SENATE BILL 106
46th legislature - STATE OF NEW MEXICO - second session, 2004
INTRODUCED BY
Joseph J. Carraro
AN ACT
RELATING TO TAXATION; PROVIDING A GROSS RECEIPTS TAX DEDUCTION FOR RECEIPTS FROM THE SALE OF FOOD AT RETAIL FOOD STORES; CREATING NEW DISTRIBUTIONS TO MUNICIPALITIES AND COUNTIES; MODIFYING THE COUNTY EQUALIZATION DISTRIBUTION; PROVIDING A PENALTY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. A new section of the Tax Administration Act is enacted to read:
"[NEW MATERIAL] DISTRIBUTION TO MUNICIPALITIES--OFFSET FOR FOOD DEDUCTION.--
A. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to a municipality in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to the total deductions claimed pursuant to Section 7-9-92 NMSA 1978 for the month by taxpayers from business locations attributable to the municipality multiplied by the sum of:
(1) the combined rate of all municipal local option gross receipts taxes in effect in the municipality for the month; and
(2) one and two hundred twenty-five thousandths percent.
B. The distribution pursuant to Subsection A of this section is in lieu of revenue that would have been received by the municipality but for the deduction provided by Section 7-9-92 NMSA 1978. The distribution shall be considered gross receipts tax revenue and shall be used by the municipality in the same manner as gross receipts tax revenue, including payment of gross receipts tax revenue bonds.
C. For the purposes of this section, "business locations attributable to the municipality" means business locations:
(1) within the municipality;
(2) on land owned by the state, commonly known as the "state fairgrounds", within the exterior boundaries of the municipality;
(3) outside the boundaries of the municipality on land owned by the municipality; and
(4) on an Indian reservation or pueblo grant in an area that is contiguous to the municipality and in which the municipality performs services pursuant to a contract between the municipality and the Indian nation, tribe or pueblo if:
(a) the contract describes an area in which the municipality is required to perform services and requires the municipality to perform services that are substantially the same as the services the municipality performs for itself; and
(b) the governing body of the municipality has submitted a copy of the contract to the secretary."
Section 2. A new section of the Tax Administration Act is enacted to read:
"[NEW MATERIAL] DISTRIBUTION TO COUNTIES--OFFSET FOR FOOD DEDUCTION.--
A. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to a county in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to the sum of:
(1) the total deductions claimed pursuant to Section 7-9-92 NMSA 1978 for the month by taxpayers from business locations within a municipality in the county multiplied by the combined rate of all county local option gross receipts taxes in effect for the month that are imposed throughout the county; and
(2) the total deductions claimed pursuant to Section 7-9-92 NMSA 1978 for the month by taxpayers from business locations in the county but not within a municipality multiplied by the combined rate of all county local option gross receipts taxes in effect for the month that are imposed in the county area not within a municipality.
B. The distribution pursuant to Subsection A of this section is in lieu of revenue that would have been received by the county but for the deduction provided by Section 7-9-92 NMSA 1978. The distribution shall be considered gross receipts tax revenue and shall be used by the county in the same manner as gross receipts tax revenue, including payment of gross receipts tax revenue bonds."
Section 3. A new section of the Tax Administration Act is enacted to read:
"[NEW MATERIAL] PENALTY FOR OVERSTATING FOOD DEDUCTION.--A taxpayer who claims a deduction pursuant to Section 7-9-92 NMSA 1978 and overstates the amount of the deduction to which the taxpayer is entitled shall pay a penalty in the amount of the difference between the overstated deduction amount and the correct deduction amount multiplied by twice the total local option gross receipts tax rates in effect at the taxpayer's business location for which the deduction was claimed. This penalty shall be in addition to other applicable penalties."
Section 4. Section 7-1-6.16 NMSA 1978 (being Laws 1983, Chapter 213, Section 27, as amended) is amended to read:
"7-1-6.16. COUNTY EQUALIZATION DISTRIBUTION.--
A. Beginning on September 15, 1989 and on September 15 of each year thereafter, the department shall distribute to any county that has imposed or continued in effect during the state's preceding fiscal year a county gross receipts tax pursuant to [the County Gross Receipts Tax Act] Section 7-20E-9 NMSA 1978 an amount equal to:
(1) the product of a fraction, the numerator of which is the county's population and the denominator of which is the state's population, multiplied by the annual sum for the county; less
(2) the net receipts received by the department during the report year, including any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, attributable to the county gross receipts tax at a rate of one-eighth percent; provided that for any month in the report year, if no county gross receipts tax was in effect in the county in the previous month, the net receipts, for the purposes of this section, for that county for that month shall be zero.
B. If the amount determined by the calculation in Subsection A of this section is zero or a negative number for a county, no distribution shall be made to that county.
C. As used in this section:
(1) "annual sum" means for each county the sum of the monthly amounts for those months in the report year [which] that follow a month in which the county had in effect a county gross receipts tax;
(2) "monthly amount" means an amount equal to the product of:
(a) the net receipts received by the department in the month attributable to the state gross receipts tax [multiplied by] plus five percent of the total amount of deductions claimed pursuant to Section 7-9-92 NMSA for the month; and
(b) a fraction, the numerator of which is one-eighth percent and the denominator of which is the tax rate imposed by Section 7-9-4 NMSA 1978 in effect on the last day of the previous month;
(3) "population" means the most recent official census or estimate determined by the [bureau of the] United States census bureau for the unit or, if neither is available, the most current estimated population for the unit provided in writing by the bureau of business and economic research at the university of New Mexico; and
(4) "report year" means the twelve-month period ending on the July 31 immediately preceding the date upon which a distribution pursuant to this section is required to be made."
Section 5. A new section of the Gross Receipts and Compensating Tax Act, Section 7-9-92 NMSA 1978, is enacted to read:
"7-9-92. [NEW MATERIAL] DEDUCTION--GROSS RECEIPTS--SALE OF FOOD AND FOOD INGREDIENTS.--
A. Receipts from the sale of food at a retail food store that are not exempt from gross receipts taxation and are not deductible pursuant to another provision of the Gross Receipts and Compensating Tax Act may be deducted from gross receipts. The deduction provided by this section shall be separately stated by the taxpayer.
B. For the purposes of this section:
(1) "food" means any food or food product for home consumption that meets the definition of food in 7 USCA 2012 (g)(1) for purposes of the federal food stamp program; and
(2) "retail food store" means an establishment that sells food for home preparation and consumption that meets the definition of retail food store in 7 USCA 2012 (k)(1) for the purposes of the federal food stamp program, whether or not the establishment participates in the food stamp program."
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