HOUSE BILL 299

52nd legislature - STATE OF NEW MEXICO - second session, 2016

INTRODUCED BY

Jim R. Trujillo

AN ACT

RELATING TO TAXATION; PROVIDING A DEDUCTION FROM GROSS RECEIPTS FOR STATE-PAID CHILD DAYCARE AND PRE-KINDERGARTEN SERVICES.

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--CHILD DAYCARE SERVICES--PRE-KINDERGARTEN SERVICES--RECEIPT FROM STATE.--

          A. Beginning July 1, 2016 and until July 1, 2024, receipts of fees paid by the state for the provision of the following services may be deducted from gross receipts:

                (1) child daycare services; and

                (2) pre-kindergarten services provided under the Pre-Kindergarten Act.

          B. The purposes of the deduction authorized by this section are to:

                (1) give private, for-profit child daycare and pre-kindergarten service providers a gross receipts tax benefit equivalent to that of not-for-profit child daycare and pre-kindergarten service providers; and

                (2) encourage growth in the provision of child daycare and pre-kindergarten services.

          C. A taxpayer allowed the deduction authorized by this section shall report the amount of the deduction separately in a manner required by the department.

          D. Beginning in 2017, the department shall compile an annual report on the deduction provided by this section that includes the number of taxpayers that claimed the deduction, the aggregate amount of deductions claimed and any other information necessary to evaluate the effectiveness of the deduction. The department shall present the report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the effectiveness and cost of the deduction and whether the deduction is performing the purpose for which it was created."

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