [(1)] (a) five hundred thousand dollars ($500,000), or portion of that amount, in value of qualified equipment claimed by the taxpayer in a taxable year in the same claim, up to a value of thirty million dollars ($30,000,000); [and] or

                     [(2)] (b) one million dollars ($1,000,000), or portion of that amount, in value of qualified equipment over thirty million dollars ($30,000,000) claimed by the taxpayer in a taxable year in the same claim; or

                (2) increase the aggregate annual wages paid to all full-time employees in the taxable year by an amount equal to the average of the annual wages and benefits paid to all employees by the taxpayer in the year prior to the taxable year for every:

                     (a) five hundred thousand dollars ($500,000), or portion of that amount, in value of qualified equipment claimed by the taxpayer in a taxable year in the same claim, up to a value of thirty million dollars ($30,000,000); or

                     (b) one million dollars ($1,000,000), or portion of that amount, in value of qualified equipment over thirty million dollars ($30,000,000) claimed by the taxpayer in a taxable year in the same claim.

          B. After June 30, 2020, for every one hundred thousand dollars ($100,000) in value of qualified equipment claimed by a taxpayer in a taxable year, the taxpayer shall:

                (1) employ the equivalent of one full-time employee in addition to the number of full-time employees employed on the day one year prior to the day on which the taxpayer applies for credit; or

                (2) increase the aggregate annual wages paid to all full-time employees in the taxable year by at least an amount equal to the average of the annual wages and benefits paid to all employees by the taxpayer in the year prior to the taxable year.

          C. The department may require evidence showing compliance with this section. The department may find that an additional employee meets the requirements of this section, although employed earlier than one year prior to the day on which the taxpayer applies for the credit, if the employee was only being trained prior to that date or the employee's employment was necessitated by the use of the qualified equipment."

     SECTION 5. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2013.

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