HOUSE BILL 233

47th legislature - STATE OF NEW MEXICO - first session, 2005

INTRODUCED BY

Terry T. Marquardt

AN ACT

RELATING TO TAXATION; PROVIDING AN INCOME TAX CREDIT FOR TUITION PAYMENTS AT ACCREDITED PRIVATE ELEMENTARY AND SECONDARY SCHOOLS.

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] SCHOOL CHOICE TAX CREDIT.--

          A. A taxpayer who files an individual New Mexico income tax return and is not a dependent of another taxpayer may claim a credit for tuition payments made by the taxpayer for a dependent who is enrolled in an accredited private elementary or secondary school in New Mexico. The credit may be claimed in an amount equal to the tuition paid during the taxable year for which the credit is claimed not to exceed three thousand dollars ($3,000) for each eligible dependent. The credit provided in this section shall be known as the "school choice tax credit".

          B. A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the school choice tax credit that would have been allowed on a joint return.

          C. The credit provided in this section may be deducted from the taxpayer's New Mexico income tax liability for the taxable year. If the credit exceeds the taxpayer's income tax liability, the excess shall be refunded to the taxpayer.

          D. Receipt of a tax credit pursuant to this section for tuition payments made to a private school does not authorize state involvement or entanglement with religious instruction or other operations of the private school.

          E. For the purposes of this section, "dependent" means "dependent" as defined in Section 152 of the Internal Revenue Code."

     Section 2. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2005.

- 2 -