SENATE BILL 101
52nd legislature - STATE OF NEW MEXICO - first session, 2015
INTRODUCED BY
Steven P. Neville
AN ACT
RELATING TO TAXATION; DECREASING THE GROSS RECEIPTS TAX; LIMITING THE AMOUNT OF HOLD HARMLESS GROSS RECEIPTS TAX THAT A MUNICIPALITY OR COUNTY MAY IMPOSE; REPEALING THE HOLD HARMLESS DISTRIBUTIONS TO MUNICIPALITIES AND COUNTIES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 7-9-4 NMSA 1978 (being Laws 1966, Chapter 47, Section 4, as amended) is amended to read:
"7-9-4. IMPOSITION AND RATE OF TAX--DENOMINATION AS "GROSS RECEIPTS TAX".--
A. For the privilege of engaging in business, an excise tax equal to [five and one-eighth] four and seven-eighths percent of gross receipts is imposed on any person engaging in business in New Mexico.
B. The tax imposed by this section shall be referred to as the "gross receipts tax"."
SECTION 2. Section 7-19D-18 NMSA 1978 (being Laws 2013, Chapter 160, Section 11) is amended to read:
"7-19D-18. MUNICIPAL HOLD HARMLESS GROSS RECEIPTS TAX.--
A. The majority of the members of the governing body of any municipality may impose by ordinance an excise tax not to exceed a rate of [three-eighths] one-half percent of the gross receipts of any person engaging in business in the municipality for the privilege of engaging in business in the municipality or the hold harmless rate, whichever is less. A tax imposed pursuant to this section shall be imposed by the enactment of one or more ordinances, each imposing any number of gross receipts tax rate increments, but the total gross receipts tax rate imposed by all ordinances pursuant to this section shall not exceed an aggregate rate of [three-eighths] one-half percent of the gross receipts of a person engaging in business. Municipalities may impose increments of [one-eighth of one] one-sixteenth percent.
B. The tax imposed pursuant to Subsection A of this section may be referred to as the "municipal hold harmless gross receipts tax". The imposition of a municipal hold harmless gross receipts tax is not subject to referendum.
C. The governing body of a municipality may, at the time of enacting an ordinance imposing the tax authorized in Subsection A of this section, dedicate the revenue for a specific purpose or area of municipal government services, including but not limited to police protection, fire protection, public transportation or street repair and maintenance. If the governing body proposes to dedicate such revenue, the ordinance and any revenue so dedicated shall be used by the municipality for that purpose unless a subsequent ordinance is adopted to change the purpose to which the revenue is dedicated or to place the revenue in the general fund of the municipality.
D. Any law that imposes or authorizes the imposition of a municipal hold harmless gross receipts tax or that affects the municipal hold harmless gross receipts tax, or any 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 revenue bonds that may be secured by a pledge of such municipal hold harmless gross receipts tax unless such outstanding revenue bonds have been discharged in full or provision has been fully made therefor.
E. As used in this section, "hold harmless rate" means the rate, rounded to the nearest one-sixteenth percent increment, of a municipal hold harmless gross receipts tax that, if imposed, would result in an amount of revenue equal to:
(1) for a municipality that has a population of less than ten thousand according to the most recent federal decennial census, the monthly average of the total deductions claimed pursuant to Sections 7-9-92 and 7-9-93 NMSA 1978 for the previous calendar year by taxpayers from business locations attributable to the municipality multiplied by the sum of the combined rate of all municipal local option gross receipts taxes in effect in the municipality for the month plus one and two hundred twenty-five thousandths percent; and
(2) for a municipality that has a population of ten thousand or more according to the most recent federal decennial census, the monthly average of the total deductions claimed pursuant to Sections 7-9-92 and 7-9-93 NMSA 1978 for the previous calendar year by taxpayers from business locations attributable to the municipality multiplied by the sum of the combined rate of all municipal local option gross receipts taxes in effect in the municipality on January 1, 2007 plus one and two hundred twenty-five thousandths percent."
SECTION 3. Section 7-20E-28 NMSA 1978 (being Laws 2013, Chapter 160, Section 12) is amended to read:
"7-20E-28. COUNTY HOLD HARMLESS GROSS RECEIPTS TAX.--
A. The majority of the members of the governing body of any county may impose by ordinance an excise tax not to exceed a rate of [three-eighths] one-half percent of the gross receipts of any person engaging in business in the county for the privilege of engaging in business in the county or the hold harmless rate, whichever is less. A tax imposed pursuant to this section shall be imposed by the enactment of one or more ordinances, each imposing any number of gross receipts tax rate increments, but the total gross receipts tax rate imposed by all ordinances pursuant to this section shall not exceed an aggregate rate of [three-eighths] one-half percent of the gross receipts of a person engaging in business. Counties may impose increments of [one-eighth of one] one-sixteenth percent.
B. The tax imposed pursuant to Subsection A of this section may be referred to as the "county hold harmless gross receipts tax". The imposition of a county hold harmless gross receipts tax is not subject to referendum.
C. The governing body of a county may, at the time of enacting an ordinance imposing the tax authorized in Subsection A of this section, dedicate the revenue for a specific purpose or area of county government services, including but not limited to police protection, fire protection, public transportation or street repair and maintenance. If the governing body proposes to dedicate such revenue, the ordinance and any revenue so dedicated shall be used by the county for that purpose unless a subsequent ordinance is adopted to change the purpose to which the revenue is dedicated or to place the revenue in the general fund of the county.
D. Any law that imposes or authorizes the imposition of a county hold harmless gross receipts tax or that affects the county hold harmless gross receipts tax, or any 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 revenue bonds that may be secured by a pledge of such county hold harmless gross receipts tax unless such outstanding revenue bonds have been discharged in full or provision has been fully made therefor.
E. As used in this section, "hold harmless rate" means the rate, rounded to the nearest one-sixteenth percent increment, of a county hold harmless gross receipts tax that, if imposed, would result in an amount of revenue equal to:
(1) for counties that have a population of less than forty-eight thousand according to the most recent federal decennial census, the sum of:
(a) the monthly average of the total deductions claimed pursuant to Sections 7-9-92 and 7-9-93 NMSA 1978 for the previous calendar year by taxpayers from business locations within a municipality in the county multiplied by the combined rate of all county local option gross receipts taxes in effect for the month that are imposed throughout the county; and
(b) the monthly average of the total deductions claimed pursuant to Sections 7-9-92 and 7-9-93 NMSA 1978 for the previous calendar year by taxpayers from business locations in the county but not within a municipality multiplied by the combined rate of all county local option gross receipts taxes in effect for the month that are imposed in the county area not within a municipality; and
(2) for counties that have a population of forty-eight thousand or more according to the most recent federal decennial census, the sum of:
(a) the monthly average of the total deductions claimed pursuant to Sections 7-9-92 and 7-9-93 NMSA 1978 for the previous calendar year by taxpayers from business locations within a municipality in the county multiplied by the combined rate of all county local option gross receipts taxes in effect on January 1, 2007 that are imposed throughout the county; and
(b) the monthly average of the total deductions claimed pursuant to Sections 7-9-92 and 7-9-93 NMSA 1978 for the previous calendar year by taxpayers from business locations in the county but not within a municipality multiplied by the combined rate of all county local option gross receipts taxes in effect on January 1, 2007 that are imposed in the county area not within a municipality."
SECTION 4. TEMPORARY PROVISION--MUNICIPAL OR COUNTY HOLD HARMLESS GROSS RECEIPTS TAX IMPOSED PRIOR TO THE EFFECTIVE DATE OF THIS ACT.--
A. Except as provided in Subsection B of this section, an ordinance imposing a municipal hold harmless gross receipts tax or county hold harmless gross receipts tax prior to the effective date of this act shall conform to the provisions of this act. An ordinance that does not conform to the provisions of this act on or after July 1, 2015 is not valid with respect to transactions occurring on or after July 1, 2015.
B. If, prior to the effective date of this act, a municipality or county has issued a revenue bond that is secured by a pledge of a municipal hold harmless gross receipts tax or county hold harmless gross receipts tax, the ordinance imposing the municipal hold harmless gross receipts tax or county hold harmless gross receipts tax shall remain in effect until the ordinance expires or the revenue bond has been discharged in full or provision has been fully made therefor, whichever occurs first.
SECTION 5. REPEAL.--Sections 7-1-6.46 and 7-1-6.47 NMSA 1978 (being Laws 2004, Chapter 116, Sections 1 and 2, as amended) are repealed.
SECTION 6. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2015.
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