HOUSE BILL 512
52nd legislature - STATE OF NEW MEXICO - first session, 2015
INTRODUCED BY
David M. Gallegos
AN ACT
RELATING TO TAXATION; PROVIDING TAX DEDUCTIONS AND CREDITS FOR NATURAL GAS MOTOR VEHICLES; EXEMPTING NATURAL GAS MOTOR VEHICLES FROM THE MOTOR VEHICLE EXCISE TAX.
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 TAX AND COMPENSATING TAX--NATURAL GAS MOTOR VEHICLE EQUIPMENT AND INSTALLATION.--
A. From January 1, 2016 through December 31, 2022, receipts from the sale and installation of qualified natural gas motor vehicle equipment may be deducted from gross receipts, and the value of qualified natural gas motor vehicle equipment used in New Mexico may be deducted in computing the compensating tax due.
B. The purpose of the deduction on the sale and installation of natural gas motor vehicle equipment is to address a concern for the environment, improve air quality, reduce dependence on volatile sources of foreign oil and enhance the state's economic base by promoting the use of and network for the state's abundant supply of natural gas.
C. To be eligible for the deduction on installation of qualified natural gas motor vehicle equipment from gross receipts, the equipment shall be installed by a technician who is:
(1) certified or approved by the equipment manufacturer; and
(2) licensed in New Mexico to modify a motor vehicle that is propelled by gasoline or diesel fuel so that a motor vehicle may be propelled by natural gas fuel.
D. A taxpayer allowed a deduction pursuant to this section shall report the amount of the deduction separately in a manner required by the department.
E. The department shall compile an annual report on the deductions provided in this section that shall include the number of taxpayers that claimed the deductions, the number of vehicles for which the deductions were claimed, the aggregate amount of deductions claimed and any other information necessary to evaluate the effectiveness of the deductions. Beginning in 2018 and every two years thereafter that the deductions are in effect, the department shall compile and present the annual report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the cost and benefit to the state of the deductions.
F. For the purposes of this section:
(1) "emissions benefits" means benefits that are created when natural gas fuel is used in qualified natural gas motor vehicle equipment that meets federal clean air standards or is otherwise shown to emit oxides of nitrogen, volatile organic compounds, carbon monoxide, particulates or any combination of these at a lower level than for gasoline or diesel fuel used in a comparable vehicle or engine;
(2) "natural gas fuel" means compressed, liquefied or renewable natural gas; and
(3) "qualified natural gas motor vehicle equipment" means fuel systems that are installed on a motor vehicle with a gross vehicle weight of more than fourteen thousand pounds, provide emissions benefits and are certified by the United States environmental protection agency and associated component parts necessary for a:
(a) dedicated motor vehicle to operate exclusively on natural gas fuel;
(b) bi-fuel motor vehicle to operate on natural gas fuel for a minimum distance of one hundred miles without refilling; or
(c) dual fuel motor vehicle to operate on a mixture of natural gas fuel and gasoline or natural gas fuel and diesel fuel if natural gas fuel provides a minimum of fifty-five percent of the power required for the vehicle."
SECTION 2. Section 7-14-6 NMSA 1978 (being Laws 1988, Chapter 73, Section 16, as amended) is amended to read:
"7-14-6. EXEMPTIONS FROM TAX.--
A. A person who acquires a vehicle out of state thirty or more days before establishing a domicile in this state is exempt from the tax if the vehicle was acquired for personal use.
B. A person applying for a certificate of title for a vehicle registered in another state is exempt from the tax if the person has previously registered and titled the vehicle in New Mexico and has owned the vehicle continuously since that time.
C. A vehicle with a certificate of title owned by this state or any political subdivision is exempt from the tax.
D. A person is exempt from the tax if the person has a disability at the time the person purchases a vehicle and can prove to the motor vehicle division of the department or its agent that modifications have been made to the vehicle that are:
(1) due to that person's disability; and
(2) necessary to enable that person to drive that vehicle or be transported in that vehicle.
E. A person is exempt from the tax if the person is a bona fide resident of New Mexico who served in the armed forces of the United States and who suffered, while serving in the armed forces or from a service-connected cause, the loss or complete and total loss of use of:
(1) one or both legs at or above the ankle; or
(2) one or both arms at or above the wrist.
F. A person [who] is exempt from the tax if:
(1) the person acquires a vehicle for subsequent lease [shall be exempt from the tax if: (1)] and:
(a) the person does not use the vehicle in any manner other than holding it for lease or sale or leasing or selling it in the ordinary course of business;
[(2)] (b) the lease is for a term of more than six months;
[(3)] (c) the receipts from the subsequent lease are subject to the gross receipts tax; and
[(4)] (d) the vehicle does not have a gross vehicle weight of over twenty-six thousand pounds
[G. from July 1, 2004 through June 30, 2009, vehicles that are gasoline-electric hybrid vehicles with a United States environmental protection agency fuel economy rating of at least twenty-seven and one-half miles per gallon are eligible for a one-time exemption from the tax at the time of the issuance of the original certificate of title for the vehicle]; or
(2) from January 1, 2016 through December 31, 2022, the person purchases a new vehicle with a gross vehicle weight of more than fourteen thousand pounds that is produced or authorized by the original equipment manufacturer and certified by the United States environmental protection agency to operate on natural gas fuel with emissions benefits.
G. For the purposes of this section:
(1) "emissions benefits" means benefits that are created when natural gas fuel is used in a motor vehicle that uses natural gas fuel for power and that meets federal clean air standards or is otherwise shown to emit oxides of nitrogen, volatile organic compounds, carbon monoxide, particulates or any combination of these at a lower level than for gasoline or diesel fuel used in a comparable vehicle or engine; and
(2) "natural gas fuel" means a compressed, liquefied or renewable natural gas."
SECTION 3. A new section of the Income Tax Act is enacted to read:
"[NEW MATERIAL] NATURAL GAS VEHICLE INCOME TAX CREDIT.--
A. Prior to January 1, 2023, a taxpayer who is not a dependent of another taxpayer may apply for, and the department may allow, a credit against the taxpayer's liability imposed pursuant to the Income Tax Act if the taxpayer:
(1) purchases or leases a natural gas motor vehicle or purchases and has installed qualified natural gas motor vehicle equipment; or
(2) sells or leases a natural gas motor vehicle, or sells qualified natural gas motor vehicle equipment or the installation of that equipment, to a person who is not a taxpayer.
B. The tax credit provided in this section may be referred to as the "natural gas vehicle income tax credit". The purpose of the natural gas vehicle income tax credit is to address a concern for the environment, improve air quality, reduce dependence on volatile sources of foreign oil and enhance the state's economic base by promoting the use of and network for the state's abundant supply of natural gas.
C. The natural gas vehicle income tax credit may be claimed once per vehicle identification number in the amount, per vehicle, of:
(1) fifty-five percent of the cost of qualified natural gas motor vehicle equipment; provided that the credit shall not exceed:
(a) six thousand dollars ($6,000) for a light duty passenger motor vehicle with a gross vehicle weight of not more than fourteen thousand pounds;
(b) seven thousand five hundred dollars ($7,500) for a light duty truck with a gross vehicle weight of not more than fourteen thousand pounds;
(c) fifteen thousand dollars ($15,000) for a light-to-medium heavy duty vehicle with a gross vehicle weight of more than fourteen thousand pounds but not more than twenty-six thousand pounds; and
(d) twenty-five thousand dollars ($25,000) for a heavy duty vehicle with a gross vehicle weight of more than twenty-six thousand pounds; or
(2) if the cost of qualified natural gas motor vehicle equipment installed as part of a new natural gas motor vehicle by the original equipment manufacturer or its authorized modifier cannot be reasonably determined by the department, eighteen percent of the cost of a purchase of the new natural gas motor vehicle; provided that the amount shall not exceed:
(a) six thousand dollars ($6,000) for a light duty passenger vehicle with a gross vehicle weight of not more than fourteen thousands pounds;
(b) seven thousand five hundred dollars ($7,500) for a light duty truck with a gross vehicle weight of not more than fourteen thousand pounds;
(c) fifteen thousand dollars ($15,000) for a light-to-medium heavy duty vehicle with a gross vehicle weight of more than fourteen thousand pounds but not more than twenty-six thousand pounds; and
(d) twenty-five thousand dollars ($25,000) for a heavy duty vehicle with a gross vehicle weight of more than twenty-six thousand pounds.
D. Subject to the limitation in Subsection G of this section, a taxpayer may claim the natural gas vehicle income tax credit for the taxable year in which the taxpayer makes one or more qualified purchases or leases; provided that the amount of the tax credit does not exceed five hundred thousand dollars ($500,000) per taxable year. To receive a tax credit, a taxpayer shall apply to the department on forms and in the manner prescribed by the department. The completed application shall include a certification made pursuant to Subsection E of this section.
E. The energy, minerals and natural resources department shall promulgate rules for the issuance of a certificate of eligibility for the purposes of claiming a natural gas vehicle income tax credit. A taxpayer may request a certificate of eligibility from the energy, minerals and natural resources department to provide to the taxation and revenue department to establish eligibility for a tax credit. If the energy, minerals and natural resources department determines that the taxpayer meets the requirements of this section, it shall issue the certificate to the taxpayer, which shall include a calculation of the maximum amount of tax credit for which the taxpayer would be eligible.
F. If the natural gas vehicle income tax credit exceeds the taxpayer's income tax liability, the excess shall be refunded to the taxpayer.
G. The maximum aggregate amount of natural gas vehicle income tax credits and natural gas vehicle corporate income tax credits that may be allowed in a year is:
(1) for calendar year 2016, two million five hundred thousand dollars ($2,500,000);
(2) for calendar year 2017, three million five hundred thousand dollars ($3,500,000);
(3) for calendar year 2018, four million five hundred thousand dollars ($4,500,000); and
(4) for calendar years 2019 through 2022, five million five hundred thousand dollars ($5,500,000).
H. The taxation and revenue department shall allow a natural gas vehicle income tax credit only for a purchase certified by the energy, minerals and natural resources department. Completed applications for the tax credit shall be considered in the order received by the taxation and revenue department.
I. Married individuals filing separate returns for a taxable year for which they could have filed a joint return may each claim only one-half of the natural gas vehicle income tax credit that would have been claimed on a joint return.
J. A taxpayer may be allocated the right to claim a natural gas vehicle income tax credit in proportion to the taxpayer's ownership interest if the taxpayer owns an interest in a business entity that is taxed for federal income tax purposes as a partnership and that business entity has met all of the requirements to be eligible for the tax credit. The total tax credit claimed by all members of the partnership or limited liability company shall not exceed the allowable tax credit pursuant to Subsection C of this section.
K. A taxpayer allowed a natural gas vehicle income tax credit shall report the amount of the tax credit to the department in a manner required by the department.
L. The department shall compile an annual report on the natural gas vehicle income tax credit that shall include the number of taxpayers approved by the department to receive the tax credit, the aggregate amount of tax credits approved and any other information necessary to evaluate the effectiveness of the tax credit. Beginning in 2018 and every five years thereafter that the tax credit is in effect, the department shall compile and present the annual reports to the revenue stabilization and tax policy committee and the legislative finance committee, with an analysis of the effectiveness and cost of the tax credit and of whether the tax credit is performing the purpose for which it was created.
M. As used in this section:
(1) "cost of qualified natural gas motor vehicle equipment" means the retail cost paid by the:
(a) purchaser or lessee for a new natural gas motor vehicle produced or authorized by the original equipment manufacturer, for the portion of the vehicle that is qualified natural gas motor vehicle equipment; or
(b) owner of a motor vehicle for the conversion of the vehicle to operate on natural gas fuel, which includes the purchase of qualified natural gas motor vehicle equipment and the installation of that equipment by a technician who is: 1) certified or approved by the equipment manufacturer; and 2) licensed in New Mexico to modify a motor vehicle that is propelled by gasoline or diesel fuel so that the motor vehicle may be propelled by natural gas fuel;
(2) "emissions benefits" means benefits that are created when natural gas fuel is used in qualified natural gas motor vehicle equipment that meets federal clean air standards or is otherwise shown to emit oxides of nitrogen, volatile organic compounds, carbon monoxide, particulates or any combination of these at a lower level than for gasoline or diesel fuel used in a comparable vehicle or engine;
(3) "natural gas fuel" means compressed, liquefied or renewable natural gas;
(4) "natural gas motor vehicle" means a new or converted motor vehicle registered in New Mexico or registered under the international registration plan and base plated in New Mexico with qualified natural gas motor vehicle equipment certified by the United States environmental protection agency to allow the vehicle to operate on natural gas fuel; and
(5) "qualified natural gas motor vehicle equipment" means fuel systems that provide emissions benefits and are certified by the United States environmental protection agency and associated component parts necessary for a:
(a) dedicated motor vehicle to operate exclusively on natural gas fuel;
(b) bi-fuel motor vehicle to operate on natural gas fuel for a minimum distance of one hundred miles without refilling; or
(c) dual fuel motor vehicle to operate on a mixture of natural gas fuel and gasoline or natural gas fuel and diesel fuel if natural gas fuel provides a minimum of fifty-five percent of the power required for the vehicle."
SECTION 4. A new section of the Corporate Income and Franchise Tax Act is enacted to read:
"[NEW MATERIAL] NATURAL GAS VEHICLE CORPORATE INCOME TAX
CREDIT.--
A. Prior to January 1, 2023, a taxpayer may apply for, and the department may allow, a credit against the taxpayer's liability imposed pursuant to the Corporate Income and Franchise Tax Act if the taxpayer:
(1) purchases or leases a natural gas motor vehicle or purchases and has installed qualified natural gas motor vehicle equipment; or
(2) sells or leases a natural gas motor vehicle, or sells qualified natural gas motor vehicle equipment or the installation of that equipment, to a person that is not a taxpayer.
B. The tax credit provided in this section may be referred to as the "natural gas vehicle corporate income tax credit". The purpose of the natural gas vehicle corporate income tax credit is to address a concern for the environment, improve air quality, reduce dependence on volatile sources of foreign oil and enhance the state's economic base by promoting the use of and network for the state's abundant supply of natural gas.
C. The natural gas vehicle corporate income tax credit may be claimed once per vehicle identification number in the amount, per vehicle, of:
(1) fifty-five percent of the cost of qualified natural gas motor vehicle equipment; provided that the credit shall not exceed:
(a) six thousand dollars ($6,000) for a light duty passenger motor vehicle with a gross vehicle weight of not more than fourteen thousand pounds;
(b) seven thousand five hundred dollars ($7,500) for a light duty truck with a gross vehicle weight of not more than fourteen thousand pounds;
(c) fifteen thousand dollars ($15,000) for a light-to-medium heavy duty vehicle with a gross vehicle weight of more than fourteen thousand pounds but not more than twenty-six thousand pounds; and
(d) twenty-five thousand dollars ($25,000) for a heavy duty vehicle with a gross vehicle weight of more than twenty-six thousand pounds; or
(2) if the cost of qualified natural gas motor vehicle equipment installed as part of a new natural gas motor vehicle by the original equipment manufacturer or its authorized modifier cannot be reasonably determined by the department, eighteen percent of the cost of a purchase of the new natural gas motor vehicle; provided that the amount shall not exceed:
(a) six thousand dollars ($6,000) for a light duty passenger vehicle with a gross vehicle weight of not more than fourteen thousands pounds;
(b) seven thousand five hundred dollars ($7,500) for a light duty truck with a gross vehicle weight of not more than fourteen thousand pounds;
(c) fifteen thousand dollars ($15,000) for a light-to-medium heavy duty vehicle with a gross vehicle weight of more than fourteen thousand pounds but not more than twenty-six thousand pounds; and
(d) twenty-five thousand dollars ($25,000) for a heavy duty vehicle with a gross vehicle weight of more than twenty-six thousand pounds.
D. Subject to the limitation in Subsection G of this section, a taxpayer may claim the natural gas vehicle corporate income tax credit for the taxable year in which the taxpayer makes one or more qualified purchases or leases; provided that the amount of the tax credit does not exceed five hundred thousand dollars ($500,000) per taxable year. To receive a tax credit, a taxpayer shall apply to the department on forms and in the manner prescribed by the department. The completed application shall include a certification made pursuant to Subsection E of this section.
E. The energy, minerals and natural resources department shall promulgate rules for the issuance of a certificate of eligibility for the purposes of claiming a natural gas vehicle corporate income tax credit. A taxpayer may request a certificate of eligibility from the energy, minerals and natural resources department to provide to the taxation and revenue department to establish eligibility for a tax credit. If the energy, minerals and natural resources department determines that the taxpayer meets the requirements of this section, it shall issue the certificate to the taxpayer, which shall include a calculation of the maximum amount of tax credit for which the taxpayer would be eligible.
F. If the natural gas vehicle corporate income tax credit exceeds the taxpayer's corporate income tax liability, the excess shall be refunded to the taxpayer.
G. The maximum aggregate amount of natural gas vehicle income tax credits and natural gas vehicle corporate income tax credits that may be allowed in any fiscal year is:
(1) for calendar year 2016, two million five hundred thousand dollars ($2,500,000);
(2) for calendar year 2017, three million five hundred thousand dollars ($3,500,000);
(3) for calendar year 2018, four million five hundred thousand dollars ($4,500,000); and
(4) for calendar years 2019 through 2022, five million five hundred thousand dollars ($5,500,000).
H. The taxation and revenue department shall allow a natural gas vehicle corporate income tax credit only for a purchase certified by the energy, minerals and natural resources department. Completed applications for the tax credit shall be considered in the order received by the taxation and revenue department.
I. A taxpayer allowed a natural gas vehicle corporate income tax credit shall report the amount of the tax credit to the department in a manner required by the department.
J. The department shall compile an annual report on the natural gas vehicle corporate income tax credit that shall include the number of taxpayers approved by the department to receive the tax credit, the aggregate amount of tax credits approved and any other information necessary to evaluate the effectiveness of the tax credit. Beginning in 2018 and every five years thereafter that the tax credit is in effect, the department shall compile and present the annual reports to the revenue stabilization and tax policy committee and the legislative finance committee, with an analysis of the effectiveness and cost of the tax credit and of whether the tax credit is performing the purpose for which it was created.
K. As used in this section:
(1) "cost of qualified natural gas motor vehicle equipment" means the retail cost paid by the:
(a) purchaser or lessee for a new natural gas motor vehicle produced or authorized by the original equipment manufacturer, for the portion of the vehicle that is qualified natural gas motor vehicle equipment; or
(b) owner of a motor vehicle for the conversion of the vehicle to operate on natural gas fuel, which includes the purchase of qualified natural gas motor vehicle equipment and the installation of that equipment by a technician who is: 1) certified or approved by the equipment manufacturer; and 2) licensed in New Mexico to modify a motor vehicle that is propelled by gasoline or diesel fuel so that the motor vehicle may be propelled by natural gas fuel;
(2) "emissions benefits" means benefits that are created when natural gas fuel is used in qualified natural gas motor vehicle equipment that meets federal clean air standards or is otherwise shown to emit oxides of nitrogen, volatile organic compounds, carbon monoxide, particulates or any combination of these at a lower level than for gasoline or diesel fuel used in a comparable vehicle or engine;
(3) "natural gas fuel" means compressed, liquefied or renewable natural gas;
(4) "natural gas motor vehicle" means a new or converted motor vehicle registered in New Mexico or registered under the international registration plan and base plated in New Mexico with qualified natural gas motor vehicle equipment certified by the United States environmental protection agency to allow the vehicle to operate on natural gas fuel; and
(5) "qualified natural gas motor vehicle equipment" means fuel systems that provide emissions benefits and are certified by the United States environmental protection agency and associated component parts necessary for a:
(a) dedicated motor vehicle to operate exclusively on natural gas fuel;
(b) bi-fuel motor vehicle to operate on natural gas fuel for a minimum distance of one hundred miles without refilling; or
(c) dual fuel motor vehicle to operate on a mixture of natural gas fuel and gasoline or natural gas fuel and diesel fuel if natural gas fuel provides a minimum of fifty-five percent of the power required for the vehicle."
SECTION 5. APPLICABILITY.--The provisions of Sections 3 and 4 of this act apply to taxable years beginning on or after January 1, 2015.
SECTION 6. EFFECTIVE DATE.--The effective date of the provisions of this act is January 1, 2016.
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