SENATE BILL 300
53rd legislature - STATE OF NEW MEXICO - first session, 2017
INTRODUCED BY
George K. Munoz
AN ACT
RELATING TO TAXATION; CREATING THE LIQUOR LICENSE TRANSFER INCOME TAX CREDIT AND LIQUOR LICENSE TRANSFER CORPORATE INCOME TAX CREDIT FOR TRANSFERRING A LIQUOR LICENSE FROM CERTAIN COUNTIES.
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] LIQUOR LICENSE TRANSFER INCOME TAX CREDIT.--
A. A taxpayer who is not a dependent of another individual, who purchased a liquor license for at least four hundred thousand dollars ($400,000) and who transfers the license, pursuant to Section 60-6B-4 NMSA 1978, to a location outside an eligible county may apply for, and the department may allow, a credit against the taxpayer's tax liability imposed pursuant to the Income Tax Act. The amount of the tax credit shall be in an amount equal to sixty percent of the price paid for the liquor license. The tax credit provided by this section may be referred to as the "liquor license transfer income tax credit".
B. The purpose of the liquor license transfer income tax credit is to reduce the number of liquor licenses in an eligible county.
C. A taxpayer may claim a tax credit provided by this section for the taxable year in which the taxpayer transfers the liquor license to a location outside an eligible county. To receive the tax credit, a taxpayer shall apply to the department on forms and in the manner prescribed by the department.
D. That portion of the tax credit that exceeds a taxpayer's tax liability in the taxable year in which the credit is claimed may be carried forward for a maximum of five consecutive taxable years.
E. Married individuals filing separate returns for a taxable year for which they could have filed a joint return may each claim only one-half of the tax credit that would have been claimed on a joint return.
F. A taxpayer may be allocated the right to claim the 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 a limited liability company shall not exceed the allowable credit pursuant to Subsection A of this section.
G. A taxpayer allowed a tax credit pursuant to this section shall report the amount of the credit to the department in a manner required by the department.
H. The department shall compile an annual report on the 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. Each year 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 tax credit and whether the tax credit is performing the purpose for which it was created.
I. As used in this section:
(1) "eligible county" means a class B county having a population of more than seventy thousand but less than eighty thousand, according to the most recent federal decennial census and having a net taxable value for rate-setting purposes for the 2016 or any subsequent property tax year of more than eight hundred million dollars ($800,000,000) but less than nine hundred million dollars ($900,000,000);
(2) "liquor license" means a license issued pursuant to the Liquor Control Act; and
(3) "price paid" means the total amount of money or the reasonable value of other consideration or both paid for a liquor license."
SECTION 2. A new section of the Corporate Income and Franchise Tax Act is enacted to read:
"[NEW MATERIAL] LIQUOR LICENSE TRANSFER CORPORATE INCOME TAX CREDIT.--
A. A taxpayer that files a New Mexico corporate income tax return that purchased a liquor license for at least four hundred thousand dollars ($400,000) and that transfers the license, pursuant to Section 60-6B-4 NMSA 1978, to a location outside an eligible county may apply for, and the department may allow, a credit against the taxpayer's tax liability imposed pursuant to the Corporate Income and Franchise Tax Act. The amount of the tax credit shall be in an amount equal to sixty percent of the price paid for the liquor license. The tax credit provided by this section may be referred to as the "liquor license transfer corporate income tax credit".
B. The purpose of the liquor license transfer corporate income tax credit is to reduce the number of liquor licenses in an eligible county.
C. A taxpayer may claim a tax credit provided by this section for the taxable year in which the taxpayer transfers the liquor license to a location outside an eligible county. To receive the tax credit, a taxpayer shall apply to the department on forms and in the manner prescribed by the department.
D. That portion of the tax credit that exceeds a taxpayer's tax liability in the taxable year in which the credit is claimed may be carried forward for a maximum of five consecutive taxable years.
E. A taxpayer allowed a tax credit pursuant to this section shall report the amount of the credit to the department in a manner required by the department.
F. The department shall compile an annual report on the 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. Each year 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 tax credit and whether the tax credit is performing the purpose for which it was created.
G. As used in this section:
(1) "eligible county" means a class B county having a population of more than seventy thousand but less than eighty thousand, according to the most recent federal decennial census and having a net taxable value for rate-setting purposes for the 2016 or any subsequent property tax year of more than eight hundred million dollars ($800,000,000) but less than nine hundred million dollars ($900,000,000);
(2) "liquor license" means a license issued pursuant to the Liquor Control Act; and
(3) "price paid" means the total amount of money or the reasonable value of other consideration or both paid for a liquor license."
SECTION 3. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2017.
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