SENATE BILL 85

51st legislature - STATE OF NEW MEXICO - first session, 2013

INTRODUCED BY

Sue Wilson Beffort

AN ACT

RELATING TO TAXATION; PROVIDING A DEDUCTION FROM GROSS RECEIPTS FOR CERTAIN BUSINESSES FOR SALES OF SERVICES TO OUT-OF-STATE PURCHASERS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

     "[NEW MATERIAL] DEDUCTION--GROSS RECEIPTS--SERVICES TO OUT-OF-STATE PURCHASERS.--

          A. Until July 1, 2018, receipts from the sale of services to out-of-state purchasers may be deducted by a small business from gross receipts, provided that the small business has entered into a separate contract with the out-of-state purchaser to provide those services and the services are delivered by remote delivery.

          B. The purpose of the deduction provided in this section is to help to support small businesses in New Mexico that sell services to out-of-state purchasers.

          C. Deductions for sales of services to out-of-state purchasers shall be stated separately by the taxpayer on forms provided by the department.

          D. The department shall annually report to the revenue stabilization and tax policy committee aggregate amounts of deductions taken pursuant to this section, the number of taxpayers claiming the deduction and any other information that is necessary to determine that the deduction is performing the purpose for which it is enacted.

          E. As used in this section:

                (1) "out-of-state" means that delivery of the service is to an address outside of New Mexico; and

                (2) "small business" means a business:

                     (a) with fewer than ten employees, including all persons for whom the business pays part or all of the person's social security taxes due pursuant to the Federal Insurance Contributions Act; and

                     (b) that has paid gross receipts taxes pursuant to the provisions of the Gross Receipts and Compensating Tax Act for the five consecutive years prior to the first year in which a deduction pursuant to this section is taken."

     SECTION 2. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2013.

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