HOUSE BILL 596

51st legislature - STATE OF NEW MEXICO - first session, 2013

INTRODUCED BY

Antonio "Moe" Maestas

AN ACT

RELATING TO TAXATION; PROVIDING FOR A LATIN AMERICAN TRADE INCOME TAX CREDIT AND A LATIN AMERICAN TRADE CORPORATE INCOME TAX CREDIT.

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] LATIN AMERICAN TRADE INCOME TAX CREDIT.--

          A. A taxpayer who files an individual New Mexico income tax return, who is not a dependent of another individual and who, after January 1, 2014 and prior to January 1, 2018, exported more than twenty percent of its goods or services produced in New Mexico to persons in Latin America during the taxable year may claim a credit in an amount equal to five thousand dollars ($5,000). The tax credit provided in this section may be referred to as the "Latin American trade income tax credit".

          B. The purpose of the Latin American trade income tax credit is to encourage businesses to engage in international trade with Latin America.

          C. A taxpayer may claim the Latin American trade income tax credit in the taxable year in which the taxpayer exported more than twenty percent of its goods or services produced in New Mexico to persons in Latin America. The taxpayer shall claim the tax credit within one year following the end of the calendar year in which the taxpayer exported more than twenty percent of its goods or services produced in New Mexico to persons in Latin America.

          D. The taxpayer may only apply the Latin American trade income tax credit against the taxpayer's income tax liability. That portion of the tax credit approved by the department that exceeds a taxpayer's income tax liability in the taxable year in which the tax credit is claimed shall not be refunded to the taxpayer. The tax credit shall not be carried forward or transferred to another taxpayer.

          E. A husband and wife filing separate returns for a taxable year for which they could have filed a joint return may each claim only one-half of the Latin American trade income tax credit that would have been claimed on a joint return.

          F. A taxpayer who otherwise qualifies and claims the Latin American trade income tax credit in New Mexico that may be claimed by a partnership or limited liability company of which the taxpayer is a member may claim a tax credit only in the proportion to the taxpayer's interest in the partnership or limited liability company. 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 A of this section.

          G. The taxpayer shall submit an application to the economic development department that identifies the total goods or services produced in New Mexico by the taxpayer and the percentage of those goods or services exported to persons in Latin America that qualifies the taxpayer for the tax credit and any other information that the economic development department requires to determine the eligibility of the taxpayer for the tax credit.

          H. The economic development department shall adopt rules establishing procedures to certify a taxpayer for the purposes of obtaining a Latin American trade income tax credit. The rules shall ensure that a taxpayer claims a tax credit based on the exports of goods or services only once. The economic development department shall issue a dated certificate of eligibility containing the taxpayer's information, the amount of Latin American trade income tax credit for which the taxpayer is eligible and any other information required by the taxation and revenue department. All certificates of eligibility issued pursuant to this subsection shall be sequentially numbered, and an account of all certificates issued or destroyed shall be maintained by the economic development department. The taxation and revenue department shall audit the records of the Latin American trade income tax credit maintained by the economic development department on a periodic basis to ensure effective administration of the tax credit and compliance with the Tax Administration Act and with this section.

          I. To claim a Latin American trade income tax credit, the taxpayer shall provide to the taxation and revenue department the certificate of eligibility issued by the economic development department pursuant to this section to the taxpayer for the taxable year in which the tax credit is claimed.

          J. The taxation and revenue department and economic development department shall compile an annual report that includes the number of taxpayers approved 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 2015 and every three years thereafter, the departments 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 whether the tax credit is performing the purpose for which it was created."

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

     "[NEW MATERIAL] LATIN AMERICAN TRADE CORPORATE INCOME TAX CREDIT.--

          A. A taxpayer who files a New Mexico corporate income tax return and who, after January 1, 2014 and prior to January 1, 2018, exported more than twenty percent of its goods or services produced in New Mexico to persons in Latin America during the taxable year may claim a tax credit in an amount equal to five thousand dollars ($5,000). The tax credit provided in this section may be referred to as the "Latin American trade corporate income tax credit".

          B. The purpose of the Latin American trade corporate income tax credit is to encourage businesses to engage in international trade with Latin America.

          C. A taxpayer may claim the Latin American trade corporate income tax credit in the taxable year in which the taxpayer exported more than twenty percent of its goods or services produced in New Mexico to persons in Latin America. The taxpayer shall claim the tax credit within one year following the end of the calendar year in which the taxpayer exported more than twenty percent of its goods or services produced in New Mexico to persons in Latin America.

          D. The taxpayer may only apply the Latin American trade corporate income tax credit against the taxpayer's corporate income tax liability. That portion of the tax credit approved by the department that exceeds a taxpayer's corporate income tax liability in the taxable year in which the tax credit is claimed shall not be refunded to the taxpayer. The tax credit shall not be carried forward or transferred to another taxpayer.

          E. The economic development department shall adopt rules establishing procedures to certify a taxpayer for the purposes of obtaining a Latin American trade corporate income tax credit. The rules shall ensure that a taxpayer claims a tax credit based on the exports of goods or services only once. The economic development department shall issue a dated certificate of eligibility containing the taxpayer's information, the amount of Latin American trade corporate income tax credit for which the taxpayer is eligible and any other information required by the taxation and revenue department. All certificates of eligibility issued pursuant to this subsection shall be sequentially numbered, and an account of all certificates issued or destroyed shall be maintained by the economic development department. The taxation and revenue department shall audit the records of the Latin American trade corporate income tax credit maintained by the economic development department on a periodic basis to ensure effective administration of the tax credit and compliance with the Tax Administration Act and with this section.

          F. To claim the Latin American trade corporate income tax credit, the taxpayer shall provide to the taxation and revenue department the certificate of eligibility issued by the economic development department pursuant to this section to the taxpayer for the taxable year in which the tax credit is claimed.

          G. The taxation and revenue department and economic development department shall compile an annual report that includes the number of taxpayers approved 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 2015 and every three years thereafter, the departments 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 whether the tax credit is performing the purpose for which it was created."

     SECTION 3. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or afer January 1, 2014.

     SECTION 4. EFFECTIVE DATE.--The effective date of the provisions of this act is January 1, 2014.