45th legislature - STATE OF NEW MEXICO - first session, 2001

RELATING TO TAXATION; ENACTING SECTIONS OF THE INCOME TAX ACT AND THE CORPORATE INCOME AND FRANCHISE TAX ACT TO PROVIDE A CREDIT FOR CERTAIN TRIBAL TAXES.

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] CREDIT FOR QUALIFYING TRIBAL TAX ON ECONOMIC DEVELOPMENT PROPERTY.--

A. A taxpayer who files an individual New Mexico income tax return may claim a credit in an amount determined pursuant to Subsection B of this section if the taxpayer or a pass-through business entity of which the taxpayer is an owner paid a qualifying tribal tax on economic development property during the taxable year.

B. The amount of the credit provided in this section shall be equal to the lesser of the amount of the qualifying tribal tax imposed and paid in the taxable year on the economic development property or the amount of property tax imposed and paid in the taxable year on the same economic development property pursuant to Section 7-37-7 NMSA 1978. If the taxes were paid by a pass-through business entity of which the taxpayer is an owner, the taxpayer may claim the portion of the credit allocated to the taxpayer by the pass-through business entity. The total credit claimed by all owners of the pass-through business entity shall not exceed the amount of the credit authorized in a taxable year pursuant to this subsection.

C. 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 credit provided under this section that would have been allowed on a joint return.

D. The credit provided in this section may only be deducted from the taxpayer's New Mexico income tax liability. Any portion of the credit provided by this section that remains unused at the end of the taxpayer's taxable year may be carried forward for three consecutive taxable years, provided that the total tax credits claimed under this section shall not exceed the maximum amount authorized in this section.

E. As used in this section:

(1) "economic development property" means:

(a) buildings and other improvements of land constructed or leased after January 1, 2000, but not including property subject to valuation under Sections 7-36-22 through 7-36-31 NMSA 1978;

(b) tangible personal property subject to valuation under Section 7-36-33 NMSA 1978 constructed or acquired by the taxpayer after January 1, 2000; and

(c) tangible personal property described in Paragraph (7) of Subsection B of Section 7-36-8 NMSA 1978 acquired by the taxpayer after January 1, 2000;

(2) "owner" means a partner in a partnership not taxed as a corporation for federal income tax purposes for the taxable year, a shareholder of an S corporation or of a corporation other than an S corporation that is not taxed as a corporation for federal income tax purposes for the taxable year, a member of a limited liability company or any similar person holding an ownership interest in a pass-through business entity;

(3) "pass-through business entity" means any business association other than:

(a) a sole proprietorship;

(b) an estate or trust; or

(c) a corporation, limited liability company, partnership or other entity not a sole proprietorship taxed as a corporation for federal income tax purposes for the taxable year;

(4) "qualifying tribal tax" means an ad valorem property tax imposed by Santa Ana Pueblo on economic development property located on Santa Ana Pueblo land; and

(5) "Santa Ana Pueblo land" means all land located within the exterior boundaries of the Santa Ana reservation or pueblo grant and all land held by the United States in trust for Santa Ana Pueblo."

Section 2. A new section of the Corporate Income and Franchise Tax Act is enacted to read:

"[NEW MATERIAL] CREDIT FOR QUALIFYING TRIBAL TAX ON ECONOMIC DEVELOPMENT PROPERTY.--

A. A taxpayer who files a corporate income tax return may claim a credit for an amount determined pursuant to Subsection B of this section if the taxpayer paid a qualifying tribal tax on economic development property during the taxable year.

B. The amount of the credit provided in this section shall be equal to the lesser of the amount of the qualifying tribal tax imposed and paid on the economic development property or the amount of property tax imposed and paid on the same property pursuant to Section 7-37-7 NMSA 1978.

C. The credit provided in this section may only be deducted from the taxpayer's corporate income tax liability. Any portion of the credit provided by this section that remains unused at the end of the taxpayer's taxable year may be carried forward for three consecutive taxable years, provided that the total tax credits claimed under this section shall not exceed the maximum amount authorized in this section.

D. As used in this section:

(1) "economic development property" means:

(a) buildings and other improvements of land constructed or leased after January 1, 2000, but not including property subject to valuation under Sections 7-36-22 through 7-36-31 NMSA 1978;

(b) tangible personal property subject to valuation under Section 7-36-33 NMSA 1978 constructed or acquired by the taxpayer after January 1, 2000; and

(c) tangible personal property described in Paragraph (7) of Subsection B of Section 7-36-8 NMSA 1978 acquired by the taxpayer after January 1, 2000;

(2) "qualifying tribal tax" means an ad valorem property tax imposed by Santa Ana Pueblo on economic development property located on Santa Ana Pueblo land; and

(3) "Santa Ana Pueblo land" means all land located within the exterior boundaries of the Santa Ana reservation or pueblo grant and all land held by the United States in trust for Santa Ana Pueblo."