0001| | 0002| SENATE BILL 190 | 0003| 43RD LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 1998 | 0004| INTRODUCED BY | 0005| CARROLL H. LEAVELL | 0006| | 0007| | 0008| | 0009| | 0010| | 0011| AN ACT | 0012| RELATING TO TAXATION; CREATING THE RURAL JOB TAX CREDIT. | 0013| | 0014| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0015| Section 1. TAX CREDIT--RURAL JOB TAX CREDIT.-- | 0016| A. The tax credit created by this section may be | 0017| referred to as the "rural job tax credit". Until June 30, | 0018| 2004, every eligible employer may apply for, and the taxation | 0019| and revenue department may allow, a tax credit for each | 0020| qualifying job the employer creates in the period beginning | 0021| July 1, 1998 and ending June 30, 2003. The maximum tax credit | 0022| amount with respect to each qualifying job is equal to: | 0023| (1) twenty-five percent of the first sixteen | 0024| thousand dollars ($16,000) in wages paid for the qualifying | 0025| job if the job is performed or based at a location in a tier | - 1 - 0001| one area; or | 0002| (2) twelve and one-half percent of the first | 0003| sixteen thousand dollars ($16,000) in wages paid if the | 0004| qualifying job is performed or based at a location in a tier | 0005| two area. | 0006| B. As used in this section: | 0007| (1) "eligible employee" means any individual | 0008| other than an individual who: | 0009| (a) bears any of the relationships | 0010| described in Paragraphs (1) through (8) of 26 U.S.C. Section | 0011| 152(a) to the employer or, if the employer is a corporation, | 0012| to an individual who owns, directly or indirectly, more than | 0013| fifty percent in value of the outstanding stock of the | 0014| corporation or, if the employer is an entity other than a | 0015| corporation, to any individual who owns, directly or | 0016| indirectly, more than fifty percent of the capital and profits | 0017| interests in the entity; | 0018| (b) if the employer is an estate or | 0019| trust, is a grantor, beneficiary or fiduciary of the estate or | 0020| trust or is an individual who bears any of the relationships | 0021| described in Paragraphs (1) through (8) of 26 U.S.C. Section | 0022| 152(a) to a grantor, beneficiary or fiduciary of the estate or | 0023| trust; or | 0024| (c) is a dependent, as that term is | 0025| described in 26 U.S.C. Section 152(a)(9), of the employer or, | - 2 - 0001| if the taxpayer is a corporation, of an individual who owns, | 0002| directly or indirectly, more than fifty percent in value of | 0003| the outstanding stock of the corporation or, if the employer | 0004| is an entity other than a corporation, of any individual who | 0005| owns, directly or indirectly, more than fifty percent of the | 0006| capital and profits interests in the entity or, if the | 0007| employer is an estate or trust, of a grantor, beneficiary or | 0008| fiduciary of the estate or trust; | 0009| (2) "eligible employer" means an employer | 0010| who has been approved for in-plant training assistance | 0011| pursuant to Section 21-19-7 NMSA 1978; | 0012| (3) "metropolitan statistical area" means a | 0013| metropolitan statistical area in New Mexico as determined by | 0014| the United States bureau of the census; | 0015| (4) "modified combined tax liability" means | 0016| the total liability for the reporting period for gross | 0017| receipts tax imposed by Section 7-9-4 NMSA 1978 together with | 0018| any tax collected at the same time and in the same manner as | 0019| that gross receipts tax, such as the compensating tax, the | 0020| withholding tax, the interstate telecommunications gross | 0021| receipts tax, the surcharges imposed by Section 63-9D-5 NMSA | 0022| 1978 and the surcharge imposed by Section 63-9F-11 NMSA 1978, | 0023| minus the amount of any credit other than the rural job tax | 0024| credit applied against any or all of these taxes or | 0025| surcharges; but "modified combined tax liability" excludes all | - 3 - 0001| amounts collected with respect to local option gross receipts | 0002| taxes; | 0003| (5) "qualifying job" means a job established | 0004| by the employer that: | 0005| (a) qualifies for in-plant training | 0006| assistance; and | 0007| (b) is occupied by an eligible employee | 0008| for at least forty-eight weeks of a qualifying period; | 0009| (6) "qualifying period" means the period of | 0010| twelve months beginning on the day an eligible employee begins | 0011| working in a qualifying job or the period of twelve months | 0012| beginning on the anniversary of the day an eligible employee | 0013| began working in a qualifying job; | 0014| (7) "rural area" means any part of the state | 0015| other than: | 0016| (a) an H class county; | 0017| (b) the state fairgrounds; | 0018| (c) an incorporated municipality within | 0019| a metropolitan statistical area if the municipality's | 0020| population is thirty thousand or more according to the most | 0021| recent federal decennial census; and | 0022| (d) any area within ten miles of the | 0023| exterior boundaries of a municipality described in | 0024| Subparagraph (c) of this paragraph; | 0025| (8) "tier one area" means any municipality | - 4 - 0001| within the rural area if the municipality's population | 0002| according to the most recent federal decennial census is | 0003| fifteen thousand or less; | 0004| (9) "tier two area" means any part of the | 0005| rural area not a tier one area; and | 0006| (10) "wages" means wages as defined by | 0007| Paragraphs (1), (2) and (3) of 26 U.S.C. Section 51(c). | 0008| C. The amount of the rural job tax credit shall be | 0009| six and one-fourth percent of the first sixteen thousand | 0010| dollars ($16,000) in wages paid for the qualifying job in a | 0011| qualifying period. The rural job tax credit may be claimed | 0012| for each qualifying job for a maximum of: | 0013| (1) four qualifying periods for each | 0014| qualifying job performed or based at a location in a tier one | 0015| area; and | 0016| (2) two qualifying periods for each | 0017| qualifying job performed or based at a location in a tier two | 0018| area. | 0019| D. With respect to each qualifying job for which | 0020| an eligible employer seeks the rural job tax credit, the | 0021| employer shall request the economic development department to | 0022| certify the amount of wages paid to each eligible employee | 0023| during each qualifying period, the number of weeks during the | 0024| qualifying period the position was occupied and whether the | 0025| qualifying job was in a tier one or tier two area. The | - 5 - 0001| economic development department may require the employer to | 0002| submit such information as is necessary for the economic | 0003| development department to make the certification requested. | 0004| When the economic development department obtains sufficient | 0005| information, either from its own records or from the employer, | 0006| the economic development department shall make the | 0007| certification requested. | 0008| E. The economic development department shall | 0009| determine which employers are eligible employers and shall | 0010| report the listing of eligible businesses to the taxation and | 0011| revenue department in a manner and at times the departments | 0012| shall agree upon. | 0013| F. To receive a rural job tax credit with respect | 0014| to any qualifying period, an eligible employer must apply to | 0015| the taxation and revenue department on forms and in the manner | 0016| the department may prescribe. The application shall include a | 0017| copy of the certification from the economic development | 0018| department made pursuant to Subsection D of this section. If | 0019| all the requirements of this section have been complied with, | 0020| the taxation and revenue department may issue to the applicant | 0021| a document granting a tax credit for the respective qualifying | 0022| period. The tax credit document shall be numbered for | 0023| identification and declare its date of issuance and the amount | 0024| of rural job tax credit allowed for the respective jobs | 0025| created. Such tax credit documents may be sold, exchanged or | - 6 - 0001| otherwise transferred and can be carried forward for a period | 0002| of three years from the date of issuance. The parties to such | 0003| a transaction shall notify the department of the sale, | 0004| exchange or transfer within ten days of the sale, exchange or | 0005| transfer. | 0006| G. The holder of the tax credit document may apply | 0007| all or a portion of the rural job tax credit granted by the | 0008| document against the holder's modified combined tax liability, | 0009| personal income tax liability or corporate income tax | 0010| liability. Any balance of rural job tax credit granted by the | 0011| document may be carried forward for up to three years from the | 0012| date of issuance of the tax credit document. No amount of | 0013| rural job tax credit may be applied against a gross receipts | 0014| tax imposed by a municipality or county. | 0015| H. Notwithstanding the provisions of Section 7-1-8 | 0016| NMSA 1978, the taxation and revenue department may disclose to | 0017| any person the balance of rural job tax credit remaining on | 0018| any tax credit document and the balance of credit remaining on | 0019| that document for any period. | 0020| I. The secretary of economic development, the | 0021| secretary of taxation and revenue and the secretary of labor | 0022| or their designees shall annually evaluate the effectiveness | 0023| of the rural job tax credit in stimulating economic | 0024| development in the rural areas of New Mexico and make a joint | 0025| report of their findings to each session of the legislature so | - 7 - 0001| long as the rural job tax credit is in effect. | 0002| Section 2. CONTINUED APPLICABILITY OF RURAL JOB TAX | 0003| CREDIT.--The balance of any rural job tax credit granted with | 0004| respect to qualifying periods occurring after July 1, 2004 or | 0005| remaining on a tax credit document issued prior to that date | 0006| may be applied after that date in the manner provided in | 0007| Section 1 of this act against the holder's modified combined | 0008| tax liability or corporate or personal income tax liability as | 0009| if the provisions of Section 1 of this act were still in | 0010| effect. | 0011| Section 3. DELAYED REPEAL.--Section 1 of this act is | 0012| repealed on July 1, 2004. | 0013| Section 4. EFFECTIVE DATE.--The effective date of the | 0014| provisions of this act is July 1, 1998. | 0015|  | 0016| | 0017| | 0018| | 0019| | 0020| | 0021| | 0022| | 0023| |