SENATE BILL 502

52nd legislature - STATE OF NEW MEXICO - first session, 2015

INTRODUCED BY

George K. Munoz

AN ACT

RELATING TO TAXATION; PROVIDING A DEDUCTION FROM THE GROSS RECEIPTS TAX FOR CERTAIN RECEIPTS DERIVED FROM THE SALE OF GOODS AND SERVICES TO THE UNITED STATES DEPARTMENT OF DEFENSE RELATED TO DIRECTED ENERGY OR SATELLITES; REQUIRING REPORTS AND REVIEW.

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

     SECTION 1. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

     "[NEW MATERIAL] DEDUCTION--GROSS RECEIPTS TAX--GOODS AND SERVICES FOR THE DEPARTMENT OF DEFENSE RELATED TO DIRECTED ENERGY AND SATELLITES--TEN-YEAR PERIOD--REPORTING.--

          A. Receipts in the period July 1, 2015 through June 30, 2025 from the sale by a qualified contractor of qualified research and development services and qualified directed energy and satellite-related inputs may be deducted from gross receipts when sold pursuant to a contract with the United States department of defense.

          B. The purpose of the deductions allowed in this section is to promote new and sophisticated technology, enhance the viability of directed energy and satellite projects, attract new projects and employers to New Mexico and increase high-technology employment opportunities in New Mexico.

          C. For the purposes of claiming and calculating the deductions provided by this section, a taxpayer shall report in a manner acceptable to the secretary the amount of gross receipts subject to the deductions pursuant to this section, the charges for services separately stated to the department of defense and the number of employees for whom charges were made during the reporting period.

          D. The department shall compile the information reported pursuant to Subsection C of this section for each fiscal year and shall report annually by October 15 to the interim revenue stabilization and tax policy committee and the legislative finance committee to facilitate evaluation by those committees of the benefit to the state of the deductions. In fiscal year 2022, but no later than December 1, 2022, the department together with the economic development department shall review the efficacy of the deduction and recommend to the interim revenue stabilization and tax policy committee and the legislative finance committee whether or not the deductions should continue.

          E. As used in this section:

                (1) "directed energy" means a system, including related services, that enables the use of the frequency spectrum, including radio waves, light and x-rays;

                (2) "inputs" means systems, subsystems, components, prototypes and demonstrators or products and services involving optics, photonics, electronics, advanced materials, nanoelectromechanical and microelectromechanical systems, fabrication materials, test evaluation and computer control systems related to directed energy or satellites;

                (3) "qualified contractor" means a person other than an organization designated as a national laboratory by act of congress or any operator of national laboratory facilities in New Mexico; provided that the operator may be a qualified contractor with respect to the operator's receipts not connected with operating the national laboratory;

                (4) "qualified directed energy and satellite-related inputs" means inputs supplied to the department of defense pursuant to a contract with that department entered into on or after July 1, 2015;

                (5) "qualified research and development services" means research and development services related to directed energy or satellites provided to the department of defense pursuant to a contract with that department entered into on or after July 1, 2015; and

                (6) "satellite" means composite systems assembled and packaged for use in space, including launch vehicles and related products and services."

     SECTION 2. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2015.

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