HOUSE BILL 374
48th legislature - STATE OF NEW MEXICO - second session, 2008
RELATING TO TAXATION; PROVIDING AN INCOME TAX CREDIT FOR INVESTMENT IN A NEW MEXICO-BASED MEDIA COMPANY.
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--INVESTMENT IN NEW MEXICO-BASED MEDIA COMPANY.--
A. A taxpayer who files a New Mexico income tax return, is not a dependent of another taxpayer and makes a qualified investment in a New Mexico-based media company may claim a credit in an amount not to exceed ten percent of not more than two hundred fifty thousand dollars ($250,000) of the qualified investment. The credit may be claimed for the taxable year in which the investment is made. The tax credit provided in this section shall be known as the "New Mexico media investment tax credit".
B. A taxpayer may claim the New Mexico media investment tax credit for up to two qualified investments in a taxable year, provided that each investment is in a different New Mexico-based media company. A taxpayer may claim the credit for qualified investments in the same media company for not more than three taxable years.
C. A taxpayer may not claim the New Mexico media investment tax credit for an amount that has been included in a claim for a deduction or credit pursuant to the Internal Revenue Code or another provision of the Income Tax Act.
D. To qualify as a New Mexico-based media company for the purposes of this section, a company must:
(1) maintain its principal place of business in New Mexico; and
(2) be engaged in the manufacturing or development of feature films, television, regional and national commercials, documentaries, video games or post production.
E. A taxpayer shall apply for certification of eligibility for the New Mexico media investment tax credit from the economic development department. If the economic development department determines that the taxpayer has made a qualified investment in a New Mexico-based media company that complies with the requirements of this section, it shall issue a certificate of eligibility to the taxpayer. The certificate shall be dated and shall include a calculation of the amount of the New Mexico media investment tax credit for which the taxpayer is eligible. The economic development department may issue rules governing the procedure for administering the provisions of this subsection.
F. To claim the New Mexico media investment tax credit, the taxpayer must provide to the taxation and revenue department a certificate of eligibility issued by the economic development department pursuant to Subsection E of this section and any other information the taxation and revenue department may require to determine the amount of the tax credit due the taxpayer. If the requirements of this section have been met, the taxation and revenue department shall approve the claim for the credit.
G. A taxpayer who otherwise qualifies and claims the New Mexico media investment tax credit for a qualified investment made by a partnership or other business association of which the taxpayer is a member may claim the credit only in proportion to the taxpayer's interest in the partnership or association. The total credit claimed in the aggregate by all members of the partnership or business association in a taxable year shall not exceed twenty-five thousand dollars ($25,000).
H. 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 that would have been allowed on a joint return.
I. The New Mexico media investment tax credit may only be deducted from the taxpayer's income tax liability. Any portion of the credit that remains unused at the end of the taxpayer's taxable year may be carried forward for three consecutive years.
J. As used in this section:
(1) "equity" means common or preferred stock of a corporation, a partnership interest in a limited partnership or a membership interest in a limited liability company, including debt subject to an option in favor of the creditor to convert the debt into common or preferred stock, a partnership interest or a membership interest;
(2) "film" means a single medium or multimedia program, excluding advertising messages other than national or regional advertising messages intended for exhibition, that:
(a) is fixed on film, a digital medium, videotape, computer disc, laser disc or other similar delivery medium;
(b) can be viewed or reproduced;
(c) is not intended to and does not violate a provision of Chapter 30, Article 37 NMSA 1978; and
(d) is intended for reasonable commercial exploitation for the delivery medium used;
(3) "post production" means editing, Foley recording, automatic dialogue replacement, sound editing, special effects, including computer-generated imagery or other effects, scoring and music editing, beginning and end credits, negative cutting, soundtrack production, dubbing, subtitling or addition of sound or visual effects; and
(4) "qualified investment" means a cash investment in a New Mexico-based media company for equity, but does not include an investment by a taxpayer if the taxpayer, a member of the taxpayer's immediate family or an entity affiliated with the taxpayer receives compensation from the media company."
Section 2. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2008.
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