0001| SENATE PUBLIC AFFAIRS COMMITTEE SUBSTITUTE FOR | 0002| SENATE BILL 1296 | 0003| 43rd legislature - STATE OF NEW MEXICO - first session, 1997 | 0004| | 0005| | 0006| | 0007| | 0008| | 0009| | 0010| | 0011| AN ACT | 0012| RELATING TO THE PUBLIC PEACE, HEALTH, SAFETY AND WELFARE; | 0013| ENACTING SECTIONS OF THE INCOME TAX ACT AND THE CORPORATE | 0014| INCOME AND FRANCHISE TAX ACT TO PROVIDE TAX CREDITS FOR | 0015| EMPLOYMENT OF RECIPIENTS OF TEMPORARY ASSISTANCE FOR NEEDY | 0016| FAMILIES. | 0017| | 0018| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0019| Section 1. A new section of the Income Tax Act is enacted | 0020| to read: | 0021| "[NEW MATERIAL] WORK OPPORTUNITY TAX CREDIT.-- | 0022| A. To provide recipients of temporary assistance | 0023| for needy families with work and training opportunities, any | 0024| taxpayer who is the owner of a small business in New Mexico, | 0025| who files an individual New Mexico income tax return and who is | 0001| not a dependent of another individual, may claim a credit in an | 0002| amount determined in Subsection B of this section equal to a | 0003| percentage of wages paid to persons who are qualified | 0004| recipients and who are employed by the taxpayer during the | 0005| taxable year for which the return is filed. The tax credit may | 0006| be known as the "work opportunity tax credit". | 0007| B. A taxpayer who is the owner of a small business | 0008| in New Mexico may claim the credit provided in this section for | 0009| each taxable year in which the business employs one or more | 0010| qualified recipients. The maximum aggregate credit allowable | 0011| shall be the sum of: | 0012| (1) an amount equal to twenty-five percent of | 0013| the unsubsidized wages of qualified recipients who are paid a | 0014| gross hourly wage of less than six dollars fifty cents ($6.50) | 0015| not to exceed eight hundred twelve dollars ($812) per qualified | 0016| recipient; | 0017| (2) an amount equal to twenty-five percent of | 0018| the unsubsidized wages of qualified recipients who are paid a | 0019| gross hourly wage of at least six dollars fifty cents ($6.50) | 0020| but not more than a gross hourly wage of eight dollars ninety- | 0021| nine cents ($8.99) per hour, not to exceed one thousand six | 0022| hundred eighty-six dollars ($1,686) per qualified recipient; | 0023| and | 0024| (3) an amount equal to twenty-five percent of | 0025| the unsubsidized wages of qualified recipients who are paid a | 0001| gross hourly wage of nine dollars ($9.00) or more per hour, not | 0002| to exceed two thousand three hundred forty dollars ($2,340) per | 0003| qualified recipient. | 0004| C. A credit may be claimed for any number of qualified | 0005| recipients whose employment qualifies for a work opportunity tax | 0006| credit, but may be claimed only for the initial training period of | 0007| the qualified recipient's employment, not to exceed twenty-six | 0008| weeks. To claim the credit under this section, the taxpayer shall | 0009| submit with his claim: | 0010| (1) certification from the secretary of labor | 0011| that the employee is a qualified recipient; | 0012| (2) evidence satisfactory to the secretary of | 0013| taxation and revenue that the qualified recipient successfully | 0014| completed the specified training period, not to exceed twenty-six | 0015| weeks, for which the credit is being claimed and following that | 0016| period was employed permanently for at least thirty hours a week | 0017| by the business owned by the taxpayer; and | 0018| (3) evidence satisfactory to the secretary of | 0019| taxation and revenue that the qualified recipient was hired | 0020| because of the growth of the business or to replace an employee | 0021| who left voluntarily or whose employment was terminated for cause. | 0022| D. The credit provided under this section may only be | 0023| deducted from the taxpayer's New Mexico income tax liability for | 0024| the taxable year. Any portion of the maximum tax credit provided | 0025| by this section that remains unused at the end of the taxpayer's | 0001| taxable year may be carried forward for three consecutive taxable | 0002| years; provided, the total tax credits claimed under this section | 0003| shall not exceed the maximum allowable under Subsection B of this | 0004| section. | 0005| E. A husband and wife who file separate returns for a | 0006| taxable year in which they could have filed a joint return may | 0007| each claim only one-half of the credit that would have been | 0008| allowed on a joint return. | 0009| F. A taxpayer who otherwise qualifies and claims a | 0010| work opportunity tax credit for employment of qualified recipients | 0011| by a partnership, limited partnership, limited liability company, | 0012| S corporation or other business association of which the taxpayer | 0013| is a member may claim a credit only in proportion to his interest | 0014| in the partnership, limited partnership, limited liability | 0015| company, S corporation or association. The total credit claimed | 0016| by all members of the business shall not exceed the maximum tax | 0017| credit allowable under Subsection B of this section. | 0018| G. As used in this section: | 0019| (1) "qualified recipient" means a recipient of | 0020| temporary assistance for needy families who is eighteen years of | 0021| age or older and who has been referred for employment through the | 0022| labor department; | 0023| (2) "small business in New Mexico" means any | 0024| single business location of a partnership, limited partnership, | 0025| limited liability company treated as a partnership for federal | 0001| income tax purposes, S corporation or sole proprietorship that | 0002| carries on a trade or business in New Mexico and that business | 0003| location has annual gross sales from its trade or business in New | 0004| Mexico of less than one million dollars ($1,000,000); | 0005| (3) "temporary assistance for needy families" | 0006| means the state program administered by the human services | 0007| department and funded by temporary assistance for needy families | 0008| block grants made pursuant to Title IV of the federal Social | 0009| Security Act as amended by P.L. 104-193, the Personal | 0010| Responsibility and Work Opportunity Reconciliation Act of 1996; | 0011| and | 0012| (4) "unsubsidized wages" means the gross wages | 0013| paid to a qualified recipient less the value of all other wage | 0014| subsidies provided to the employer for employment of that | 0015| qualified recipient by the state or federal government." | 0016| Section 2. A new section of the Corporate Income and | 0017| Franchise Tax Act is enacted to read: | 0018| "[NEW MATERIAL] WORK OPPORTUNITY TAX CREDIT.-- | 0019| A. To provide recipients of temporary assistance for | 0020| needy families with work and training opportunities, any taxpayer | 0021| who is a small business in New Mexico and who files a corporate | 0022| income tax return may claim a credit in an amount determined in | 0023| Subsection B of this section equal to a percentage of wages paid | 0024| to persons who are qualified recipients and who are employed by | 0025| the taxpayer during the taxable year for which the return is | 0001| filed. The tax credit may be known as the "work opportunity tax | 0002| credit". | 0003| B. A taxpayer who is a small business in New Mexico | 0004| may claim the credit provided in this section for each taxable | 0005| year in which the taxpayer employs one or more qualified | 0006| recipients. The maximum aggregate credit allowable shall be the | 0007| sum of: | 0008| (1) an amount equal to twenty-five percent of | 0009| the unsubsidized wages of qualified recipients who are paid a | 0010| gross hourly wage of less than six dollars fifty cents ($6.50) not | 0011| to exceed eight hundred twelve dollars ($812) per qualified | 0012| recipient; | 0013| (2) an amount equal to twenty-five percent of | 0014| the unsubsidized wages of qualified recipients who are paid a | 0015| gross hourly wage of at least six dollars fifty cents ($6.50) but | 0016| not less than a gross hourly wage of eight dollars ninety-nine | 0017| cents ($8.99), not to exceed one thousand six hundred eighty-six | 0018| dollars ($1,686) per qualified recipient; and | 0019| (3) an amount equal to twenty-five percent of | 0020| the unsubsidized wages of qualified recipients who are paid a | 0021| gross hourly wage of nine dollars ($9.00) or more, not to exceed | 0022| two thousand three hundred forty dollars ($2,340) per qualified | 0023| recipient. | 0024| C. A credit may be claimed for any number of qualified | 0025| recipients whose employment qualifies for a work opportunity tax | 0001| credit, but may be claimed only for the initial training period of | 0002| the qualified recipient's employment, not to exceed twenty-six | 0003| weeks. To claim the credit under this section, the taxpayer shall | 0004| submit with his claim: | 0005| (1) certification from the secretary of labor | 0006| that the employee is a qualified recipient; | 0007| (2) evidence satisfactory to the secretary of | 0008| taxation and revenue that the qualified recipient successfully | 0009| completed the specified training period, not to exceed twenty-six | 0010| weeks, for which the credit is being claimed and following that | 0011| period was employed permanently for at least thirty hours a week | 0012| by the taxpayer; and | 0013| (3) evidence satisfactory to the secretary of | 0014| taxation and revenue that the qualified recipient was hired | 0015| because of the growth of the business or to replace an employee | 0016| who left voluntarily or whose employment was terminated for cause. | 0017| D. The credit provided under this section may only be | 0018| deducted from the taxpayer's corporate income tax liability for | 0019| the taxable year. Any portion of the maximum tax credit provided | 0020| by this section that remains unused at the end of the taxpayer's | 0021| taxable year may be carried forward for three consecutive taxable | 0022| years; provided, the total tax credits claimed under this section | 0023| shall not exceed the maximum allowable under Subsection B of this | 0024| section. | 0025| E. As used in this section: | 0001| (1) "qualified recipient" means a recipient of | 0002| temporary assistance for needy families who is eighteen years of | 0003| age or older and who has been referred for employment through the | 0004| labor department; | 0005| (2) "small business in New Mexico" means any | 0006| single business location of a corporation that carries on a trade | 0007| or business in New Mexico that has annual gross sales from that | 0008| business location in New Mexico of less than one million dollars | 0009| ($1,000,000); | 0010| (3) "temporary assistance for needy families" | 0011| means the state program administered by the human services | 0012| department and funded by temporary assistance for needy families | 0013| block grants made pursuant to Title IV of the federal Social | 0014| Security Act as amended by P.L. 104-193, the Personal | 0015| Responsibility and Work Opportunity Reconciliation Act of 1996; | 0016| and | 0017| (4) "unsubsidized wages" means the gross wages | 0018| paid to a qualified recipient less the value of all other wage | 0019| subsidies provided to the employer for employment of that | 0020| qualified recipient by the state or federal government." | 0021| Section 3. APPLICABILITY.--The provisions of this act apply | 0022| to taxable years beginning on or after January 1, 1997. | 0023|  |