SENATE BILL 568

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

INTRODUCED BY

George K. Munoz

AN ACT

RELATING TO TAXATION; EXEMPTING FOREIGN SOURCE DIVIDENDS FROM A CORPORATION'S BASE INCOME.

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

     SECTION 1. A new section of the Corporate Income and Franchise Tax Act is enacted to read:

     "[NEW MATERIAL] EXEMPTION--FOREIGN SOURCE DIVIDENDS.--Foreign source dividends received by a taxpayer are wholly or partially exempt from the taxpayer's net income as follows:

          A. seventy percent of the dividends included on lines 13 and 14, Schedule C, federal form 1120 received from corporations owned less than twenty percent by the taxpayer but only if those dividends would have been subject to the seventy percent deduction under 26 U.S.C. 243(a)(1) had the payor of the dividends been a domestic corporation;

          B. eighty percent of the dividends included on lines 13 and 14, Schedule C, federal form 1120 received from corporations owned twenty percent to eighty percent by the taxpayer but only if those dividends would have been subject to the eighty percent deduction under 26 U.S.C. 243(c) had the payor of the dividends been a domestic corporation; or

          C. one hundred percent of the dividends included on lines 13 and 14, Schedule C, federal form 1120 received from corporations owned more than eighty percent by the taxpayer but only if those dividends would have been subject to the one hundred percent deduction under 26 U.S.C. 243(a)(3) had the payor of the dividends been a domestic corporation."

     SECTION 2. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2014.

- 2 -