0001| HOUSE BILL 1247 | 0002| 43rd legislature - STATE OF NEW MEXICO - first session, 1997 | 0003| INTRODUCED BY | 0004| LEO C. WATCHMAN, JR. | 0005| | 0006| | 0007| | 0008| | 0009| | 0010| AN ACT | 0011| RELATING TO TAXATION; PROVIDING A CREDIT AGAINST CORPORATE | 0012| INCOME TAX; ENACTING A SECTION OF THE NMSA 1978. | 0013| | 0014| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0015| Section 1. INTERGOVERNMENTAL BUSINESS TAX CREDIT.-- | 0016| A. With respect to the net income of a taxpayer | 0017| engaged in the transaction of business occurring after July 1, | 0018| 1997 from a new business on tribal land, the person who is | 0019| liable for the payment of the corporate income tax may claim a | 0020| credit against the corporate income tax if a tax or taxes are | 0021| imposed by an Indian nation, tribe or pueblo. | 0022| B. The credit provided by this section may be | 0023| referred to as the "intergovernmental business tax credit". | 0024| C. As used in this section: | 0025| (1) "new business" means a business that | 0001| commences operation on or after July 1, 1997; | 0002| (2) "person" means an individual, estate, | 0003| trust, receiver, business trust, corporation, cooperative, | 0004| joint venture, association, limited liability company or other | 0005| group or combination acting as a unit; and | 0006| (3) "tribal land" means all land that on March | 0007| 1, 1997 was: | 0008| (a) within the exterior boundaries of an | 0009| Indian reservation or pueblo grant; or | 0010| (b) lands held in trust by the United | 0011| States for an Indian nation, tribe or pueblo. | 0012| D. The intergovernmental business tax credit shall | 0013| be determined separately for each reporting period and shall be | 0014| equal to fifty percent of the lesser of: | 0015| (1) the aggregate amount of tax imposed by an | 0016| Indian nation, tribe or pueblo in effect on March 1, 1997; or | 0017| (2) the amount of corporate income tax due for | 0018| the reporting period. | 0019| E. The taxation and revenue department shall | 0020| administer and interpret the provisions of this section in | 0021| accordance with the provisions of the Tax Administration Act. | 0022| F. The burden of showing entitlement to a credit | 0023| authorized by this section is on the taxpayer claiming it, and | 0024| the taxpayer shall furnish to the appropriate tax collecting | 0025| agency, in the manner determined by the taxation and revenue | 0001| department, proof of payment of tax on which the credit is | 0002| based to an Indian nation, tribe or pueblo. | 0003| Section 2. EFFECTIVE DATE.--The effective date of the | 0004| provisions of this act is July 1, 1997. | 0005| - 3 - State of New Mexico | 0006| House of Representatives | 0007| | 0008| FORTY-THIRD LEGISLATURE | 0009| FIRST SESSION, 1997 | 0010| | 0011| | 0012| March 14, 1997 | 0013| | 0014| | 0015| Mr. Speaker: | 0016| | 0017| Your TAXATION AND REVENUE COMMITTEE, to whom has | 0018| been referred | 0019| | 0020| HOUSE BILL 1247 | 0021| | 0022| has had it under consideration and reports same with | 0023| recommendation that it DO NOT PASS, but that | 0024| | 0025| HOUSE TAXATION AND REVENUE COMMITTEE SUBSTITUTE | 0001| FOR HOUSE BILL 1247 | 0002| | 0003| DO PASS, amended as follows: | 0004| | 0005| 1. On page 1, line 20, strike "tribal" and insert in | 0006| lieu thereof "Indian". | 0007| | 0008| 2. On page 1, line 22, after "credit" insert "as provided | 0009| in Subsection D of this section". | 0010| | 0011| 3. On page 2, line 6, strike "business" and insert in lieu | 0012| thereof "the new business's". | 0013| | 0014| 4. On page 2, line 11, before "that" insert "in New | 0015| Mexico". | 0016| | 0017| 5. On page 2, line 16, after "an" insert "individual". | 0018| | 0019| 6. On page 2, line 16, strike "and". | 0020| | 0021| 7. On page 2, strike lines 17 and 18 in their entirety and | 0022| insert the following: | 0023| | 0024| "(3) "new business" means a manufacturer or | 0025| processor that occupies a new business facility or a grower that | 0001| commences operation in New Mexico on or after July 1, 1997; and | 0002| | 0003| (4) "new business facility" means a facility on | 0004| Indian land that satisfies the following requirements: | 0005| | 0006| (a) the facility is employed by the | 0007| taxpayer in the operation of a revenue-producing enterprise. The | 0008| facility shall not be considered a "new business facility" in the | 0009| hands of the taxpayer if the taxpayer's only activity with | 0010| respect to the facility is to lease it to another person; | 0011| | 0012| | 0013| (b) the facility is acquired by or leased | 0014| to the taxpayer on or after January 1, 1997. The facility shall | 0015| be deemed to have been acquired by or leased to the taxpayer on | 0016| or after the specified date if the transfer of title to the | 0017| taxpayer, the transfer of possession pursuant to a binding | 0018| contract to transfer title to the taxpayer or the commencement of | 0019| the term of the lease to the taxpayer occurs on or after that | 0020| date or if the facility is constructed, erected or installed by | 0021| or on behalf of the taxpayer, the construction, erection or | 0022| installation is completed on or after that date; | 0023| | 0024| (c) the facility is a newly acquired | 0025| facility in which the taxpayer is not continuing the operation of | 0001| the same or a substantially identical revenue-producing | 0002| enterprise that previously was in operation on the Indian land of | 0003| the Indian nation, tribe or pueblo where the facility is now | 0004| located; a facility is a "newly acquired facility" if the | 0005| facility was acquired or leased by the taxpayer from another | 0006| person even if the facility was employed in a revenue-producing | 0007| enterprise on the Indian land of the same Indian nation, tribe or | 0008| pueblo immediately prior to the transfer of the title to the | 0009| facility to the taxpayer or immediately prior to the commencement | 0010| of the term of the lease of the facility to the taxpayer by | 0011| another person provided that the revenue-producing enterprise of | 0012| the previous occupant was not the same or substantially identical | 0013| to the taxpayer's revenue-producing enterprise; and | 0014| | 0015| | 0016| (d) the facility is not a replacement | 0017| business facility for a business facility that existed on the | 0018| Indian land of the Indian nation, tribe or pueblo where the | 0019| business is now located.". | 0020| | 0021| 8. On page 2, line 25, strike "business" and insert in lieu | 0022| thereof "the new business's activity". | 0023| | 0024| 9. On page 3, strike lines 10 through 16 in their entirety | 0025| and insert in lieu thereof: | 0001| | 0002| "G. For a taxpayer qualifying for the credit provided | 0003| by this section that conducts business in New Mexico both on and | 0004| off Indian land, the taxpayer's corporate income tax liability | 0005| derived from the new business activity conducted on Indian land | 0006| shall be equal to the sum of the products of one-half of the | 0007| taxpayer's New Mexico corporate income tax liability before | 0008| application of the credit provided by this section multiplied by | 0009| the payroll factor and one-half of the taxpayer's New Mexico | 0010| corporate income tax liability before application of the credit | 0011| provided by this section multiplied by the property factor. The | 0012| factors shall be determined as follows:". | 0013| | 0014| 10. On page 3, line 19, after "his" insert "new". | 0015| | 0016| 11. On page 3, line 25, after "used" insert "in the new | 0017| business"., | 0018| | 0019| and thence referred to the APPROPRIATIONS AND FINANCE | 0020| COMMITTEE. | 0021| | 0022| Respectfully submitted, | 0023| | 0024| | 0025| | 0001| | 0002| | 0003| Jerry W. Sandel, Chairman | 0004| | 0005| | 0006| Adopted Not Adopted | 0007| | 0008| (Chief Clerk) (Chief Clerk) | 0009| | 0010| Date | 0011| | 0012| The roll call vote was 11 For 0 Against | 0013| Yes: 11 | 0014| Excused: Sandoval, Stell | 0015| Absent: None | 0016| | 0017| | 0018| .118921.3 | 0019| G:\BILLTEXT\BILLW_97\H1247 HOUSE TAXATION AND REVENUE COMMITTEE SUBSTITUTE FOR | 0020| HOUSE BILL 1247 | 0021| 43rd legislature - STATE OF NEW MEXICO - first session, 1997 | 0022| | 0023| | 0024| | 0025| | 0001| | 0002| | 0003| | 0004| AN ACT | 0005| RELATING TO TAXATION; PROVIDING A CREDIT AGAINST CORPORATE | 0006| INCOME TAX; ENACTING A SECTION OF THE NMSA 1978. | 0007| | 0008| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0009| Section 1. A new section of the Corporate Income and | 0010| Franchise Tax Act is enacted to read: | 0011| "[NEW MATERIAL] INTERGOVERNMENTAL BUSINESS TAX CREDIT.-- | 0012| A. With respect to the net income of a taxpayer | 0013| engaged in the transaction of business occurring after July 1, | 0014| 1997 from a new business on tribal land, the person who is | 0015| liable for the payment of the corporate income tax may claim a | 0016| credit against the corporate income tax for the aggregate | 0017| amount of tax paid to an Indian nation, tribe or pueblo located | 0018| in whole or in part within New Mexico. | 0019| B. The credit provided by this section may be | 0020| referred to as the "intergovernmental business tax credit". | 0021| C. As used in this section: | 0022| (1) "aggregate amount of tax" means the total | 0023| of all taxes imposed by an Indian nation, tribe or pueblo | 0024| located in whole or in part in New Mexico on income derived | 0025| from business activity on Indian land, except a tax shall not | 0001| be included in that total if the tax is eligible for a credit | 0002| pursuant to the provisions of Section 7-29C-1 NMSA 1978 or any | 0003| other intergovernmental tax credit that provides a similar tax | 0004| credit; | 0005| (2) "Indian land" means all land that on March | 0006| 1, 1997 was: | 0007| (a) within the exterior boundaries of an | 0008| Indian reservation or pueblo grant; or | 0009| (b) lands held in trust by the United | 0010| States for an Indian nation, tribe or pueblo; and | 0011| (3) "new business" means a business that | 0012| commences operation on or after July 1, 1997. | 0013| D. The intergovernmental business tax credit shall | 0014| be determined separately for each reporting period and shall be | 0015| equal to fifty percent of the lesser of: | 0016| (1) the aggregate amount of tax paid by a | 0017| taxpayer; or | 0018| (2) the amount of the taxpayer's corporate | 0019| income tax due for the reporting period from business conducted on | 0020| Indian land. | 0021| E. The department shall administer and interpret the | 0022| provisions of this section in accordance with the provisions of | 0023| the Tax Administration Act. | 0024| F. The burden of showing entitlement to a credit | 0025| authorized by this section is on the taxpayer claiming it, and the | 0001| taxpayer shall furnish to the appropriate tax collecting agency, | 0002| in the manner determined by the department, proof of payment of | 0003| the aggregate amount of tax on which the credit is based. | 0004| G. A taxpayer that conducts business both on and off | 0005| Indian land in New Mexico shall have a corporate income tax | 0006| liability from his income on Indian land equal to the sum of the | 0007| products of one-half of the taxpayer's New Mexico income | 0008| multiplied by the payroll factor and one-half of the taxpayer's | 0009| New Mexico income multiplied by the property factor. The factors | 0010| shall be determined as follows: | 0011| (1) the payroll factor is a fraction, the | 0012| numerator of which is the amount of compensation paid to employees | 0013| employed during the tax period by the taxpayer in his business on | 0014| Indian land, and the denominator of which is the total amount of | 0015| compensation paid to employees employed during the tax period by | 0016| the taxpayer in all of New Mexico, including Indian land; and | 0017| (2) the property factor is a fraction, the | 0018| numerator of which is the average value of the taxpayer's real and | 0019| tangible personal property owned or rented and used on Indian land | 0020| in New Mexico during the tax period and the denominator of which | 0021| is the average value of all the taxpayer's real and tangible | 0022| property owned or rented and used in New Mexico, including on | 0023| Indian land, during the tax period." | 0024| Section 2. APPLICABILITY.--The provisions of this act apply | 0025| to taxable years beginning on or after January 1, 1997. | 0001| Section 3. EFFECTIVE DATE.--The effective date of the | 0002| provisions of this act is July 1, 1997. | 0003|  State of New Mexico | 0004| House of Representatives | 0005| | 0006| FORTY-THIRD LEGISLATURE | 0007| FIRST SESSION, 1997 | 0008| | 0009| | 0010| March 18, 1997 | 0011| | 0012| | 0013| Mr. Speaker: | 0014| | 0015| Your APPROPRIATIONS AND FINANCE COMMITTEE, to whom | 0016| has been referred | 0017| | 0018| HOUSE TAXATION AND REVENUE COMMITTEE SUBSTITUTE FOR | 0019| HOUSE BILL 1247, as amended | 0020| | 0021| has had it under consideration and reports same with | 0022| recommendation that it DO PASS. | 0023| | 0024| Respectfully submitted, | 0025| | 0001| | 0002| | 0003| | 0004| Max Coll, Chairman | 0005| | 0006| | 0007| Adopted Not Adopted | 0008| | 0009| (Chief Clerk) (Chief Clerk) | 0010| | 0011| Date | 0012| | 0013| The roll call vote was 15 For 0 Against | 0014| Yes: 15 | 0015| Excused: Heaton, Salazar | 0016| Absent: None | 0017| | 0018| | 0019| G:\BILLTEXT\BILLW_97\H1247 | 0020| | 0021| FORTY-THIRD LEGISLATURE | 0022| FIRST SESSION, 1997 | 0023| | 0024| | 0025| March 20, 1997 | 0001| | 0002| Mr. President: | 0003| | 0004| Your WAYS AND MEANS COMMITTEE, to whom has been referred | 0005| | 0006| HOUSE TAXATION AND REVENUE COMMITTEE SUBSTITUTE FOR | 0007| HOUSE BILL 1247, as amended | 0008| | 0009| has had it under consideration and reports same with recommendation | 0010| that it DO PASS. | 0011| | 0012| Respectfully submitted, | 0013| | 0014| | 0015| | 0016| __________________________________ | 0017| Carlos R. Cisneros, Chairman | 0018| | 0019| | 0020| | 0021| Adopted_______________________ Not Adopted_______________________ | 0022| (Chief Clerk) (Chief Clerk) | 0023| | 0024| | 0025| | 0001| Date ________________________ | 0002| | 0003| | 0004| The roll call vote was 5 For 4 Against | 0005| Yes: 5 | 0006| No: Duran, Kidd, Leavell, McSorley | 0007| Excused: None | 0008| Absent: None | 0009| | 0010| | 0011| H1247WM1 |