SENATE BILL 247

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

INTRODUCED BY

Michael Padilla

AN ACT

RELATING TO TAXATION; CREATING GROSS RECEIPTS AND COMPENSATING TAX DEDUCTIONS FOR COMPONENTS AND CONSTRUCTION SERVICES FOR BROADBAND TELECOMMUNICATIONS NETWORK FACILITIES.

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 AND COMPENSATING TAX--COMPONENTS AND CONSTRUCTION SERVICES FOR BROADBAND TELECOMMUNICATIONS NETWORK FACILITIES.--

          A. Prior to July 1, 2026, the value of components for broadband telecommunications network facilities and for construction services to construct broadband telecommunications network facilities may be deducted in computing compensating tax due.

          B. Prior to July 1, 2026, receipts from the sale or lease of components for broadband telecommunications network facilities and from the sale of construction services to construct broadband telecommunications network facilities may be deducted from gross receipts.

          C. The purpose of the deductions provided by this section is to promote the deployment of broadband telecommunications services in New Mexico.

          D. A taxpayer allowed a deduction pursuant to this section shall report the amount of the deduction separately in a manner required by the department.

          E. The department shall compile an annual report on the deductions provided by this section that shall include 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 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 deduction and whether the deduction is performing the purpose for which it was created.

          F. As used in this section, "broadband

telecommunications network facilities" means the switching equipment, transmission facilities, fiber-optic and copper

cables and any other item directly related to a system capable

of transmission of internet protocol or other formatted data at

transmission speeds of a minimum of ten megabits per second of

download speed and one megabit per second of upload speed, all of which will be owned and used by a provider of internet access services."

     SECTION 2. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2016.

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