SENATE BILL 540
51st legislature - STATE OF NEW MEXICO - first session, 2013
INTRODUCED BY
John Arthur Smith
AN ACT
RELATING TO TAXATION; ELIMINATING THE FOOD AND MEDICAL HOLD
HARMLESS PROVISIONS OVER A TEN-YEAR PERIOD; ALLOWING MUNICIPALITIES AND COUNTIES THE DISCRETION TO IMPOSE A GROSS RECEIPTS TAX THROUGH AN ORDINANCE THAT DOES NOT PROVIDE CERTAIN DEDUCTIONS CONTAINED IN THE GROSS RECEIPTS AND COMPENSATING TAX ACT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 7-1-6.46 NMSA 1978 (being Laws 2004, Chapter 116, Section 1, as amended) is amended to read:
"7-1-6.46. DISTRIBUTION TO MUNICIPALITIES--OFFSET FOR FOOD DEDUCTION AND HEALTH CARE PRACTITIONER SERVICES DEDUCTION.--
A. For a municipality that has not elected to impose a gross receipts tax through an ordinance that does not provide a deduction contained in the Gross Receipts and Compensating Tax Act and that has a population of less than ten thousand according to the most recent federal decennial census, 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 sum of:
[(1) for a municipality having a population of less than ten thousand according to the most recent federal decennial census and having per capita taxable gross receipts for the previous calendar year that are less than the average per capita taxable gross receipts for all municipalities for that same calendar year:
(a)] (1) 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 the combined rate of all municipal local option gross receipts taxes in effect in the municipality for the month plus one and two hundred twenty-five thousandths percent; and
[(b)] (2) the total deductions claimed pursuant to Section 7-9-93 NMSA 1978 for the month by taxpayers from business locations attributable to the municipality multiplied by the sum of the combined rate of all municipal local option gross receipts taxes in effect in the municipality for the month plus one and two hundred twenty-five thousandths percent. [or
(2)] B. For a municipality not described in [Paragraph (1) of this] Subsection A of this section, a distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the municipality in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to the sum of:
[(a)] (1) 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 the combined rate of all municipal local option gross receipts taxes in effect in the municipality on January 1, 2007 plus one and two hundred twenty-five thousandths percent in the following percentages:
(a) before July 1, 2014, one hundred percent;
(b) on or after July 1, 2014 and prior to July 1, 2015, ninety percent;
(c) on or after July 1, 2015 and prior to July 1, 2016, eighty percent;
(d) on or after July 1, 2016 and prior to July 1, 2017, seventy percent;
(e) on or after July 1, 2017 and prior to July 1, 2018, sixty percent;
(f) on or after July 1, 2018 and prior to July 1, 2019, fifty percent;
(g) on or after July 1, 2019 and prior to July 1, 2020, forty percent;
(h) on or after July 1, 2020 and prior to July 1, 2021, thirty percent;
(i) on or after July 1, 2021 and prior to July 1, 2022, twenty percent; and
(j) on or after July 1, 2022 and prior to July 1, 2023, ten percent; and
[(b)] (2) the total deductions claimed pursuant to Section 7-9-93 NMSA 1978 for the month by taxpayers from business locations attributable to the municipality multiplied by the sum of the combined rate of all municipal local option gross receipts taxes in effect in the municipality on January 1, 2007 plus one and two hundred twenty-five thousandths percent in the following percentages:
(a) before July 1, 2014, one hundred percent;
(b) on or after July 1, 2014 and prior to July 1, 2015, ninety percent;
(c) on or after July 1, 2015 and prior to July 1, 2016, eighty percent;
(d) on or after July 1, 2016 and prior to July 1, 2017, seventy percent;
(e) on or after July 1, 2017 and prior to July 1, 2018, sixty percent;
(f) on or after July 1, 2018 and prior to July 1, 2019, fifty percent;
(g) on or after July 1, 2019 and prior to July 1, 2020, forty percent;
(h) on or after July 1, 2020 and prior to July 1, 2021, thirty percent;
(i) on or after July 1, 2021 and prior to July 1, 2022, twenty percent; and
(j) on or after July 1, 2022 and prior to July 1, 2023, ten percent.
[B.] C. The distribution pursuant to [Subsection] Subsections A and B of this section is in lieu of revenue that would have been received by the municipality but for the deductions provided by Sections 7-9-92 and 7-9-93 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. A distribution pursuant to this section to a municipality not described in Subsection A of this section or to a municipality that has imposed a gross receipts tax through an ordinance that does not provide a deduction contained in the Gross Receipts and Compensating Tax Act shall not be made on or after July 1, 2023.
D. If the reductions made by this 2013 act to the distributions made pursuant to Subsections A and B of this section impair the ability of a municipality to meet its principal or interest payment obligations for revenue bonds that are outstanding prior to July 1, 2013 and that are secured by the pledge of all or part of the municipality's revenue from the distribution made pursuant to this section, then the amount distributed pursuant to this section to that municipality shall be increased by an amount sufficient to meet the required payment; provided that the total amount distributed to that municipality pursuant to this section does not exceed the amount that would have been due that municipality pursuant to this section as it was in effect on June 30, 2013.
[C.] E. 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 tribe or Indian 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.
[D.] F. A distribution pursuant to this section may be adjusted for a distribution made to a tax increment development district with respect to a portion of a gross receipts tax increment dedicated by a municipality pursuant to the Tax Increment for Development Act."
SECTION 2. Section 7-1-6.47 NMSA 1978 (being Laws 2004, Chapter 116, Section 2, as amended) is amended to read:
"7-1-6.47. DISTRIBUTION TO COUNTIES--OFFSET FOR FOOD DEDUCTION AND HEALTH CARE PRACTITIONER SERVICES DEDUCTION.--
A. For a county that has not elected to impose a gross receipts tax through an ordinance that does not provide a deduction contained in the Gross Receipts and Compensating Tax Act and that has a population of less than forty-eight thousand according to the most recent federal decennial census, 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) for a county having a population of less than forty-eight thousand according to the most recent federal decennial census:
(a)] (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;
[(b)] (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;
[(c)] (3) the total deductions claimed pursuant to Section 7-9-93 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
[(d)] (4) the total deductions claimed pursuant to Section 7-9-93 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. [or
(2)] B. For a county not described in [Paragraph (1) of this] Subsection A of this section, a distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the 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:
[(a)] (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 on January 1, 2007 that are imposed throughout the county in the following percentages:
(a) before July 1, 2014, one hundred percent;
(b) on or after July 1, 2014 and prior to July 1, 2015, ninety percent;
(c) on or after July 1, 2015 and prior to July 1, 2016, eighty percent;
(d) on or after July 1, 2016 and prior to July 1, 2017, seventy percent;
(e) on or after July 1, 2017 and prior to July 1, 2018, sixty percent;
(f) on or after July 1, 2018 and prior to July 1, 2019, fifty percent;
(g) on or after July 1, 2019 and prior to July 1, 2020, forty percent;
(h) on or after July 1, 2020 and prior to July 1, 2021, thirty percent;
(i) on or after July 1, 2021 and prior to July 1, 2022, twenty percent; and
(j) on or after July 1, 2022 and prior to July 1, 2023, ten percent;
[(b)] (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 on January 1, 2007 that are imposed in the county area not within a municipality in the following percentages:
(a) before July 1, 2014, one hundred percent;
(b) on or after July 1, 2014 and prior to July 1, 2015, ninety percent;
(c) on or after July 1, 2015 and prior to July 1, 2016, eighty percent;
(d) on or after July 1, 2016 and prior to July 1, 2017, seventy percent;
(e) on or after July 1, 2017 and prior to July 1, 2018, sixty percent;
(f) on or after July 1, 2018 and prior to July 1, 2019, fifty percent;
(g) on or after July 1, 2019 and prior to July 1, 2020, forty percent;
(h) on or after July 1, 2020 and prior to July 1, 2021, thirty percent;
(i) on or after July 1, 2021 and prior to July 1, 2022, twenty percent; and
(j) on or after July 1, 2022 and prior to July 1, 2023, ten percent;
[(c)] (3) the total deductions claimed pursuant to Section 7-9-93 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 on January 1, 2007 that are imposed throughout the county in the following percentages:
(a) before July 1, 2014, one hundred percent;
(b) on or after July 1, 2014 and prior to July 1, 2015, ninety percent;
(c) on or after July 1, 2015 and prior to July 1, 2016, eighty percent;
(d) on or after July 1, 2016 and prior to July 1, 2017, seventy percent;
(e) on or after July 1, 2017 and prior to July 1, 2018, sixty percent;
(f) on or after July 1, 2018 and prior to July 1, 2019, fifty percent;
(g) on or after July 1, 2019 and prior to July 1, 2020, forty percent;
(h) on or after July 1, 2020 and prior to July 1, 2021, thirty percent;
(i) on or after July 1, 2021 and prior to July 1, 2022, twenty percent; and
(j) on or after July 1, 2022 and prior to July 1, 2023, ten percent; and
[(d)] (4) the total deductions claimed pursuant to Section 7-9-93 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 on January 1, 2007 that are imposed in the county area not within a municipality in the following percentages:
(a) before July 1, 2014, one hundred percent;
(b) on or after July 1, 2014 and prior to July 1, 2015, ninety percent;
(c) on or after July 1, 2015 and prior to July 1, 2016, eighty percent;
(d) on or after July 1, 2016 and prior to July 1, 2017, seventy percent;
(e) on or after July 1, 2017 and prior to July 1, 2018, sixty percent;
(f) on or after July 1, 2018 and prior to July 1, 2019, fifty percent;
(g) on or after July 1, 2019 and prior to July 1, 2020, forty percent;
(h) on or after July 1, 2020 and prior to July 1, 2021, thirty percent;
(i) on or after July 1, 2021 and prior to July 1, 2022, twenty percent; and
(j) on or after July 1, 2022 and prior to July 1, 2023, ten percent.
[B.] C. The distribution pursuant to [Subsection] Subsections A and B of this section is in lieu of revenue that would have been received by the county but for the deductions provided by Sections 7-9-92 and 7-9-93 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. A distribution pursuant to this section to a county not described in Subsection A of this section or to a county that has imposed a gross receipts tax through an ordinance that does not provide a deduction contained in the Gross Receipts and Compensating Tax Act shall not be made on or after July 1, 2023.
D. If the reductions made by this 2013 act to the distributions made pursuant to Subsections A and B of this section impair the ability of a county to meet its principal or interest payment obligations for revenue bonds that are outstanding prior to July 1, 2013 and that are secured by the pledge of all or part of the county's revenue from the distribution made pursuant to this section, then the amount distributed pursuant to this section to that county shall be increased by an amount sufficient to meet the required payment; provided that the total amount distributed to that county pursuant to this section does not exceed the amount that would have been due that county pursuant to this section as it was in effect on June 30, 2013.
[C.] E. A distribution pursuant to this section may be adjusted for a distribution made to a tax increment development district with respect to a portion of a gross receipts tax increment dedicated by a county pursuant to the Tax Increment for Development Act."
SECTION 3. Section 7-19D-4 NMSA 1978 (being Laws 1993, Chapter 346, Section 4) is amended to read:
"7-19D-4. ORDINANCE SHALL CONFORM TO CERTAIN PROVISIONS OF THE GROSS RECEIPTS AND COMPENSATING TAX ACT AND REQUIREMENTS OF THE DEPARTMENT.--
A. An ordinance imposing a tax [under] pursuant to the provisions of the Municipal Local Option Gross Receipts Taxes Act shall adopt by reference the same definitions and the same provisions relating to exemptions and deductions as are contained in the Gross Receipts and Compensating Tax Act then in effect and as it may be amended from time to time, except that the ordinance shall not be required to provide a deduction provided pursuant to Section 7-9-46, 7-9-51, 7-9-52, 7-9-52.1, 7-9-54.2, 7-9-54.3, 7-9-54.5, 7-9-56, 7-9-56.3, 7-9-57.2, 7-9-60, 7-9-61.2, 7-9-62, 7-9-73, 7-9-73.2, 7-9-77.1, 7-9-83, 7-9-86, 7-9-92, 7-9-93, 7-9-95, 7-9-98 through 7-9-101, 7-9-103.1, 7-9-103.2, 7-9-104, 7-9-106, 7-9-107, 7-9-109 or 7-9-111 through 7-9-114 NMSA 1978. Except as provided pursuant to Subsection C of this section, a municipality may continue to enact and repeal an ordinance authorized as provided pursuant to the Municipal Local Option Gross Receipts Taxes Act; provided that the model ordinance establishing the tax base and allowing or prohibiting the deductions shall not be modified for a period of two years, except to conform with the Gross Receipts and Compensating Tax Act.
B. The governing body of any municipality imposing a tax [under] pursuant to provisions of the Municipal Local Option Gross Receipts Taxes Act shall impose the tax by adopting the model ordinance with respect to the tax furnished to the municipality by the department. An ordinance that does not conform substantially to the model ordinance of the department is not valid.
C. A municipality that has a population of less than ten thousand according to the most recent federal decennial census shall by January 1, 2014, and every ten years thereafter, elect whether to impose a gross receipts tax through an ordinance that does not provide a deduction contained in the Gross Receipts and Compensating Tax Act. Once that election occurs, that municipality shall maintain the model ordinance without adding or removing a deduction not required to be provided pursuant to Subsection A of this section for a period of ten years, except to conform to the extent necessary with the Gross Receipts and Compensating Tax Act."
SECTION 4. Section 7-20E-4 NMSA 1978 (being Laws 1993, Chapter 354, Section 4) is amended to read:
"7-20E-4. ORDINANCE SHALL CONFORM TO CERTAIN PROVISIONS OF THE GROSS RECEIPTS AND COMPENSATING TAX ACT AND REQUIREMENTS OF THE DEPARTMENT.--
A. An ordinance imposing a tax [under] pursuant to the provisions of the County Local Option Gross Receipts Taxes Act shall adopt by reference the same definitions and the same provisions relating to exemptions and deductions as are contained in the Gross Receipts and Compensating Tax Act then in effect and as it may be amended from time to time, except that the ordinance shall not be required to provide a deduction provided pursuant to Section 7-9-46, 7-9-51, 7-9-52, 7-9-52.1, 7-9-54.2, 7-9-54.3, 7-9-54.5, 7-9-56, 7-9-56.3, 7-9-57.2, 7-9-60, 7-9-61.2, 7-9-62, 7-9-73, 7-9-73.2, 7-9-77.1, 7-9-83, 7-9-86, 7-9-92, 7-9-93, 7-9-95, 7-9-98 through 7-9-101, 7-9-103.1, 7-9-103.2, 7-9-104, 7-9-106, 7-9-107, 7-9-109 or 7-9-111 through 7-9-114 NMSA 1978. Except as provided pursuant to Subsection C of this section, a county may continue to enact and repeal an ordinance authorized as provided pursuant to the County Local Option Gross Receipts Taxes Act; provided that the model ordinance establishing the tax base and allowing deductions shall not be modified for a period of two years, except to conform to the extent necessary with the Gross Receipts and Compensating Tax Act.
B. The governing body of any county imposing a tax [under] authorized by the County Local Option Gross Receipts Taxes Act shall impose the tax by adopting the model ordinance with respect to the tax furnished to the county by the department. An ordinance that does not conform substantially to the model ordinance of the department is not valid.
C. A county that has a population of less than forty-eight thousand according to the most recent federal decennial census shall by January 1, 2014, and every ten years thereafter, elect whether to impose a gross receipts tax through an ordinance that does not provide a deduction contained in the Gross Receipts and Compensating Tax Act. Once that election occurs, that county shall maintain the model ordinance without adding or removing a deduction not required to be provided pursuant to Subsection A of this section for a period of ten years, except to conform to the extent necessary with the Gross Receipts and Compensating Tax Act."
SECTION 5. EFFECTIVE DATE.--The effective date of the
provisions of this act is July 1, 2013.
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