SB0010

SENATE BILL 10

51st legislature - STATE OF NEW MEXICO - second session, 2014

INTRODUCED BY

Mary Kay Papen and Nate Gentry

AN ACT

RELATING TO TAXATION; CREATING THE NEW REVENUE INCOME TAX CREDIT AND THE NEW REVENUE CORPORATE INCOME TAX CREDIT; REDUCING THE AMOUNT OF GROSS RECEIPTS TAX INCREMENTS A TAXING ENTITY MAY AGREE TO DEDICATE PURSUANT TO THE TAX INCREMENT FOR DEVELOPMENT ACT; REQUIRING CIGARETTE STAMPS TO BE SOLD AT FACE VALUE; REMOVING THE IMPOSITION OF THE MOTOR VEHICLE EXCISE TAX AND THE EXEMPTION FROM THE GROSS RECEIPTS TAX AND COMPENSATING TAX ON ALL-TERRAIN AND RECREATIONAL VEHICLES; REPEALING SECTIONS OF THE GROSS RECEIPTS AND COMPENSATING TAX ACT.

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

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

"[NEW MATERIAL] NEW REVENUE INCOME TAX CREDIT.--

A. A taxpayer who is not a dependent of another individual and who creates new jobs or makes a capital investment in the state may apply for, and the department may allow, a credit of thirty percent of new revenue created by the taxpayer against the taxpayer's tax liability imposed pursuant to the Income Tax Act. The credit provided in this section may be referred to as the "new revenue income tax credit".

B. The purposes of the new revenue income tax credit are to:

(1) encourage businesses that would not do so without the new revenue income tax credit to relocate or expand their operations in New Mexico;

(2) encourage businesses to create well-paid jobs and make capital investments in New Mexico;

(3) generate new revenue for the state; and

(4) strengthen and diversify the state's economy.

C. The new revenue income tax credit may be claimed and allowed in an amount equal to thirty percent of new revenue created by a taxpayer in the taxable year in which a taxpayer's qualifying period closes. The credit may be claimed for up to twenty consecutive qualifying periods, beginning in the taxable year in which a taxpayer first claims a new revenue income tax credit; provided that a new revenue income tax credit claimed in subsequent years shall not be allowed for the same new jobs or capital investment for which a new revenue income tax credit has previously been claimed and approved.

D. That portion of a new revenue income tax credit approved by the department that exceeds a taxpayer's income tax liability in the taxable year in which the credit is claimed shall be refunded to the taxpayer.

E. To claim a new revenue income tax credit, a taxpayer shall apply for approval to the department after the close of a taxpayer's qualifying period, but not later than twelve months following the end of the calendar year in which the taxpayer's qualifying period closes. The application shall be on forms and in a manner required by the department and shall include a certificate of eligibility issued by the economic development department pursuant to Subsection M of this section and any other information the department may require to determine the amount of the credit due the taxpayer.

F. To be eligible for a new revenue income tax credit, a taxpayer shall:

(1) have created a minimum number of new jobs in a qualifying period in which a new revenue income tax credit is claimed, as follows:

(a) at least five jobs if the jobs are performed or based in a municipality with a population of less than sixty thousand according to the most recent federal decennial census, or in an unincorporated area that is not within ten miles of the external boundaries of a municipality with a population of sixty thousand or more, of a county other than a class H county; or

(b) at least ten jobs if the jobs are performed or based in or within ten miles of the external boundaries of a municipality with a population of sixty thousand or more according to the most recent federal decennial census or in a class H county; or

(2) have made a minimum amount of capital investment in a qualifying period in which a new revenue income tax credit is being claimed, as follows:

(a) at least two million five hundred thousand dollars ($2,500,000) if the capital investment is made in a municipality with a population of less than sixty thousand according to the most recent federal decennial census, or in an unincorporated area that is not within ten miles of the external boundaries of a municipality with a population of sixty thousand or more, of a county other than a class H county; or

(b) at least five million dollars ($5,000,000) if the capital investment is made in or within ten miles of the external boundaries of a municipality with a population of sixty thousand or more according to the most recent federal decennial census or in a class H county.

G. A taxpayer shall not be eligible for a credit pursuant to Paragraph (1) of Subsection F of this section unless the taxpayer's total number of new jobs on the last day of a qualifying period at the location at which the new jobs are performed or based is at least:

(1) five more than the number on the last day of the prior qualifying period if the taxpayer claims a credit pursuant to Subparagraph (a) of Paragraph (1) of Subsection F of this section; and

(2) ten more than the number on the last day of the prior qualifying period if the taxpayer claims a credit pursuant to Subparagraph (b) of Paragraph (1) of Subsection F of this section.

H. A taxpayer who provides retail sales of goods or services is not eligible for the new revenue income tax credit if the taxpayer made less than fifty percent of its sales or services produced in New Mexico to persons outside New Mexico during the applicable qualifying period.

I. A job shall not be considered a new job pursuant to this section if:

(1) the job is created due to a business merger or acquisition or other change in business organization;

(2) the eligible employee was terminated from employment in New Mexico by another employer involved in the business merger or acquisition or other change in business organization with the taxpayer; or

(3) the job is performed by:

(a) the person who performed the job or its functional equivalent prior to the business merger or acquisition or other change in business organization; or

(b) a person replacing the person who performed the job or its functional equivalent prior to a business merger or acquisition or other change in business organization.

J. Notwithstanding the provisions of Subsection I of this section, a new job that was created by another employer and for which an application for the new revenue income tax credit was received and is under review by the economic development department prior to the time of the business merger or acquisition or other change in business organization shall remain eligible for the new revenue income tax credit. The new employer that results from a business merger or acquisition or other change in business organization may only claim the new revenue income tax credit for the qualifying period for which the new job is otherwise eligible.

K. A job shall not be considered a new job pursuant to this section if the job is created due to a taxpayer entering into a contract or becoming a subcontractor to a contract with a governmental entity that replaces one or more entities performing functionally equivalent services for the governmental entity unless the job is one that was not being performed by an employee of the replaced entity.

L. A taxpayer seeking a new revenue income tax credit shall apply for a certificate of eligibility from the economic development department. An application for the certificate shall include:

(1) if the taxpayer is seeking a credit based on requirements pursuant to Paragraph (1) of Subsection F of this section:

(a) the amount of wages paid to each eligible employee in a new job during a qualifying period;

(b) the number of weeks the position was occupied during the qualifying period;

(c) whether the job meets the criteria described in Subparagraph (a) or (b) of Paragraph (6) of Subsection W of this section; and

(d) the total number of new jobs created by the taxpayer at the job location on the day prior to the qualifying period and on the last day of the qualifying period;

(2) if the taxpayer is seeking a credit based on requirements pursuant to Paragraph (2) of Subsection F of this section:

(a) the amount of capital investment in the qualifying period for which the new revenue income tax credit is being claimed; and

(b) the county in which the capital investment was made; and

(3) certification by the taxpayer that, if not for the new revenue income tax credit, the taxpayer would not have created new jobs or made a capital investment as required by Subsection F of this section.

M. If the economic development department determines that a taxpayer has met the requirements of this section and is eligible to receive a new revenue income tax credit, it shall issue a certificate of eligibility to the taxpayer.

N. The new revenue income tax credit shall not be claimed with respect to the same job or capital investment, as applicable, for which a high-wage jobs tax credit or rural job tax credit has been claimed, or for which a credit has been claimed pursuant to the Investment Credit Act or the Technology Jobs Tax Credit Act.

O. A taxpayer who, in a qualifying period, has received funds for a development training program pursuant to Section 21-19-7 NMSA 1978 or has entered into a project participation agreement pursuant to the Local Economic Development Act is not eligible for the new revenue income tax credit for that qualifying period.

P. If an eligible employee who was hired to fill a new job is terminated by the taxpayer for a reason other than for good cause within five years of being hired to fill the new job and the taxpayer's eligibility for the new revenue income tax credit was based on creating new jobs pursuant to Paragraph (1) of Subsection F of this section, the taxpayer shall remit to the department an amount of the new revenue income tax credit taken by the taxpayer for each terminated employee. The amount of credit remitted for the terminated employee shall be calculated as a percentage that the total terminated employee's job bears to the total number of new jobs created during the qualifying period in which the terminated employee was hired, multiplied by the new revenue income tax credit claimed for that qualifying period.

Q. If a taxpayer or a successor in business of the taxpayer ceases operations in New Mexico for at least one hundred eighty consecutive days within a two-year period after the taxpayer has claimed a new revenue income tax credit at a facility with respect to which the taxpayer has claimed the credit, the department shall grant no further credit to the taxpayer with respect to that facility. In addition, any amount of credit not claimed against the taxpayer's income tax liability shall be extinguished, and within thirty days after the one hundred eightieth day of the cessation of operations, the taxpayer shall pay the amount of any income tax against which an approved credit was taken. For purposes of this section, a taxpayer shall not be deemed to have ceased operations during reasonable periods for maintenance or retooling or for the repair or replacement of facilities damaged or destroyed or during the continuance of labor disputes.

R. A husband and wife filing separate returns for a taxable year for which they could have filed a joint return may each claim only one-half of the new revenue income tax credit that would have been claimed on a joint return.

S. A taxpayer may be allocated the right to claim a new revenue income tax credit in proportion to the taxpayer's ownership interest if the taxpayer owns an interest in a business entity that is taxed for federal income tax purposes as a partnership and that business entity has met all of the requirements to be eligible for the credit. The total credit claimed by all members of the partnership or limited liability company shall not exceed the allowable credit pursuant to this section.

T. A taxpayer allowed a credit pursuant to this section shall report the amount of the credit to the department in a manner required by the department.

U. The department shall compile an annual report on the new revenue income tax credit that shall include the number of taxpayers approved by the department to receive the credit, the aggregate amount of credits approved and any other information necessary to evaluate the effectiveness of the credit. Beginning in 2020 and every five years thereafter that the credit is in effect, the 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 credit and whether the credit is performing the purposes for which it was created.

V. The department shall promulgate rules to implement the provisions of this section. The economic development department shall promulgate rules establishing procedures to provide a certificate of eligibility for purposes of obtaining a new revenue income tax credit pursuant to this section.

W. As used in this section:

(1) "benefits" means all remuneration for work performed that is provided to an employee in whole or in part by the employer, other than wages, including insurance programs, health care, medical, dental and vision plans, life insurance, employer contributions to pensions, such as a 401(k), and employer-provided services, such as child care, offered by an employer to the employee. "Benefits" does not include the employer's share of payroll taxes, social security or medicare contributions, federal or state unemployment insurance contributions or workers' compensation;

(2) "capital investment" means capital investment in equipment, land, buildings or infrastructure, any of which is necessary to support new or expanding business activity;

(3) "eligible employee" means an individual who is employed in New Mexico and who is a resident of New Mexico; "eligible employee" does not include an individual who:

(a) bears any of the relationships described in Subsection (a) of Section 152 of the Internal Revenue Code to the employer or, if the employer is a corporation, to an individual who owns, directly or indirectly, more than fifty percent in value of the outstanding stock of the corporation or, if the employer is an entity other than a corporation, to an individual who owns, directly or indirectly, more than fifty percent of the capital and profits interest in the entity;

(b) if the employer is an estate or trust, is a grantor, beneficiary or fiduciary of the estate or trust or is an individual who bears any of the relationships described in Subsection (a) of Section 152 of the Internal Revenue Code to a grantor, beneficiary or fiduciary of the estate or trust; or

(c) is working or has worked as an employee or as an independent contractor for an entity that, directly or indirectly, owns stock in a corporation of the eligible employer or other interest of the eligible employer that represents fifty percent or more of the total voting power of that entity or has a value equal to fifty percent or more of the capital and profits interest in the entity;

(4) "equipment" means an essential machine, mechanism or tool, or a component or fitting thereof, used directly and exclusively in a manufacturing operation and subject to depreciation for purposes of the Internal Revenue Code by the taxpayer carrying on the manufacturing operation. "Equipment" does not include any vehicle that leaves the site of the manufacturing operation for purposes of transporting persons or property or any property for which the taxpayer claims the credit pursuant to Section 7-9-79 NMSA 1978;

(5) "modified combined tax liability" means the total liability for the reporting period for the gross receipts tax imposed by Section 7-9-4 NMSA 1978 together with any tax collected at the same time and in the same manner as the gross receipts tax, such as the compensating tax, 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 or deduction applied against any or all of these taxes or surcharges; but "modified combined tax liability" excludes all amounts collected with respect to local option gross receipts taxes;

(6) "new job" means a job created in New Mexico by a taxpayer that is occupied for at least forty-eight weeks of a qualifying period by an eligible employee who is paid wages calculated for the qualifying period to be at least:

(a) one hundred twenty-five percent of the annual average wage for the area if the job is performed or based in or within ten miles of the external boundaries of a municipality with a population of sixty thousand or more according to the most recent federal decennial census or in a class H county; or

(b) one hundred percent of the annual average wage for the area if the job is performed or based in a municipality with a population of less than sixty thousand according to the most recent federal decennial census or in the unincorporated area, that is not within ten miles of the external boundaries of a municipality with a population of sixty thousand or more, of a county other than a class H county;

(7) "new revenue" means the difference between:

(a) the sum of the amount of a taxpayer's modified combined tax liability and tax liability pursuant to the Income Tax Act, minus the amount of any income tax credit or deduction other than the new revenue income tax credit, in a taxpayer's taxable year; and

(b) the sum of the amount of a taxpayer's modified combined tax liability and tax liability pursuant to the Income Tax Act, minus the amount of any income tax credit or deduction other than the new revenue income tax credit, in the taxable year immediately prior to the taxpayer's taxable year;

(8) "qualifying period" means the period of twelve months beginning on the day an eligible employee begins working in a new job or the period of twelve months beginning on the day the first dollar of a capital investment is made; and

(9) "wages" means all compensation paid by a taxpayer to an eligible employee through the taxpayer's payroll system, including those wages that the employee elects to defer or redirect or the employee's contribution to a 401(k) or cafeteria plan program, but "wages" does not include benefits or the employer's share of payroll taxes."

SECTION 2. A new section of the Corporate Income and Franchise Tax Act is enacted to read:

"[NEW MATERIAL] NEW REVENUE CORPORATE INCOME TAX CREDIT.--

A. A taxpayer that creates new jobs or makes a capital investment in the state may apply for, and the department may allow, a credit of thirty percent of new revenue created by the taxpayer against the taxpayer's tax liability imposed pursuant to the Corporate Income and Franchise Tax Act. The credit provided in this section may be referred to as the "new revenue corporate income tax credit".

B. The purposes of the new revenue corporate income tax credit are to:

(1) encourage businesses that would not do so without the new revenue corporate income tax credit to relocate or expand their operations in New Mexico;

(2) encourage businesses to create well-paid jobs and make capital investments in New Mexico;

(3) generate new revenue for the state; and

(4) strengthen and diversify the state's economy.

C. The new revenue corporate income tax credit may be claimed and allowed in an amount equal to thirty percent of new revenue created by a taxpayer in the taxable year in which a taxpayer's qualifying period closes. The credit may be claimed for up to twenty consecutive qualifying periods, beginning in the taxable year in which a taxpayer first claims a new revenue corporate income tax credit; provided that a new revenue corporate income tax credit claimed in subsequent years shall not be allowed for the same new jobs or capital investment for which a new revenue corporate income tax credit has previously been claimed and approved.

D. That portion of a new revenue corporate income tax credit approved by the department that exceeds a taxpayer's corporate income and franchise tax liability in the taxable year in which the credit is claimed shall be refunded to the taxpayer.

E. To claim a new revenue corporate income tax credit, a taxpayer shall apply for approval to the department after the close of a taxpayer's qualifying period, but not later than twelve months following the end of the calendar year in which the taxpayer's qualifying period closes. The application shall be on forms and in a manner required by the department and shall include a certificate of eligibility issued by the economic development department pursuant to Subsection M of this section and any other information the department may require to determine the amount of the credit due the taxpayer.

F. To be eligible for a new revenue corporate income tax credit, a taxpayer shall:

(1) have created a minimum number of new jobs in a qualifying period in which a new revenue corporate income tax credit is claimed, as follows:

(2) have made a minimum amount of capital investment in a qualifying period in which a new revenue income tax credit is being claimed, as follows:

(1) five more than the number on the last day of the prior qualifying period if the taxpayer claims a credit pursuant to Subparagraph (a) of Paragraph (1) of Subsection F of this section; and

(2) ten more than the number on the last day of the prior qualifying period if the taxpayer claims a credit pursuant to Subparagraph (b) of Paragraph (1) of Subsection F of this section.

H. A taxpayer that provides retail sales of goods or services is not eligible for the new revenue corporate income tax credit if the taxpayer made less than fifty percent of its sales or services produced in New Mexico to persons outside New Mexico during the applicable qualifying period.

I. A job shall not be considered a new job pursuant to this section if:

(1) the job is created due to a business merger or acquisition or other change in business organization;

(3) the job is performed by:

(a) the person who performed the job or its functional equivalent prior to the business merger or acquisition or other change in business organization; or

(b) a person replacing the person who performed the job or its functional equivalent prior to a business merger or acquisition or other change in business organization.

J. Notwithstanding the provisions of Subsection I of this section, a new job that was created by another employer and for which an application for the new revenue corporate income tax credit was received and is under review by the economic development department prior to the time of the business merger or acquisition or other change in business organization shall remain eligible for the new revenue corporate income tax credit. The new employer that results from a business merger or acquisition or other change in business organization may only claim the new revenue corporate income tax credit for the qualifying period for which the new job is otherwise eligible.

L. A taxpayer seeking a new revenue corporate income tax credit shall apply for a certificate of eligibility from the economic development department. An application for the certificate shall include:

(1) if the taxpayer is seeking a credit based on requirements pursuant to Paragraph (1) of Subsection F of this section:

(a) the amount of wages paid to each eligible employee in a new job during a qualifying period;

(b) the number of weeks the position was occupied during the qualifying period;

(c) whether the job meets the criteria described in Subparagraph (a) or (b) of Paragraph (6) of Subsection U of this section; and

(d) the total number of new jobs created by the taxpayer at the job location on the day prior to the qualifying period and on the last day of the qualifying period;

(2) if the taxpayer is seeking a credit based on requirements pursuant to Paragraph (2) of Subsection F of this section:

(a) the amount of capital investment in the qualifying period for which the new revenue corporate income tax credit is being claimed; and

(b) the county in which the capital investment was made; and

(3) certification by the taxpayer that, if not for the new revenue corporate income tax credit, the taxpayer would not have created new jobs or made a capital investment as required by Subsection F of this section.

M. If the economic development department determines that a taxpayer has met the requirements of this section and is eligible to receive a new revenue corporate income tax credit, it shall issue a certificate of eligibility to the taxpayer.

N. The new revenue corporate income tax credit shall not be claimed with respect to the same job or capital investment, as applicable, for which a high-wage jobs tax credit or rural job tax credit has been claimed, or for which a credit has been claimed pursuant to the Investment Credit Act or the Technology Jobs Tax Credit Act.

O. A taxpayer that, in a qualifying period, has received funds for a development training program pursuant to Section 21-19-7 NMSA 1978 or has entered into a project participation agreement pursuant to the Local Economic Development Act is not eligible for the new revenue corporate income tax credit for that qualifying period.

P. If an eligible employee who was hired to fill a new job is terminated by the taxpayer for a reason other than for good cause within five years of being hired to fill the new job and the taxpayer's eligibility for the new revenue corporate income tax credit was based on creating new jobs pursuant to Paragraph (1) of Subsection F of this section, the taxpayer shall remit to the department an amount of the new revenue corporate income tax credit taken by the taxpayer for each terminated employee. The amount of credit remitted for the terminated employee shall be calculated as a percentage that the total terminated employee's job bears to the total number of new jobs created during the qualifying period in which the terminated employee was hired, multiplied by the new revenue corporate income tax credit claimed for that qualifying period.

Q. If a taxpayer or a successor in business of the taxpayer ceases operations in New Mexico for at least one hundred eighty consecutive days within a two-year period after the taxpayer has claimed a new revenue corporate income tax credit at a facility with respect to which the taxpayer has claimed the credit, the department shall grant no further credit to the taxpayer with respect to that facility. In addition, any amount of credit not claimed against the taxpayer's income tax liability shall be extinguished, and within thirty days after the one hundred eightieth day of the cessation of operations, the taxpayer shall pay the amount of any income tax against which an approved credit was taken. For purposes of this section, a taxpayer shall not be deemed to have ceased operations during reasonable periods for maintenance or retooling or for the repair or replacement of facilities damaged or destroyed or during the continuance of labor disputes.

R. A taxpayer allowed a credit pursuant to this section shall report the amount of the credit to the department in a manner required by the department.

S. The department shall compile an annual report on the new revenue corporate income tax credit that shall include the number of taxpayers approved by the department to receive the credit, the aggregate amount of credits approved and any other information necessary to evaluate the effectiveness of the credit. Beginning in 2020 and every five years thereafter that the credit is in effect, the 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 credit and whether the credit is performing the purposes for which it was created.

T. The department shall promulgate rules to implement the provisions of this section. The economic development department shall promulgate rules establishing procedures to provide a certificate of eligibility for purposes of obtaining a new revenue corporate income tax credit pursuant to this section.

U. As used in this section:

(2) "capital investment" means capital investment in equipment, land, buildings or infrastructure, any of which is necessary to support new or expanding business activity;

(3) "eligible employee" means an individual who is employed in New Mexico and who is a resident of New Mexico; "eligible employee" does not include an individual who:

(7) "new revenue" means the difference between:

(a) the sum of the amount of a taxpayer's modified combined tax liability and tax liability pursuant to the Income Tax Act, minus the amount of any income tax credit or deduction other than the new revenue corporate income tax credit, in a taxpayer's taxable year; and

(b) the sum of the amount of a taxpayer's modified combined tax liability and tax liability pursuant to the Income Tax Act, minus the amount of any income tax credit or deduction other than the new revenue corporate income tax credit, in the taxable year immediately prior to the taxpayer's taxable year;

SECTION 3. Section 5-15-15 NMSA 1978 (being Laws 2006, Chapter 75, Section 15, as amended) is amended to read:

"5-15-15. TAX INCREMENT FINANCING--GROSS RECEIPTS TAX INCREMENT.--

A. Notwithstanding any law to the contrary, but in accordance with the provisions of the Tax Increment for Development Act, a tax increment development plan, as originally approved or as later modified, may contain a provision that a portion of certain gross receipts tax increments collected within the tax increment development area after the effective date of approval of the tax increment development plan may be dedicated for the purpose of securing gross receipts tax increment bonds pursuant to the Tax Increment for Development Act.

B. As to a district formed by a municipality, a portion of any of the following gross receipts tax increments may be paid by the state directly into a special fund of the district to pay the principal of, the interest on and any premium due in connection with the bonds of, loans or advances to, or any indebtedness incurred by, whether funded, refunded, assumed or otherwise, the authority for financing or refinancing, in whole or in part, a tax increment development project within the tax increment development area:

(1) municipal gross receipts tax authorized pursuant to the Municipal Local Option Gross Receipts Taxes Act;

(2) municipal environmental services gross receipts tax authorized pursuant to the Municipal Local Option Gross Receipts Taxes Act;

(3) municipal infrastructure gross receipts tax authorized pursuant to the Municipal Local Option Gross Receipts Taxes Act;

(4) municipal capital outlay gross receipts tax authorized pursuant to the Municipal Local Option Gross Receipts Taxes Act;

[(5) municipal regional transit gross receipts tax authorized pursuant to the Municipal Local Option Gross Receipts Taxes Act;

(6)] (5) an amount distributed to municipalities pursuant to Sections 7-1-6.4 and 7-1-6.46 NMSA 1978; and

[(7)] (6) the state gross receipts tax.

C. As to a district formed by a county, all or a portion of any of the following gross receipts tax increments may be paid by the state directly into a special fund of the district to pay the principal of, the interest on and any premium due in connection with the bonds of, loans or advances to or any indebtedness incurred by, whether funded, refunded, assumed or otherwise, the district for financing or refinancing, in whole or in part, a tax increment development project within the tax increment development area:

(1) county gross receipts tax authorized pursuant to the County Local Option Gross Receipts Taxes Act;

(2) county environmental services gross receipts tax authorized pursuant to the County Local Option Gross Receipts Taxes Act;

(3) county infrastructure gross receipts tax authorized pursuant to the County Local Option Gross Receipts Taxes Act;

(4) county capital outlay gross receipts tax authorized pursuant to the County Local Option Gross Receipts Taxes Act;

(5) county regional transit gross receipts tax authorized pursuant to the County Local Option Gross Receipts Taxes Act;

(6) the amount distributed to counties pursuant to Section 7-1-6.47 NMSA 1978; and

(7) the state gross receipts tax.

D. The gross receipts tax increment generated by the imposition of municipal or county local option gross receipts taxes specified by statute for particular purposes may nonetheless be dedicated for the purposes of the Tax Increment for Development Act if intent to do so is set forth in the tax increment development plan approved by the governing body, if the purpose for which the increment is intended to be used is consistent with the purposes set forth in the statute authorizing the municipal or county local option gross receipts tax.

E. An imposition of a gross receipts tax increment attributable to the imposition of a gross receipts tax by a taxing entity may be dedicated for the purpose of securing gross receipts tax increment bonds with the agreement of the taxing entity, evidenced by a resolution adopted by a majority vote of that taxing entity. A taxing entity shall not agree to dedicate for the purposes of securing gross receipts tax increment bonds more than seventy-five percent of its gross receipts tax increment attributable to the imposition of gross receipts taxes by the taxing entity. A resolution of the taxing entity to dedicate a gross receipts tax increment or to increase the dedication of a gross receipts tax increment shall become effective only on January 1 or July 1 of the calendar year.

F. An imposition of a gross receipts tax increment attributable to the imposition of the state gross receipts tax within a district less the distributions made pursuant to Section 7-1-6.4 NMSA 1978 may be dedicated for the purpose of securing gross receipts tax increment bonds with the agreement of the state board of finance, evidenced by a resolution adopted by a majority vote of the state board of finance. The state board of finance shall not agree to dedicate more than seventy-five percent for a district formed prior to July 1, 2014 or more than thirty percent for a district formed on or after July 1, 2014 of the gross receipts tax increment attributable to the imposition of the state gross receipts tax within the district. The resolution of the state board of finance shall become effective only on January 1 or July 1 of the calendar year and shall find that:

(1) the state board of finance has reviewed the request for the use of the state gross receipts tax;

(2) based upon review by the state board of finance of the applicable tax increment development plan, the dedication by the state board of finance of a portion of the gross receipts tax increment attributable to the imposition of the state gross receipts tax within the district for use in meeting the required goals of the tax increment plan is reasonable and in the best interest of the state; and

(3) the use of the state gross receipts tax is likely to stimulate the creation of jobs, economic opportunities and general revenue for the state through the addition of new businesses to the state and the expansion of existing businesses within the state.

G. The governing body of the jurisdiction in which a tax increment development district has been established shall timely notify the assessor of the county in which the district has been established, the taxation and revenue department and the local government division of the department of finance and administration when:

(1) a tax increment development plan has been approved that contains a provision for the allocation of a gross receipts tax increment;

(2) any outstanding bonds of the district have been paid off; and

(3) the purposes of the district have otherwise been achieved.

H. A law that authorizes the dedication of a gross receipts tax increment or that affects the dedication of a gross receipts tax increment, or a law supplemental thereto or otherwise appertaining thereto, shall not be repealed or amended or otherwise directly or indirectly modified in such a manner as to impair adversely any outstanding gross receipts tax increment bonds that may be secured by a pledge of such gross receipts tax increment unless the outstanding bonds have been discharged in full or provision has been fully made therefor."

SECTION 4. Section 7-12-7 NMSA 1978 (being Laws 1971, Chapter 77, Section 7, as amended) is amended to read:

"7-12-7. SALE OF STAMPS--PRICES.--

A. Only the department shall sell stamps. Stamps may be sold by the department only to a distributor.

B. Stamps shall display a serial number. Stamps bearing the same serial number shall not be sold to more than one distributor. The department shall keep records of the serial numbers of the stamps provided to each distributor.

C. A stamp shall be affixed to a package of cigarettes in such a manner as to clearly display the serial number at the point of sale.

D. Tax stamps shall be sold at their face value [with the following discounts:

(1) fifty-five hundredths percent less than the face value of the first thirty thousand dollars ($30,000) of stamps purchased in one calendar month;

(2) forty-four hundredths percent less than the face value of the second thirty thousand dollars ($30,000) of stamps purchased in one calendar month; and

(3) twenty-seven hundredths percent less than the face value of stamps purchased in excess of sixty thousand dollars ($60,000) in one calendar month].

E. Tax-credit stamps shall be provided only to distributors and shall be provided free of charge; provided that the distributor is in full compliance with the reporting requirements of the Cigarette Tax Act and rules adopted pursuant to that act.

[F. If the face value of tax stamps sold in a single sale is less than one thousand dollars ($1,000), the discount provided for in this section shall not be allowed.

G.] F. Payment for tax stamps shall be made on or before the twenty-fifth day of the month following the month in which the sale of stamps by the department is made.

[H.] G. Tax-exempt stamps shall be provided only to distributors and shall be free of charge; provided that the distributor is in full compliance with the reporting requirements of the Cigarette Tax Act and rules adopted pursuant to that act."

SECTION 5. Section 7-14-3 NMSA 1978 (being Laws 1988, Chapter 73, Section 13, as amended) is amended to read:

"7-14-3. IMPOSITION OF MOTOR VEHICLE EXCISE TAX.--

A. An excise tax, subject to the credit provided by Section 7-14-7.1 NMSA 1978, is imposed upon the sale in this state of every vehicle, except as otherwise provided in Section 7-14-7.1 NMSA 1978 and [manufactured homes] Subsection B of this section, required under the Motor Vehicle Code to be registered in this state. To prevent evasion of the excise tax imposed by the Motor Vehicle Excise Tax Act and the duty to collect it, it is presumed that the issuance of every original and subsequent certificate of title for vehicles of a type required to be registered under the provisions of the Motor Vehicle Code constitutes a sale for tax purposes, unless specifically exempted by the Motor Vehicle Excise Tax Act or unless there is shown proof satisfactory to the department that the vehicle for which the certificate of title is sought came into the possession of the applicant as a voluntary transfer without consideration or as a transfer by operation of law. The excise tax imposed by this section shall be known as the "motor vehicle excise tax".

B. The motor vehicle excise tax shall not be imposed on:

(1) a manufactured home;

(2) an all-terrain vehicle subject to registration pursuant to the Off-Highway Motor Vehicle Act unless the vehicle will be used primarily for work-related activities; and

(3) a recreational vehicle subject to registration pursuant to the Motor Vehicle Code unless the vehicle will be used primarily for work-related activities."

SECTION 6. REPEAL.--Sections 7-9-56.2 and 7-9-107 NMSA 1978 (being Laws 1998, Chapter 92, Section 2 and Laws 2007, Chapter 172, Section 9, as amended) are repealed.

SECTION 7. APPLICABILITY.--The provisions of Sections 1 and 2 of this act apply to taxable years beginning on or after January 1, 2015.

SECTION 8. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2014.

- 37 -