SENATE BILL 101
50th legislature - STATE OF NEW MEXICO - second session, 2012
INTRODUCED BY
Tim Eichenberg
FOR THE REVENUE STABILIZATION AND TAX POLICY COMMITTEE
AN ACT
RELATING TO TAXATION; CLARIFYING THAT THE HIGH-WAGE JOBS TAX CREDIT APPLIES TO WAGES AND BENEFITS; DEFINING "WAGES AND BENEFITS"; EXTENDING THE CLAIMS PERIOD FOR HIGH-WAGE JOBS TAX CREDITS; DECLARING AN EMERGENCY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 7-9G-1 NMSA 1978 (being Laws 2004, Chapter 15, Section 1, as amended) is amended to read:
"7-9G-1. HIGH-WAGE JOBS TAX CREDIT--QUALIFYING HIGH-WAGE JOBS.--
A. A taxpayer who is an eligible employer may apply for, and the taxation and revenue department may allow, a tax credit for each new high-wage economic-based job. The credit provided in this section may be referred to as the "high-wage jobs tax credit". Beginning on January 1, 2012, all applications for high-wage jobs tax credits received by the taxation and revenue department must be received within one year following the end of the calendar year in which the qualifying period closes.
B. The purpose of the high-wage jobs tax credit is to provide an incentive for urban and rural businesses to create and fill new high-wage, long-term jobs in New Mexico.
[B.] C. The high-wage jobs tax credit may be claimed and allowed in an amount equal to ten percent of the wages and benefits distributed to an eligible employee in a new high-wage economic-based job, but shall not exceed twelve thousand dollars ($12,000).
[C.] D. The high-wage jobs tax credit may be claimed by an eligible employer for each new high-wage economic-based job performed for the year in which the new high-wage economic-based job is created and for the three following qualifying periods.
[D.] E. A new high-wage economic-based job shall not be eligible for a credit pursuant to this section unless the eligible employer's total number of employees with new high-wage economic-based jobs on the last day of the qualifying period at the location at which the job is performed or based is at least one more than the number on the day prior to the date the job was created.
F. For all applications for high-wage jobs tax credits received by the taxation and revenue department on or after January 1, 2012, a job shall not be eligible for a credit pursuant to this section if the job:
(1) was created within one hundred eighty days of a business merger, acquisition, association, affiliation, disposition or other change in organization or management affecting the eligible employer; and
(2) was performed by:
(a) the person who performed the job, or its functional equivalent, prior to the business merger, acquisition, association, affiliation, disposition or other change in organization or management; or
(b) another person replacing the person who performed the job, or its functional equivalent, prior to the business merger, acquisition, association, affiliation, disposition or other change in organization or management.
G. For all applications for high-wage jobs tax credits received by the taxation and revenue department on or after January 1, 2012, a job shall not be eligible for a credit pursuant to this section if the job is created due to an eligible employer entering into a contract or becoming a subcontractor to a contract with a governmental entity that replaces one or more entities performing functionally equivalent services for the governmental entity unless the job is a new high-wage economic-based job that was not being performed by an employee of the replaced entity.
[E.] H. For an application for a high-wage jobs tax credit filed with the taxation and revenue department after September 16, 2010, with respect to each new high-wage economic-based job for which an eligible employer seeks the high-wage jobs tax credit, the employer shall certify:
(1) the amount of wages and benefits paid to each eligible employee in a new high-wage economic-based job during each qualifying period;
(2) the number of weeks the position was occupied during the qualifying period;
(3) whether the new high-wage economic-based job was in a municipality with a population of forty thousand or more or with a population of less than forty thousand according to the most recent federal decennial census and whether the job was in the unincorporated area of a county; and
(4) the total number of employees employed by the employer at the job location on the day prior to the qualifying period and on the last day of the qualifying period.
[F.] I. To receive a high-wage jobs tax credit with respect to any qualifying period, an eligible employer shall apply to the taxation and revenue department on forms and in the manner prescribed by the department. The application shall include a certification made pursuant to Subsection [E] H of this section.
[G.] J. The credit provided in this section may be deducted from the modified combined tax liability of a taxpayer. If the credit exceeds the modified combined tax liability of the taxpayer, the excess shall be refunded to the taxpayer.
[H.] K. The economic development department shall report to the appropriate interim legislative committee before November 1 of each year the cost of this tax credit to the state and its impact on company recruitment and job creation.
L. Acceptance by a taxpayer of a high-wage jobs tax credit pursuant to this section is authorization by the person receiving the credit for the taxation and revenue department or the economic development department to reveal information to the legislature necessary to analyze the effectiveness of the high-wage jobs tax credit.
[I.] M. As used in this section:
[(1) "benefits" means any employee benefit plan as defined in Title 1, Section 3 of the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. 1002;
(2)] (1) "eligible employee" means an individual who is employed by an eligible employer and who is a resident of New Mexico; "eligible employee" does not include an individual who:
(a) bears any of the relationships described in Paragraphs (1) through (8) of 26 U.S.C. Section 152(a) to the employer or, if the employer is a corporation, to an individual who owns, directly or indirectly, more than fifty percent in value of the outstanding stock of the corporation or, if the employer is an entity other than a corporation, to an individual who owns, directly or indirectly, more than fifty percent of the capital and profits interest in the entity;
(b) if the employer is an estate or trust, is a grantor, beneficiary or fiduciary of the estate or trust or is an individual who bears any of the relationships described in Paragraphs (1) through (8) of 26 U.S.C. Section 152(a) to a grantor, beneficiary or fiduciary of the estate or trust;
(c) is a dependent, as that term is described in 26 U.S.C. Section 152(a)(9), of the employer or, if the taxpayer is a corporation, of an individual who owns, directly or indirectly, more than fifty percent in value of the outstanding stock of the corporation or, if the employer is an entity other than a corporation, of an individual who owns, directly or indirectly, more than fifty percent of the capital and profits interest in the entity or, if the employer is an estate or trust, of a grantor, beneficiary or fiduciary of the estate or trust; or
(d) is working or has worked as an employee or as an independent contractor for an entity that directly or indirectly owns stock in a corporation of the eligible employer or other interest of the eligible employer that represents fifty percent or more of the total voting power of that entity or has a value equal to fifty percent or more of the capital and profits interest in the entity;
[(3)] (2) "eligible employer" means an employer that:
(a) [made] exported more than fifty percent of its [sales] goods or services produced in New Mexico to persons outside New Mexico during the most recent twelve months of the employer's modified combined tax liability reporting periods ending prior to claiming a high-wage jobs tax credit; or
(b) is eligible for development training program assistance pursuant to Section 21-19-7 NMSA 1978;
[(4)] (3) "modified combined tax liability" means the total liability of the taxpayer for the reporting period for the gross receipts tax imposed [by] pursuant to Section 7-9-4 NMSA 1978, [together with any tax collected at the same time and in the same manner as the gross receipts tax, such as] the compensating tax imposed pursuant to Section 7-9-7 NMSA 1978 and the withholding tax [the interstate telecommunications gross receipts tax, the surcharges imposed by Section 63-9D-5 NMSA 1978 and the surcharge imposed by Section 63-9F-11 NMSA 1978, minus the amount of any credit other than the high-wage jobs tax credit applied against any or all of these taxes or surcharges] imposed on wages pursuant to Section 7-3-3 NMSA 1978, notwithstanding any distribution or transfer pursuant to the Tax Administration Act with respect to net receipts from those liabilities; but "modified combined tax liability" excludes [all amounts collected with respect to] any liability resulting from a local option gross receipts [taxes] tax;
[(5)] (4) "new high-wage economic-based job" means a new job created by an eligible employer on or after July 1, 2004 and prior to July 1, [2015] 2020 that is occupied for at least forty-eight weeks of a qualifying period by an eligible employee who is paid wages and benefits calculated for the qualifying period to be at least:
(a) for a new high-wage economic-based job created prior to January 1, 2012: 1) forty thousand dollars ($40,000) if the job is performed or based in a municipality with a population of forty thousand or more according to the most recent federal decennial census; and [(b)] 2) twenty-eight thousand dollars ($28,000) if the job is performed or based in a municipality with a population of less than forty thousand according to the most recent federal decennial census or in the unincorporated area of a county; and
(b) for a new high-wage economic-based job created on or after January 1, 2012: 1) sixty-five thousand dollars ($65,000) if the job is performed or based in a municipality with a population of sixty thousand or more according to the most recent federal decennial census; and 2) forty thousand dollars ($40,000) if the job is performed or based in a municipality with a population of less than sixty thousand according to the most recent federal decennial census or in the unincorporated area of a county;
[(6)] (5) "qualifying period" means the period of twelve months beginning on the day an eligible employee begins working in a new high-wage economic-based job or the period of twelve months beginning on the anniversary of the day an eligible employee began working in a new high-wage economic-based job; and
[(7)] (6) "wages and benefits" means [wages as defined in Paragraphs (1), (2) and (3) of 26 U.S.C. Section 51(c)] all remuneration in cash and the cash value of remuneration paid in any other form for services performed by an employee for an employer."
SECTION 2. TEMPORARY PROVISION.--An employer who filed an application between September 16, 2010 and the effective date of this act for a high-wage jobs tax credit that was denied, in whole or in part, may file a new application for approval of the part of the high-wage jobs tax credit that was denied, which shall be evaluated pursuant to the amended provisions set forth in this act, notwithstanding any other provisions of law that would prevent the refiling of a new claim; provided that the new claim is filed not later than one year after the effective date of this act.
SECTION 3. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.
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