SB0343

SENATE BILL 343

53rd legislature - STATE OF NEW MEXICO - first session, 2017

INTRODUCED BY

Ron Griggs

AN ACT

RELATING TO TAXATION; EXEMPTING DIVIDENDS AND INTEREST FROM THE INCOME OF PERSONS OVER THE AGE OF FIFTY-FIVE; REDUCING THE TAX CREDITS FOR CERTAIN CONVEYANCES OF REAL PROPERTY; INCREASING THE WORKING FAMILIES TAX CREDIT; REDUCING THE RURAL HEALTH CARE PRACTITIONER TAX CREDIT; INCREASING THE VETERAN EMPLOYMENT TAX CREDITS; REDUCING THE CORPORATE INCOME TAX RATE; ENACTING THE GROSS RECEIPTS TAXES ON FOOD AND HEALTH CARE PRACTITIONER SERVICES ACT; DISTRIBUTING THE REVENUE FROM THOSE TAXES TO MUNICIPALITIES AND COUNTIES; REDUCING CERTAIN DEDUCTIONS FROM GROSS RECEIPTS; INCREASING THE MOTOR VEHICLE EXCISE TAX; DISTRIBUTING ONE-HALF OF THE REVENUE FROM THE MOTOR VEHICLE EXCISE TAX TO THE STATE ROAD FUND; ENACTING THE RECORDATION TAX ACT; REPEALING THE HOLD HARMLESS DISTRIBUTIONS TO MUNICIPALITIES AND COUNTIES THAT OFFSET THE FOOD AND HEALTH CARE PRACTITIONER DEDUCTIONS FROM GROSS RECEIPTS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. Section 7-1-2 NMSA 1978 (being Laws 1965, Chapter 248, Section 2, as amended) is amended to read:

"7-1-2. APPLICABILITY.--The Tax Administration Act applies to and governs:

A. the administration and enforcement of the following taxes or tax acts as they now exist or may hereafter be amended:

(1) Income Tax Act;

(2) Withholding Tax Act;

(3) Venture Capital Investment Act;

(4) Gross Receipts and Compensating Tax Act and any state gross receipts tax;

(5) Liquor Excise Tax Act;

(6) Local Liquor Excise Tax Act;

(7) any municipal local option gross receipts tax;

(8) any county local option gross receipts tax;

(9) Special Fuels Supplier Tax Act;

(10) Gasoline Tax Act;

(11) petroleum products loading fee, which fee shall be considered a tax for the purpose of the Tax Administration Act;

(12) Alternative Fuel Tax Act;

(13) Cigarette Tax Act;

(14) Estate Tax Act;

(15) Railroad Car Company Tax Act;

(16) Investment Credit Act, rural job tax credit, Laboratory Partnership with Small Business Tax Credit Act, Technology Jobs and Research and Development Tax Credit Act, Film Production Tax Credit Act, Affordable Housing Tax Credit Act and high-wage jobs tax credit;

(17) Corporate Income and Franchise Tax Act;

(18) Uniform Division of Income for Tax Purposes Act;

(19) Multistate Tax Compact;

(20) Tobacco Products Tax Act; [and]

(21) the telecommunications relay service surcharge imposed by Section 63-9F-11 NMSA 1978, which surcharge shall be considered a tax for the purposes of the Tax Administration Act;

(22) the Gross Receipts Taxes on Food and Health Care Practitioner Services Act; and

(23) the Recordation Tax Act;

B. the administration and enforcement of the following taxes, surtaxes, advanced payments or tax acts as they now exist or may hereafter be amended:

(1) Resources Excise Tax Act;

(2) Severance Tax Act;

(3) any severance surtax;

(4) Oil and Gas Severance Tax Act;

(5) Oil and Gas Conservation Tax Act;

(6) Oil and Gas Emergency School Tax Act;

(7) Oil and Gas Ad Valorem Production Tax Act;

(8) Natural Gas Processors Tax Act;

(9) Oil and Gas Production Equipment Ad Valorem Tax Act;

(10) Copper Production Ad Valorem Tax Act;

(11) any advance payment required to be made by any act specified in this subsection, which advance payment shall be considered a tax for the purposes of the Tax Administration Act;

(12) Enhanced Oil Recovery Act;

(13) Natural Gas and Crude Oil Production Incentive Act; and

(14) intergovernmental production tax credit and intergovernmental production equipment tax credit;

C. the administration and enforcement of the following taxes, surcharges, fees or acts as they now exist or may hereafter be amended:

(1) Weight Distance Tax Act;

(2) the workers' compensation fee authorized by Section 52-5-19 NMSA 1978, which fee shall be considered a tax for purposes of the Tax Administration Act;

(3) Uniform Unclaimed Property Act (1995);

(4) 911 emergency surcharge and the network and database surcharge, which surcharges shall be considered taxes for purposes of the Tax Administration Act;

(5) the solid waste assessment fee authorized by the Solid Waste Act, which fee shall be considered a tax for purposes of the Tax Administration Act;

(6) the water conservation fee imposed by Section 74-1-13 NMSA 1978, which fee shall be considered a tax for the purposes of the Tax Administration Act; and

(7) the gaming tax imposed pursuant to the Gaming Control Act; and

D. the administration and enforcement of all other laws, with respect to which the department is charged with responsibilities pursuant to the Tax Administration Act, but only to the extent that the other laws do not conflict with the Tax Administration Act."

SECTION 2. Section 7-1-6.15 NMSA 1978 (being Laws 1983, Chapter 211, Section 20, as amended by Laws 2015, Chapter 89, Section 1 and by Laws 2015, Chapter 100, Section 1) is amended to read:

"7-1-6.15. ADJUSTMENTS OF DISTRIBUTIONS OR TRANSFERS TO MUNICIPALITIES OR COUNTIES.--

A. The provisions of this section apply to:

(1) any distribution to a municipality pursuant to Section 7-1-6.4, 7-1-6.36 or 7-1-6.46 NMSA 1978;

(2) any transfer to a municipality with respect to any local option gross receipts tax imposed by that municipality;

(3) any transfer to a county with respect to any local option gross receipts tax imposed by that county;

(4) any distribution to a county pursuant to Section 7-1-6.16 or 7-1-6.47 NMSA 1978;

(5) any distribution to a municipality or a county of gasoline taxes pursuant to Section 7-1-6.9 NMSA 1978;

(6) any transfer to a county with respect to any tax imposed in accordance with the Local Liquor Excise Tax Act;

(7) any distribution to a county from the county government road fund pursuant to Section 7-1-6.26 NMSA 1978;

(8) any distribution to a municipality of gasoline taxes pursuant to Section 7-1-6.27 NMSA 1978; [and]

(9) any distribution to a municipality of compensating taxes pursuant to Section 7-1-6.55 NMSA 1978; and

(10) any distribution to a municipality or county pursuant to Section 4 of this 2017 act.

B. Before making a distribution or transfer specified in Subsection A of this section to a municipality or county for the month, amounts comprising the net receipts shall be segregated into two mutually exclusive categories. One category shall be for amounts relating to the current month, and the other category shall be for amounts relating to prior periods. The total of each category for a municipality or county shall be reported each month to that municipality or county. If the total of the amounts relating to prior periods is less than zero and its absolute value exceeds the greater of one hundred dollars ($100) or an amount equal to twenty percent of the average distribution or transfer amount for that municipality or county, then the following procedures shall be carried out:

(1) all negative amounts relating to any period prior to the three calendar years preceding the year of the current month, net of any positive amounts in that same time period for the same taxpayers to which the negative amounts pertain, shall be excluded from the total relating to prior periods. Except as provided in Paragraph (2) of this subsection, the net receipts to be distributed or transferred to the municipality or county shall be adjusted to equal the amount for the current month plus the revised total for prior periods; and

(2) if the revised total for prior periods determined pursuant to Paragraph (1) of this subsection is negative and its absolute value exceeds the greater of one hundred dollars ($100) or an amount equal to twenty percent of the average distribution or transfer amount for that municipality or county, the revised total for prior periods shall be excluded from the distribution or transfers and the net receipts to be distributed or transferred to the municipality or county shall be equal to the amount for the current month.

C. The department shall recover from a municipality or county the amount excluded by Paragraph (2) of Subsection B of this section. This amount may be referred to as the "recoverable amount".

D. Prior to or concurrently with the distribution or transfer to the municipality or county of the adjusted net receipts, the department shall notify the municipality or county whose distribution or transfer has been adjusted pursuant to Paragraph (2) of Subsection B of this section:

(1) that the department has made such an adjustment, that the department has determined that a specified amount is recoverable from the municipality or county and that the department intends to recover that amount from future distributions or transfers to the municipality or county;

(2) that the municipality or county has ninety days from the date notice is made to enter into a mutually agreeable repayment agreement with the department;

(3) that if the municipality or county takes no action within the ninety-day period, the department will recover the amount from the next six distributions or transfers following the expiration of the ninety days; and

(4) that the municipality or county may inspect, pursuant to Section 7-1-8.9 NMSA 1978, an application for a claim for refund that gave rise to the recoverable amount, exclusive of any amended returns that may be attached to the application.

E. No earlier than ninety days from the date notice pursuant to Subsection D of this section is given, the department shall begin recovering the recoverable amount from a municipality or county as follows:

(1) the department may collect the recoverable amount by:

(a) decreasing distributions or transfers to the municipality or county in accordance with a repayment agreement entered into with the municipality or county; or

(b) except as provided in Paragraphs (2) and (3) of this subsection, if the municipality or county fails to act within the ninety days, decreasing the amount of the next six distributions or transfers to the municipality or county following expiration of the ninety-day period in increments as nearly equal as practicable and sufficient to recover the amount;

(2) if, pursuant to Subsection B of this section, the secretary determines that the recoverable amount is more than fifty percent of the average distribution or transfer of net receipts for that municipality or county, the secretary:

(a) shall recover only up to fifty percent of the average distribution or transfer of net receipts for that municipality or county; and

(b) may, in the secretary's discretion, waive recovery of any portion of the recoverable amount, subject to approval by the state board of finance; and

(3) if, after application of a refund claim, audit adjustment, correction of a mistake by the department or other adjustment of a prior period, but prior to any recovery of the department pursuant to this section, the total net receipts of a municipality or county for the twelve-month period beginning with the current month are reduced or are projected to be reduced to less than fifty percent of the average distribution or transfer of net receipts, the secretary may waive recovery of any portion of the recoverable amount, subject to approval by the state board of finance.

F. No later than ninety days from the date notice pursuant to Subsection D of this section is given, the department shall provide the municipality or county adequate opportunity to review an application for a claim for refund that gave rise to the recoverable amount, exclusive of any amended returns that may be attached to the application, pursuant to Section 7-1-8.9 NMSA 1978.

G. On or before September 1 of each year beginning in 2016, the secretary shall report to the state board of finance and the legislative finance committee the total recoverable amount waived pursuant to Subparagraph (b) of Paragraph (2) and Paragraph (3) of Subsection E of this section for each municipality and county in the prior fiscal year.

H. The secretary is authorized to decrease a distribution or transfer to a municipality or county upon being directed to do so by the secretary of finance and administration pursuant to the State Aid Intercept Act or to redirect a distribution or transfer to the New Mexico finance authority pursuant to an ordinance or a resolution passed by the county or municipality and a written agreement of the municipality or county and the New Mexico finance authority. Upon direction to decrease a distribution or transfer or notice to redirect a distribution or transfer to a municipality or county, the secretary shall decrease or redirect the next designated distribution or transfer, and succeeding distributions or transfers as necessary, by the amount of the state distributions intercept authorized by the secretary of finance and administration pursuant to the State Aid Intercept Act or by the amount of the state distribution intercept authorized pursuant to an ordinance or a resolution passed by the county or municipality and a written agreement with the New Mexico finance authority. The secretary shall transfer the state distributions intercept amount to the municipal or county treasurer or other person designated by the secretary of finance and administration or to the New Mexico finance authority pursuant to written agreement to pay the debt service to avoid default on qualified local revenue bonds or meet other local revenue bond, loan or other debt obligations of the municipality or county to the New Mexico finance authority. A decrease to or redirection of a distribution or transfer pursuant to this subsection that arose:

(1) prior to an adjustment of a distribution or transfer of net receipts creating a recoverable amount owed to the department takes precedence over any collection of any recoverable amount pursuant to Paragraph (2) of Subsection B of this section, which may be made only from the net amount of the distribution or transfer remaining after application of the decrease or redirection pursuant to this subsection; and

(2) after an adjustment of a distribution or transfer of net receipts creating a recoverable amount owed to the department shall be subordinate to any collection of any recoverable amount pursuant to Paragraph (2) of Subsection B of this section.

I. Upon the direction of the secretary of finance and administration pursuant to Section 9-6-5.2 NMSA 1978, the secretary shall temporarily withhold the balance of a distribution to a municipality or county, net of any decrease or redirected amount pursuant to Subsection H of this section and any recoverable amount pursuant to Paragraph (2) of Subsection B of this section, that has failed to submit an audit report required by the Audit Act or a financial report required by Subsection F of Section 6-6-2 NMSA 1978. The amount to be withheld, the source of the withheld distribution and the number of months that the distribution is to be withheld shall be as directed by the secretary of finance and administration. A distribution withheld pursuant to this subsection shall remain in the tax administration suspense fund until distributed to the municipality or county and shall not be distributed to the general fund. An amount withheld pursuant to this subsection shall be distributed to the municipality or county upon direction of the secretary of finance and administration.

J. As used in this section:

(1) "amounts relating to the current month" means any amounts included in the net receipts of the current month that represent payment of tax due for the current month, correction of amounts processed in the current month that relate to the current month or that otherwise relate to obligations due for the current month;

(2) "amounts relating to prior periods" means any amounts processed during the current month that adjust amounts processed in a period or periods prior to the current month regardless of whether the adjustment is a correction of a department error or due to the filing of amended returns, payment of department-issued assessments, filing or approval of claims for refund, audit adjustments or other cause;

(3) "average distribution or transfer amount" means the following amounts; provided that a distribution or transfer that is negative shall not be used in calculating the amounts:

(a) the annual average of the total amount distributed or transferred to a municipality or county in each of the three twelve-month periods preceding the current month;

(b) if a distribution or transfer to a municipality or county has been made for less than three years, the total amount distributed or transferred in the year preceding the current month; or

(c) if a municipality or county has not received distributions or transfers of net receipts for twelve or more months, the monthly average of net receipts distributed or transferred to the municipality or county preceding the current month multiplied by twelve;

(4) "current month" means the month for which the distribution or transfer is being prepared; and

(5) "repayment agreement" means an agreement between the department and a municipality or county under which the municipality or county agrees to allow the department to recover an amount determined pursuant to Paragraph (2) of Subsection B of this section by decreasing distributions or transfers to the municipality or county for one or more months beginning with the distribution or transfer to be made with respect to a designated month. No interest shall be charged."

SECTION 3. 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 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 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 [plus five percent of the total amount of deductions claimed pursuant to Section 7-9-92 NMSA 1978 for the month plus five percent of the total amount of deductions claimed pursuant to Section 7-9-93 NMSA 1978 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 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 4. A new section of the Tax Administration Act is enacted to read:

"[NEW MATERIAL] DISTRIBUTION--GROSS RECEIPTS TAX ON FOOD AND GROSS RECEIPTS TAX ON HEALTH CARE PRACTITIONER SERVICES--MUNICIPALITIES AND COUNTIES.--

A. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to each municipality in an amount equal to eighty-six and sixty-seven hundredths percent of the net receipts attributable to the gross receipts tax on food sold in the municipality.

B. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to each county in an amount equal to thirteen and thirty-three hundredths percent of the net receipts attributable to the gross receipts tax on food sold in that portion of a county that is located inside the boundaries of a municipality.

C. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to each county in an amount equal to the net receipts attributable to the gross receipts tax on food sold in that portion of a county located outside the boundaries of a municipality.

D. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to each municipality in an amount equal to eighty-seven and one-half percent of the net receipts attributable to the gross receipts tax on health care practitioner services sold in the municipality.

E. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to each county in an amount equal to twelve and one-half percent of the net receipts attributable to the gross receipts tax on health care practitioner services sold in that portion of a county that is located inside the boundaries of a municipality.

F. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to each county in an amount equal to the net receipts attributable to the gross receipts tax on health care practitioner services sold in that portion of a county located outside the boundaries of any municipality.

G. The distribution amounts made pursuant to this section shall be subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978.

H. The department may withhold an administrative fee of three percent of the net amount to be distributed pursuant to this section."

SECTION 5. Section 7-2-2 NMSA 1978 (being Laws 1986, Chapter 20, Section 26, as amended) is amended to read:

"7-2-2. DEFINITIONS.--For the purpose of the Income Tax Act and unless the context requires otherwise:

A. "adjusted gross income" means adjusted gross income as defined in Section 62 of the Internal Revenue Code, as that section may be amended or renumbered;

B. "base income":

(1) means, for estates and trusts, that part of the estate's or trust's income defined as taxable income and upon which the federal income tax is calculated in the Internal Revenue Code for income tax purposes plus, for taxable years beginning on or after January 1, 1991, the amount of the net operating loss deduction allowed by Section 172(a) of the Internal Revenue Code, as that section may be amended or renumbered, and taken by the taxpayer for that year;

(2) means, for taxpayers other than estates or trusts, that part of the taxpayer's income defined as adjusted gross income plus, for taxable years beginning on or after January 1, 1991, the amount of the net operating loss deduction allowed by Section 172(a) of the Internal Revenue Code, as that section may be amended or renumbered, and taken by the taxpayer for that year;

(3) includes, for all taxpayers, any other income of the taxpayer not included in adjusted gross income but upon which a federal tax is calculated pursuant to the Internal Revenue Code for income tax purposes, except amounts for which a calculation of tax is made pursuant to Section 55 of the Internal Revenue Code, as that section may be amended or renumbered; "base income" also includes interest received on a state or local bond; and

(4) includes, for all taxpayers, an amount deducted pursuant to Section 7-2-32 NMSA 1978 in a prior taxable year if:

(a) such amount is transferred to another qualified tuition program, as defined in Section 529 of the Internal Revenue Code, not authorized in the Education Trust Act; or

(b) a distribution or refund is made for any reason other than: 1) to pay for qualified higher education expenses, as defined pursuant to Section 529 of the Internal Revenue Code; or 2) upon the beneficiary's death, disability or receipt of a scholarship;

C. "compensation" means wages, salaries, commissions and any other form of remuneration paid to employees for personal services;

D. "department" means the taxation and revenue department, the secretary or any employee of the department exercising authority lawfully delegated to that employee by the secretary;

E. "fiduciary" means a guardian, trustee, executor, administrator, committee, conservator, receiver, individual or corporation acting in any fiduciary capacity;

F. "filing status" means "married filing joint returns", "married filing separate returns", "head of household", "surviving spouse" and "single", as those terms are generally defined for federal tax purposes;

G. "fiscal year" means any accounting period of twelve months ending on the last day of any month other than December;

H. "head of household" means "head of household" as generally defined for federal income tax purposes;

I. "individual" means a natural person, an estate, a trust or a fiduciary acting for a natural person, trust or estate;

J. "Internal Revenue Code" means the United States Internal Revenue Code of 1986, as amended;

K. "lump-sum amount" means, for the purpose of determining liability for federal income tax, an amount that was not included in adjusted gross income but upon which the five-year-averaging or the ten-year-averaging method of tax computation provided in Section 402 of the Internal Revenue Code, as that section may be amended or renumbered, was applied;

L. "modified gross income" means all income of the taxpayer and, if any, the taxpayer's spouse and dependents, undiminished by losses and from whatever source, including:

(1) compensation;

(2) net profit from business;

(3) gains from dealings in property;

(4) interest, except of a taxpayer and the taxpayer's spouse that are over the age of fifty-five;

(5) net rents;

(6) royalties;

(7) dividends, except of a taxpayer and the taxpayer's spouse that are both over the age of fifty-five;

(8) alimony and separate maintenance payments;

(9) annuities;

(10) income from life insurance and endowment contracts;

(11) pensions;

(12) discharge of indebtedness;

(13) distributive share of partnership income;

(14) income in respect of a decedent;

(15) income from an interest in an estate or a trust;

(16) social security benefits;

(17) unemployment compensation benefits;

(18) workers' compensation benefits;

(19) public assistance and welfare benefits;

(20) cost-of-living allowances; and

(21) gifts;

M. "modified gross income" excludes:

(1) payments for hospital, dental, medical or drug expenses to or on behalf of the taxpayer;

(2) the value of room and board provided by federal, state or local governments or by private individuals or agencies based upon financial need and not as a form of compensation;

(3) payments pursuant to a federal, state or local government program directly or indirectly to a third party on behalf of the taxpayer when identified to a particular use or invoice by the payer; or

(4) payments for credits and rebates pursuant to the Income Tax Act and made for a credit pursuant to Section 7-3-9 NMSA 1978;

N. "net income" means, for estates and trusts, base income adjusted to exclude amounts that the state is prohibited from taxing because of the laws or constitution of this state or the United States and means, for taxpayers other than estates or trusts, base income adjusted to exclude:

(1) an amount equal to the standard deduction allowed the taxpayer for the taxpayer's taxable year by Section 63 of the Internal Revenue Code, as that section may be amended or renumbered;

(2) an amount equal to the itemized deductions defined in Section 63 of the Internal Revenue Code, as that section may be amended or renumbered, allowed the taxpayer for the taxpayer's taxable year less the amount excluded pursuant to Paragraph (1) of this subsection and less the amount of state and local income and sales taxes included in the taxpayer's itemized deductions;

(3) an amount equal to the product of the exemption amount allowed for the taxpayer's taxable year by Section 151 of the Internal Revenue Code, as that section may be amended or renumbered, multiplied by the number of personal exemptions allowed for federal income tax purposes;

(4) income from obligations of the United States of America less expenses incurred to earn that income;

(5) other amounts that the state is prohibited from taxing because of the laws or constitution of this state or the United States;

(6) for taxable years that began prior to January 1, 1991, an amount equal to the sum of:

(a) net operating loss carryback deductions to that year from taxable years beginning prior to January 1, 1991 claimed and allowed, as provided by the Internal Revenue Code; and

(b) net operating loss carryover deductions to that year claimed and allowed;

(7) for taxable years beginning on or after January 1, 1991 and prior to January 1, 2013, an amount equal to the sum of any net operating loss carryover deductions to that year claimed and allowed; provided that the amount of any net operating loss carryover from a taxable year beginning on or after January 1, 1991 and prior to January 1, 2013 may be excluded only as follows:

(a) in the case of a timely filed return, in the taxable year immediately following the taxable year for which the return is filed; or

(b) in the case of amended returns or original returns not timely filed, in the first taxable year beginning after the date on which the return or amended return establishing the net operating loss is filed; and

(c) in either case, if the net operating loss carryover exceeds the amount of net income exclusive of the net operating loss carryover for the taxable year to which the exclusion first applies, in the next four succeeding taxable years in turn until the net operating loss carryover is exhausted for any net operating loss carryover from a taxable year prior to January 1, 2013; in no event shall a net operating loss carryover from a taxable year beginning prior to January 1, 2013 be excluded in any taxable year after the fourth taxable year beginning after the taxable year to which the exclusion first applies;

(8) for taxable years beginning on or after January 1, 2013, an amount equal to the sum of any net operating loss carryover deductions to that year claimed and allowed; provided that the amount of any net operating loss carryover may be excluded only as follows:

(a) in the case of a timely filed return, in the taxable year immediately following the taxable year for which the return is filed; or

(c) in either case, if the net operating loss carryover exceeds the amount of net income exclusive of the net operating loss carryover for the taxable year to which the exclusion first applies, in the next nineteen succeeding taxable years in turn until the net operating loss carryover is exhausted for any net operating loss carryover from a taxable year beginning on or after January 1, 2013; in no event shall a net operating loss carryover from a taxable year beginning: 1) prior to January 1, 2013 be excluded in any taxable year after the fourth taxable year beginning after the taxable year to which the exclusion first applies; and 2) on or after January 1, 2013 be excluded in any taxable year after the nineteenth taxable year beginning after the taxable year to which the exclusion first applies; and

(9) for taxable years beginning on or after January 1, 2011, an amount equal to the amount included in adjusted gross income that represents a refund of state and local income and sales taxes that were deducted for federal tax purposes in taxable years beginning on or after January 1, 2010;

O. "net operating loss" means any net operating loss, as defined by Section 172(c) of the Internal Revenue Code, as that section may be amended or renumbered, for a taxable year as further increased by the income, if any, from obligations of the United States for that year less related expenses;

P. "net operating loss carryover" means the amount, or any portion of the amount, of a net operating loss for any taxable year that, pursuant to Paragraph (6), (7) or (8) of Subsection N of this section, may be excluded from base income;

Q. "nonresident" means every individual not a resident of this state;

R. "person" means any individual, estate, trust, receiver, cooperative association, club, corporation, company, firm, partnership, limited liability company, joint venture, syndicate or other association; "person" also means, to the extent permitted by law, any federal, state or other governmental unit or subdivision or agency, department or instrumentality thereof;

S. "resident" means an individual who is domiciled in this state during any part of the taxable year or an individual who is physically present in this state for one hundred eighty-five days or more during the taxable year; but any individual, other than someone who was physically present in the state for one hundred eighty-five days or more during the taxable year, who, on or before the last day of the taxable year, changed the individual's place of abode to a place without this state with the bona fide intention of continuing actually to abide permanently without this state is not a resident for the purposes of the Income Tax Act for periods after that change of abode;

T. "secretary" means the secretary of taxation and revenue or the secretary's delegate;

U. "state" means any state of the United States, the District of Columbia, the commonwealth of Puerto Rico, any territory or possession of the United States or any political subdivision of a foreign country;

V. "state or local bond" means a bond issued by a state other than New Mexico or by a local government other than one of New Mexico's political subdivisions, the interest from which is excluded from income for federal income tax purposes under Section 103 of the Internal Revenue Code, as that section may be amended or renumbered;

W. "surviving spouse" means "surviving spouse" as generally defined for federal income tax purposes;

X. "taxable income" means net income less any lump-sum amount;

Y. "taxable year" means the calendar year or fiscal year upon the basis of which the net income is computed under the Income Tax Act and includes, in the case of the return made for a fractional part of a year under the provisions of the Income Tax Act, the period for which the return is made; and

Z. "taxpayer" means any individual subject to the tax imposed by the Income Tax Act."

SECTION 6. Section 7-2-18.10 NMSA 1978 (being Laws 2003, Chapter 331, Section 7, as amended) is amended to read:

"7-2-18.10. TAX CREDIT--CERTAIN CONVEYANCES OF REAL PROPERTY.--

A. There shall be allowed as a credit against the tax liability imposed by the Income Tax Act an amount equal to fifty percent of the fair market value of land or interest in land that is conveyed for the purpose of open space, natural resource or biodiversity conservation, agricultural preservation or watershed or historic preservation as an unconditional donation in perpetuity by the landowner or taxpayer to a public or private conservation agency eligible to hold the land and interests therein for conservation or preservation purposes. The fair market value of qualified donations made pursuant to this section shall be substantiated by a "qualified appraisal" prepared by a "qualified appraiser", as those terms are defined under applicable federal laws and regulations governing charitable contributions.

B. The amount of the credit that may be claimed by a taxpayer shall not exceed one hundred thousand dollars ($100,000) for a conveyance [made prior to January 1, 2008 and shall not exceed two hundred fifty thousand dollars ($250,000) for a conveyance made on or after that date]. In addition, in a taxable year, the credit used may not exceed the amount of individual income tax otherwise due. A portion of the credit that is unused in a taxable year may be carried over for a maximum of twenty consecutive taxable years following the taxable year in which the credit originated until fully expended. A taxpayer may claim only one tax credit per taxable year.

C. Qualified donations shall include the conveyance in perpetuity of a fee interest in real property or a less-than-fee interest in real property, such as a conservation restriction, preservation restriction, agricultural preservation restriction or watershed preservation restriction, pursuant to the Land Use Easement Act and provided that the less-than-fee interest qualifies as a charitable contribution deduction under Section 170(h) of the Internal Revenue Code. Dedications of land for open space for the purpose of fulfilling density requirements to obtain subdivision or building permits shall not be considered as qualified donations pursuant to the Land Conservation Incentives Act.

D. Qualified donations shall be eligible for the tax credit if the donations are made to the state of New Mexico, a political subdivision thereof or a charitable organization described in Section 501(c)(3) of the Internal Revenue Code and that meets the requirements of Section 170(h)(3) of that code.

E. To be eligible for treatment as qualified donations under this section, land or interests in lands must be certified by the secretary of energy, minerals and natural resources as fulfilling the purposes as set forth in Section

75-9-2 NMSA 1978. The use and protection of the lands, or interests therein, for open space, natural area protection, biodiversity habitat conservation, land preservation, agricultural preservation, historic preservation or similar use or purpose of the property shall be assured in perpetuity.

F. A taxpayer may apply for certification of eligibility for the tax credit provided by this section from the energy, minerals and natural resources department. If the energy, minerals and natural resources department determines that the application meets the requirements of this section and that the property conveyed will not adversely affect the property rights of contiguous landowners, it shall issue a certificate of eligibility to the taxpayer, which shall include a calculation of the maximum amount of tax credit for which the taxpayer would be eligible. The energy, minerals and natural resources department may issue rules governing the procedure for administering the provisions of this subsection.

G. To receive a credit pursuant to this section, a person shall apply to the taxation and revenue department on forms and in the manner prescribed by the department. The application shall include a certificate of eligibility issued by the energy, minerals and natural resources department pursuant to Subsection F of this section. If all of the requirements of this section have been complied with, the taxation and revenue department shall issue to the applicant a document granting the tax credit. The document shall be numbered for identification and declare its date of issuance and the amount of the tax credit allowed for the qualified donation made pursuant to this section.

H. The tax credit represented by a document issued pursuant to Subsection G of this section for a conveyance made on or after January 1, 2008, or an increment of that tax credit, may be sold, exchanged or otherwise transferred and may be carried forward for a period of twenty taxable years following the taxable year in which the credit originated until fully expended. A tax credit or increment of a tax credit may only be transferred once. The credit may be transferred to any taxpayer. A taxpayer to whom a credit has been transferred may use the credit for the taxable year in which the transfer occurred and unused amounts may be carried forward to succeeding taxable years, but in no event may the transferred credit be used more than twenty years after it was originally issued.

I. A tax credit issued pursuant to this section shall be transferred through a qualified intermediary. The qualified intermediary shall, by means of a sworn notarized statement, notify the taxation and revenue department of the transfer and of the date of the transfer within ten days of the transfer. Credits shall only be transferred in increments of ten thousand dollars ($10,000) or more. The qualified intermediary shall keep an account of the credits and have the authority to issue sub-numbers registered with the taxation and revenue department and traceable to the original credit.

J. If a charitable deduction is claimed on the taxpayer's federal income tax for any contribution for which the credit provided by this section is claimed, the taxpayer's itemized deductions for New Mexico income tax shall be reduced by the amount of the deduction for the contribution in order to determine the New Mexico taxable income of the taxpayer.

K. For the purposes of this section:

(1) "qualified intermediary" does not include a person who has been previously convicted of a felony, who has had a professional license revoked, who is engaged in the practice defined in Section 61-28B-3 NMSA 1978 and who is identified in Section 61-29-2 NMSA 1978, and does not include any entity owned wholly or in part or employing any of the foregoing persons; and

(2) "taxpayer" means a citizen or resident of the United States, a domestic partnership, a limited liability company, a domestic corporation, an estate, including a foreign estate, or a trust."

SECTION 7. Section 7-2-18.15 NMSA 1978 (being Laws 2007, Chapter 45, Section 9, as amended) is amended to read:

"7-2-18.15. WORKING FAMILIES TAX CREDIT.--

A. A resident who files an individual New Mexico income tax return may claim a credit in an amount equal to [ten] eleven and one-half percent of the federal income tax credit for which that individual is eligible for the same taxable year pursuant to Section 32 of the Internal Revenue Code. The credit provided in this section may be referred to as the "working families tax credit".

B. The working families tax credit may be deducted from the income tax liability of an individual who claims the credit and qualifies for the credit pursuant to this section. If the credit exceeds the individual's income tax liability for the taxable year, the excess shall be refunded to the individual."

SECTION 8. Section 7-2-18.22 NMSA 1978 (being Laws 2007, Chapter 361, Section 2) is amended to read:

"7-2-18.22. [TAX CREDIT] RURAL HEALTH CARE PRACTITIONER TAX CREDIT.--

A. A taxpayer who files an individual New Mexico tax return, who is not a dependent of another individual, who is an eligible health care practitioner and who has provided health care services in New Mexico in a rural health care underserved area in a taxable year may claim a credit against the tax liability imposed by the Income Tax Act. The credit provided in this section may be referred to as the "rural health care practitioner tax credit".

B. The rural health care practitioner tax credit may be claimed and allowed in an amount that shall not exceed [five thousand dollars ($5,000)] two thousand dollars ($2,000) for all eligible physicians, osteopathic physicians, dentists, clinical psychologists, podiatrists and optometrists who qualify pursuant to the provisions of this section, except the credit shall not exceed [three thousand dollars ($3,000)] two thousand dollars ($2,000) for all eligible dental hygienists, physician assistants, certified nurse-midwives, certified registered nurse anesthetists, certified nurse practitioners and clinical nurse specialists.

C. To qualify for the rural health care practitioner tax credit, an eligible health care practitioner shall have provided health care during a taxable year for at least two thousand eighty hours at a practice site located in an approved, rural health care underserved area. An eligible rural health care practitioner who provided health care services for at least one thousand forty hours but less than two thousand eighty hours at a practice site located in an approved rural health care underserved area during a taxable year is eligible for one-half of the credit amount.

D. Before an eligible health care practitioner may claim the rural health care practitioner tax credit, the practitioner shall submit an application to the department of health that describes the practitioner's clinical practice and contains additional information that the department of health may require. The department of health shall determine whether an eligible health care practitioner qualifies for the rural health care practitioner tax credit and shall issue a certificate to each qualifying eligible health care practitioner. The department of health shall provide the taxation and revenue department appropriate information for all eligible health care practitioners to whom certificates are issued.

E. A taxpayer claiming the credit provided by this section shall submit a copy of the certificate issued by the department of health with the taxpayer's New Mexico income tax return for the taxable year. If the amount of the credit claimed exceeds a taxpayer's tax liability for the taxable year in which the credit is being claimed, the excess may be carried forward for three consecutive taxable years.

F. As used in this section:

(1) "eligible health care practitioner" means:

(a) a certified nurse-midwife licensed by the board of nursing as a registered nurse and licensed by the public health division of the department of health to practice nurse-midwifery as a certified nurse-midwife;

(b) a dentist or dental hygienist licensed pursuant to the Dental Health Care Act;

(d) an osteopathic physician [licensed pursuant to the provisions of Chapter 61, Article 10 NMSA 1978] or an osteopathic physician assistant licensed pursuant to the provisions of the Osteopathic [Physicians' Assistants] Medicine Act;

(e) a physician or physician assistant licensed pursuant to the provisions of [Chapter 61, Article 6 NMSA 1978] the Medical Practice Act;

(f) a podiatrist licensed pursuant to the provisions of the Podiatry Act;

(g) a clinical psychologist licensed pursuant to the provisions of the Professional Psychologist Act; and

(h) a registered nurse in advanced practice who has been prepared through additional formal education as provided in Sections 61-3-23.2 through 61-3-23.4 NMSA 1978 to function beyond the scope of practice of professional registered nursing, including certified nurse practitioners, certified registered nurse anesthetists and clinical nurse specialists;

(2) "health care underserved area" means a geographic area or practice location in which it has been determined by the department of health, through the use of indices and other standards set by the department of health, that sufficient health care services are not being provided;

(3) "practice site" means a private practice, public health clinic, hospital, public or private nonprofit primary care clinic or other health care service location in a health care underserved area; and

(4) "rural" means an area or location identified by the department of health as falling outside of an urban area."

SECTION 9. Section 7-2-18.28 NMSA 1978 (being Laws 2012, Chapter 55, Section 1) is amended to read:

"7-2-18.28. VETERAN EMPLOYMENT TAX CREDIT.--

A. A taxpayer who is not a dependent of another individual and who employs a qualified military veteran in New Mexico is eligible for a credit against the taxpayer's tax liability imposed pursuant to the Income Tax Act in an amount up to [one thousand dollars ($1,000)] five thousand dollars ($5,000) of the gross wages paid to each qualified military veteran by the taxpayer during the taxable year for which the return is filed. A taxpayer who employs a qualified military veteran for less than the full taxable year is eligible for a credit amount equal to [one thousand dollars ($1,000)] five thousand dollars ($5,000) multiplied by the fraction of a full year for which the qualified military veteran was employed. The tax credit provided by this section may be referred to as the "veteran employment tax credit".

B. The purpose of the veteran employment tax credit is to encourage the full-time employment of qualified military veterans within two years of discharge from the armed forces of the United States.

C. A taxpayer may claim the veteran employment tax credit provided in this section for each taxable year in which the taxpayer employs one or more qualified military veterans; provided that the taxpayer may not claim the veteran employment tax credit for any individual qualified military veteran for more than one calendar year from the date of hire.

D. That portion of a veteran employment tax credit approved by the department that exceeds a taxpayer's income tax liability in the taxable year in which the veteran employment tax credit is claimed shall not be refunded to the taxpayer but may be carried forward for up to three years. The veteran employment tax credit shall not be transferred to another taxpayer.

E. [A husband and wife] Married individuals filing separate returns for a taxable year for which they could have filed a joint return may each claim only one-half of the veteran employment tax credit that would have been claimed on a joint return.

F. A taxpayer may be allocated the right to claim a veteran employment tax credit in proportion to its ownership interest if the taxpayer owns an interest in a business entity that is taxed for federal income tax purposes as a partnership and that business entity has met all of the requirements to be eligible for the credit. The total credit claimed by all members of the partnership or limited liability company shall not exceed the allowable credit pursuant to Subsection A of this section.

G. The taxpayer shall submit to the department with respect to each employee for whom the veteran employment tax credit is claimed information required by the department with respect to the veteran's employment by the taxpayer during the taxable year for which the veteran employment tax credit is claimed, including information establishing that the employee is a qualified military veteran that can be used to determine that the employee was not also employed in the same taxable year by another taxpayer claiming a veteran employment tax credit for that employee pursuant to this section or the Corporate Income and Franchise Tax Act.

H. The department shall adopt rules establishing procedures to certify qualified military veterans for purposes of obtaining a veteran employment tax credit. The rules shall ensure that not more than one veteran employment tax credit per qualified military veteran shall be allowed in a taxable year and that the credits allowed per qualified military veteran are limited to a maximum of one year's employment.

I. A taxpayer allowed a tax credit pursuant to this section shall report the amount of the credit to the department in a manner required by the department.

J. The department shall compile an annual report on the tax credit that shall include the number of taxpayers approved by the department to receive the credit, the aggregate amount of credits approved and any other information necessary to evaluate the effectiveness of the credit. By December 15 of each year, the department shall compile and present the annual reports to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of whether the tax credit is performing the purpose for which it was created.

[I.] K. As used in this section, "qualified military veteran" means an individual who is hired within two years of receipt of an honorable discharge from a branch of the United States military, who works at least forty hours per week during the taxable year for which the veteran employment tax credit is claimed and who was not previously employed by the taxpayer prior to the individual's deployment."

SECTION 10. Section 7-2A-5 NMSA 1978 (being Laws 1981, Chapter 37, Section 38, as amended) is amended to read:

"7-2A-5. CORPORATE INCOME TAX RATES.--The corporate income tax imposed on corporations by Section 7-2A-3 NMSA 1978 shall be at the rates specified in the following tables:

A. For taxable years beginning prior to January 1, 2014:

If the net income is: The tax shall be:

Not over $500,000 4.8% of net income

Over $500,000 but not

over $1,000,000 $24,000 plus

6.4% of excess

over $500,000

Over $1,000,000 $56,000

plus 7.6% of excess over $1,000,000.

B. For taxable years beginning on or after January 1, 2014 and prior to January 1, 2015:

If the net income is: The tax shall be:

Not over $500,000 4.8% of net income

Over $500,000 but not

over $1,000,000 $24,000 plus

6.4% of excess

over $500,000

Over $1,000,000 $56,000

plus 7.3% of excess over $1,000,000.

C. For taxable years beginning on or after January 1, 2015 and prior to January 1, 2016:

If the net income is: The tax shall be:

Not over $500,000 4.8% of net income

Over $500,000 but not

over $1,000,000 $24,000 plus

6.4% of excess

over $500,000

Over $1,000,000 $56,000

plus 6.9% of excess over $1,000,000.

D. For taxable years beginning on or after January 1, 2016 and prior to January 1, 2017:

If the net income is: The tax shall be:

Not over $500,000 4.8% of net income

Over $500,000 but not

over $1,000,000 $24,000 plus

6.4% of excess

over $500,000

Over $1,000,000 $56,000

plus 6.6% of excess

over $1,000,000.

E. For taxable years beginning on or after January 1, 2017 and prior to January 1, 2018:

If the net income is: The tax shall be:

Not over $500,000 4.8% of net income

Over $500,000 $24,000 plus

6.2% of excess over $500,000.

F. For taxable years beginning on or after January 1, 2018,

[If the net income is: The tax shall be:

Not over $500,000 4.8% of net income

Over $500,000 $24,000 plus

5.9% of excess

over $500,000] the tax shall be three percent of net income."

SECTION 11. Section 7-2A-8.9 NMSA 1978 (being Laws 2003, Chapter 331, Section 8, as amended) is amended to read:

"7-2A-8.9. TAX CREDIT--CERTAIN CONVEYANCES OF REAL PROPERTY.--

A. There shall be allowed as a credit against the tax liability imposed by the Corporate Income and Franchise Tax Act an amount equal to fifty percent of the fair market value of land or interest in land that is conveyed for the purpose of open space, natural resource or biodiversity conservation, agricultural preservation or watershed or historic preservation as an unconditional donation in perpetuity by the landowner or taxpayer to a public or private conservation agency eligible to hold the land and interests therein for conservation or preservation purposes. The fair market value of qualified donations made pursuant to this section shall be substantiated by a "qualified appraisal" prepared by a "qualified appraiser", as those terms are defined under applicable federal laws and regulations governing charitable contributions.

B. The amount of the credit that may be claimed by a taxpayer shall not exceed one hundred thousand dollars ($100,000) for a conveyance [made prior to January 1, 2008 and shall not exceed two hundred fifty thousand dollars ($250,000) for a conveyance made on or after that date]. In addition, in a taxable year, the credit used may not exceed the amount of corporate income tax otherwise due. A portion of the credit that is unused in a taxable year may be carried over for a maximum of twenty consecutive taxable years following the taxable year in which the credit originated until fully expended. A taxpayer may claim only one tax credit per taxable year.

C. Qualified donations shall include the conveyance in perpetuity of a fee interest in real property or a less-than-fee interest in real property, such as a conservation restriction, preservation restriction, agricultural preservation restriction or watershed preservation restriction, pursuant to the Land Use Easement Act; provided that the less-than-fee interest qualifies as a charitable contribution deduction under Section 170(h) of the Internal Revenue Code. Dedications of land for open space for the purpose of fulfilling density requirements to obtain subdivision or building permits shall not be considered as qualified donations pursuant to the Land Conservation Incentives Act.

[5-9-2] 75-9-2 NMSA 1978. The use and protection of the lands, or interests therein, for open space, natural area protection, biodiversity habitat conservation, land preservation, agricultural preservation, historic preservation or similar use or purpose of the property shall be assured in perpetuity.

K. For the purposes of this section:

(2) "taxpayer" means a citizen or resident of the United States, a domestic partnership, a limited liability company, a domestic corporation, an estate, including a foreign estate, or a trust."

SECTION 12. Section 7-2A-27 NMSA 1978 (being Laws 2012, Chapter 55, Section 2) is amended to read:

"7-2A-27. VETERAN EMPLOYMENT TAX CREDIT.--

A. A taxpayer that employs a qualified military veteran in New Mexico is eligible for a credit against the taxpayer's tax liability imposed pursuant to the Corporate Income and Franchise Tax Act in an amount up to [one thousand dollars ($1,000)] five thousand dollars ($5,000) of the gross wages paid to each qualified military veteran by the taxpayer during the taxable year for which the return is filed. A taxpayer that employs a qualified military veteran for less than the full taxable year is eligible for a credit amount equal to [one thousand dollars ($1,000)] five thousand dollars ($5,000) multiplied by the fraction of a full year for which the qualified military veteran was employed. The tax credit provided by this section may be referred to as the "veteran employment tax credit".

B. The purpose of the veteran employment tax credit is to encourage the full-time employment of qualified military veterans within two years of discharge from the armed forces of the United States.

D. That portion of a veteran employment tax credit approved by the department that exceeds a taxpayer's corporate income tax liability in the taxable year in which the credit is claimed shall not be refunded to the taxpayer but may be carried forward for up to three years. The veteran employment tax credit shall not be transferred to another taxpayer.

E. The taxpayer shall submit to the department with respect to each employee for whom the veteran employment tax credit is claimed information required by the department with respect to the veteran's employment by the taxpayer during the taxable year for which the veteran employment tax credit is claimed, including information establishing that the employee is a qualified military veteran that can be used to determine that the employee was not also employed in the same taxable year by another taxpayer claiming a veteran employment tax credit for that employee pursuant to this section or the Income Tax Act.

F. The department shall adopt rules establishing procedures to certify qualified military veterans for purposes of obtaining a veteran employment tax credit. The rules shall ensure that not more than one veteran employment tax credit per qualified military veteran shall be allowed in a taxable year and that the credits allowed per qualified military veteran are limited to a maximum of one year's employment.

[G. The department shall compile an annual report for the revenue stabilization and tax policy committee and the legislative finance committee that sets forth the number of taxpayers approved to receive the veteran employment tax credit, the aggregate amount of credits approved and the average and median amounts of credits approved. The department shall advise those committees in 2015 whether the veteran employment tax credit is performing the purpose for which it was enacted.

H. Acceptance of the veteran employment tax credit is authorization to the department to reveal the amount of the tax credit claimed by the taxpayer and other information from the taxpayer's tax reports as needed to report fully as required by this section to the revenue stabilization and tax policy committee and the legislative finance committee.]

G. A taxpayer allowed a tax credit pursuant to this section shall report the amount of the credit to the department in a manner required by the department.

H. The department shall compile an annual report on the tax credit that shall include the number of taxpayers approved by the department to receive the credit, the aggregate amount of credits approved and any other information necessary to evaluate the effectiveness of the credit. By December 15 of each year, the department shall compile and present the annual reports to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of whether the tax credit is performing the purpose for which it was created.

I. As used in this section, "qualified military veteran" means an individual who is hired within two years of receipt of an honorable discharge from a branch of the United States military, who works at least forty hours per week during the taxable year for which the veteran employment tax credit is claimed and who was not previously employed by the taxpayer prior to the individual's deployment."

SECTION 13. [NEW MATERIAL] SHORT TITLE.--Sections 13 through 17 of this act may be cited as the "Gross Receipts Taxes on Food and Health Care Practitioner Services Act".

SECTION 14. [NEW MATERIAL] DEFINITIONS.--As used in the Gross Receipts Taxes on Food and Health Care Practitioner Services Act:

A. "engaging in business" means carrying on or causing to be carried on the selling of food at a retail food store or selling health care practitioner services with the purpose of direct or indirect benefit;

B. "food" means any food or food product for home consumption that meets the definition of food in 7 USCA 2012(k)(1) for purposes of the federal supplemental nutrition assistance program;

C. "food gross receipts" means the total amount of money or the value of other consideration received from selling food at a retail food store in New Mexico, or, if in an exchange in which the money or other consideration received does not represent the value of the food, "food gross receipts" means the reasonable value of the food. "Food gross receipts" excludes:

(1) cash discounts allowed and taken;

(2) food gross receipts tax payable on transactions for the reporting period;

(3) gross receipts tax payable pursuant to the Gross Receipts and Compensating Tax Act on transactions for the reporting period;

(4) taxes imposed pursuant to the provisions of any local option gross receipts tax, as that term is defined in the Tax Administration Act, that is payable for the reporting period;

(5) a time-price differential; and

(6) any gross receipts or sales taxes imposed by an Indian nation, tribe or pueblo; provided that the tax is approved, if approval is required by federal law or regulation, by the United States secretary of the interior; and provided further that the gross receipts or sales tax imposed by the Indian nation, tribe or pueblo provides a reciprocal exclusion from gross receipts, sales or gross receipts-based excise taxes imposed by the state or its political subdivisions;

D. "health care insurer" means a person that:

(1) has a valid certificate of authority in good standing pursuant to the New Mexico Insurance Code to act as an insurer, health maintenance organization or nonprofit health care plan or prepaid dental plan; and

(2) contracts to reimburse licensed health care practitioners for providing basic health services to enrollees at negotiated fee rates;

E. "health care practitioner" means:

(1) a chiropractic physician licensed pursuant to the provisions of the Chiropractic Physician Practice Act;

(2) a dentist or dental hygienist licensed pursuant to the provisions of Dental Health Care Act;

(3) a doctor of oriental medicine licensed pursuant to the provisions of the Acupuncture and Oriental Medicine Practice Act;

(4) an optometrist licensed pursuant to the provisions of the Optometry Act;

(5) an osteopathic physician or an osteopathic physician assistant licensed pursuant to the provisions of the Osteopathic Medicine Act;

(6) a physical therapist licensed pursuant to the provisions of the Physical Therapy Act;

(7) a physician or physician assistant licensed pursuant to the provisions of the Medical Practice Act;

(8) a podiatrist licensed pursuant to the provisions of the Podiatry Act;

(9) a psychologist licensed pursuant to the provisions of the Professional Psychologist Act;

(10) a registered lay midwife registered by the department of health;

(11) a registered nurse or licensed practical nurse licensed pursuant to the provisions of the Nursing Practice Act;

(12) an occupational therapist licensed pursuant to the provisions of the Occupational Therapy Act;

(13) a respiratory care practitioner licensed pursuant to the provisions of the Respiratory Care Act;

(14) a speech-language pathologist or audiologist licensed pursuant to the provisions of the Speech-Language Pathology, Audiology and Hearing Aid Dispensing Practices Act;

(15) a professional clinical mental health counselor, marriage and family therapist or professional art therapist licensed pursuant to the provisions of the Counseling and Therapy Practice Act who has obtained a master's degree or a doctorate;

(16) an independent social worker licensed pursuant to the provisions of the Social Work Practice Act; and

(17) a clinical laboratory that is accredited pursuant to 42 U.S.C. Section 263a but that is not a laboratory in a physician's office or in a hospital defined pursuant to 42 U.S.C. Section 1395x;

F. "health care practitioner services gross receipts" means the total amount of money or the value of other consideration received from selling health care practitioner services in New Mexico, or, if in an exchange in which the money or other consideration received does not represent the value of the services, "health care practitioner services gross receipts" means the reasonable value of the services. "Health care practitioner services gross receipts" excludes:

(1) cash discounts allowed and taken;

(2) health care practitioner services gross receipts tax payable on transactions for the reporting period;

(3) gross receipts tax payable pursuant to the Gross Receipts and Compensating Tax Act on transactions for the reporting period;

(4) taxes imposed pursuant to the provisions of any local option gross receipts tax, as that term is defined in the Tax Administration Act, that are payable for the reporting period;

(5) a time-price differential; and

G. "managed health care provider" means a person that provides for the delivery of comprehensive basic health care services and medically necessary services to individuals enrolled in a plan through its own employed health care providers or by contracting with selected or participating health care providers. "Managed health care provider" includes only those persons that provide comprehensive basic health care services to enrollees on a contract basis, including the following:

(1) health maintenance organizations;

(2) preferred provider organizations;

(3) individual practice associations;

(4) competitive medical plans;

(5) exclusive provider organizations;

(6) integrated delivery systems;

(7) independent physician-provider organizations;

(8) physician hospital-provider organizations; and

(9) managed care services organizations;

H. "medicare part C services" means services performed pursuant to a contract with a managed health care provider for medicare patients pursuant to Title 18 of the federal Social Security Act; and

I. "retail food store" means an establishment that sells food for home preparation and consumption and that meets the definition of retail food store in 7 USCA 2012(p)(1) for purposes of the federal supplemental nutrition assistance program, whether or not the establishment participates in the federal supplemental nutrition assistance program.

SECTION 15. [NEW MATERIAL] FOOD GROSS RECEIPTS TAX--HEALTH CARE PRACTITIONER SERVICES GROSS RECEIPTS TAX.--

A. For the privilege of engaging in business, an excise tax of three and seventy-five hundredths percent of gross receipts on the sale of food at a retail food store is imposed on any person engaging in business in New Mexico. The tax imposed by this subsection may be cited as the "food gross receipts tax".

B. For the privilege of engaging in business, an excise tax of two percent of gross receipts of the sale of services of a health care practitioner for commercial contract services or medicare part C services paid by a managed health care provider or health care insurer, if the services are within the scope of practice of the health care practitioner providing the service, is imposed on any person engaging in business in New Mexico. The tax imposed by this subsection may be cited as the "health care practitioner services gross receipts tax".

SECTION 16. [NEW MATERIAL] EXEMPTIONS.--Exempted from the food gross receipts tax and the health care practitioner services gross receipts tax are receipts that are exempt from the gross receipts tax pursuant to the Gross Receipts and Compensating Tax Act pursuant to Sections 7-9-13, 7-9-13.1, 7-9-18.1, 7-9-28, 7-9-29 and 7-9-41.3 NMSA 1978.

SECTION 17. [NEW MATERIAL] DATE PAYMENT DUE.--The taxes imposed by the Gross Receipts Taxes on Food and Health Care Practitioner Services Act are to be paid on or before the twenty-fifth day of the month following the month in which the taxable event occurs.

SECTION 18. Section 7-9-62 NMSA 1978 (being Laws 1969, Chapter 144, Section 52, as amended) is amended to read:

"7-9-62. DEDUCTION--GROSS RECEIPTS TAX--AGRICULTURAL IMPLEMENTS--AIRCRAFT MANUFACTURERS--VEHICLES THAT ARE NOT REQUIRED TO BE REGISTERED--AIRCRAFT PARTS AND MAINTENANCE SERVICES--REPORTING REQUIREMENTS.--

A. Except for receipts deductible under Subsection B of this section, [fifty] forty percent of the receipts from selling agricultural implements, farm tractors, aircraft or vehicles that are not required to be registered under the Motor Vehicle Code may be deducted from gross receipts; provided that, with respect to agricultural implements, the sale is made to a person who states in writing that the person is regularly engaged in the business of farming or ranching. Any deduction allowed under Section 7-9-71 NMSA 1978 must be taken before the deduction allowed by this subsection is computed.

B. Receipts of an aircraft manufacturer or affiliate from selling aircraft or from selling aircraft flight support, pilot training or maintenance training services may be deducted from gross receipts. Any deduction allowed under Section 7-9-71 NMSA 1978 must be taken before the deduction allowed by this subsection is computed.

C. Receipts from selling aircraft parts or maintenance services for aircraft or aircraft parts may be deducted from gross receipts. Any deduction allowed under Section 7-9-71 NMSA 1978 must be taken before the deduction allowed by this subsection is computed.

D. A taxpayer allowed a deduction pursuant to this section shall report the amount of the deduction separately in a manner required by the department.

E. The department shall compile an annual report on the deductions provided by this section that shall include the number of taxpayers approved by the department to receive the deductions, the aggregate amount of deductions approved and any other information necessary to evaluate the effectiveness of the deductions. Beginning in 2019 and every five years thereafter that the deductions are in effect, the department 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 deductions.

F. As used in this section:

(1) "affiliate" means a business entity that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with the aircraft manufacturer;

(2) "agricultural implement" means a tool, utensil or instrument that is depreciable for federal income tax purposes and that is:

(a) designed to irrigate agricultural crops above ground or below ground at the place where the crop is grown; or

(b) designed primarily for use with a source of motive power, such as a tractor, in planting, growing, cultivating, harvesting or processing agricultural crops at the place where the crop is grown; in raising poultry or livestock; or in obtaining or processing food or fiber, such as eggs, milk, wool or mohair, from living poultry or livestock at the place where the poultry or livestock are kept for this purpose;

(3) "aircraft manufacturer" means a business entity that in the ordinary course of business designs and builds private or commercial aircraft certified by the federal aviation administration;

(4) "business entity" means a corporation, limited liability company, partnership, limited partnership, limited liability partnership or real estate investment trust, but does not mean an individual or a joint venture;

(5) "control" means equity ownership in a business entity that:

(a) represents at least fifty percent of the total voting power of that business entity; and

(b) has a value equal to at least fifty percent of the total equity of that business entity; and

(6) "flight support" means providing navigation data, charts, weather information, online maintenance records and other aircraft or flight-related information and the software needed to access the information."

SECTION 19. Section 7-9-73.1 NMSA 1978 (being Laws 1991, Chapter 8, Section 3, as amended) is amended to read:

"7-9-73.1. DEDUCTION--GROSS RECEIPTS--HOSPITALS.--[Fifty] Forty percent of the receipts of hospitals licensed by the department of health may be deducted from gross receipts; provided that this deduction may be applied only to the taxable gross receipts remaining after all other appropriate deductions have been taken."

SECTION 20. Section 7-14-4 NMSA 1978 (being Laws 1988, Chapter 73, Section 14) is amended to read:

"7-14-4. DETERMINATION OF AMOUNT OF MOTOR VEHICLE EXCISE TAX.--

A. The rate of the motor vehicle excise tax [is three percent and is] shall be as follows and shall be applied to the price paid for the vehicle:

(1) prior to July 1, 2018, three percent;

(2) beginning July 1, 2018 and prior to July 1, 2020, three and one-half percent; and

(3) on and after July 1, 2020, four percent.

B. If the price paid does not represent the value of the vehicle in the condition that existed at the time it was acquired, the tax rate shall be applied to the reasonable value of the vehicle in such condition at such time. However, allowances granted for vehicle trade-ins may be deducted from the price paid or the reasonable value of the vehicle purchased."

SECTION 21. Section 7-14-10 NMSA 1978 (being Laws 1988, Chapter 73, Section 20, as amended) is amended to read:

"7-14-10. DISTRIBUTION OF PROCEEDS.--The receipts from the tax and any associated interest and penalties shall be deposited in the "motor vehicle suspense fund", hereby created in the state treasury. As of the end of each month, the net receipts attributable to the tax and associated penalties and interest shall be distributed as follows:

A. fifty percent to the state road fund; and

B. fifty percent to the general fund."

SECTION 22. [NEW MATERIAL] SHORT TITLE.--Sections 22 through 27 of this act may be cited as the "Recordation Tax Act".

SECTION 23. [NEW MATERIAL] RECORDATION TAX--TRANSFERS OF REAL PROPERTY.--

A. An excise tax is imposed on all instruments evidencing a transfer of any interest in real property. The rate of tax shall be twenty cents ($.20) on each one hundred dollars ($100) or fractional part thereof on the value of each instrument transferring the interest, which value shall be based on the prior year's assessed value of the real property being transferred.

B. In the event the prior year's assessed value of the real property being transferred is based on undeveloped land that has since been subdivided or otherwise developed, the county shall, upon request, assess the value of the real property since being developed and provide a statement of the value to the taxpayer.

C. A person who obtains more than one deed or other instrument of conveyance for the same transfer of the same tract or parcel of real property shall pay the tax imposed by this section only once with respect to that transfer.

D. The tax imposed by this section shall be paid by the grantee or transferee of the interest in the real property to the county clerk of the county in which the real property is located. If the instrument transfers a parcel of real property lying in two or more counties, the tax shall be paid to the county clerk of the county in which the greater part of the real property with respect to value lies. The county clerk shall not record the transfer until the tax has been paid.

E. The tax imposed by this section shall not be imposed on the transfer of:

(1) a leasehold estate; or

(2) real property where such transfer is:

(a) the creation or dissolution of a tenancy by the entirety the conveyance from: 1) one spouse to another; 2) one spouse or both spouses to the original grantor in the instrument or the original grantor's spouse; or 3) one spouse or both spouses to a trustee and immediate reconveyance by the trustee in the same instrument as tenants in common, tenants in common with right of survivorship, joint tenants or joint tenants with right of survivorship;

(b) a deed of division in kind of real property formerly held by tenants in common;

(d) a deed executed by an executor to implement a testamentary devise;

(e) a decree or deed that is an adjustment of property rights between divorcing parties;

(f) a transfer by a transferor of real property to a revocable living trust created by the same transferor or by a spouse of the transferor, or a transfer by the trustee of a revocable living trust back to the same transferor or to the transferor's spouse; or

(g) a deed executed by the trustee of a revocable living trust to implement a testamentary devise by the trustor of the trust.

SECTION 24. [NEW MATERIAL] RECORDATION TAX--INSTRUMENT OF INDEBTEDNESS ON REAL PROPERTY.--

A. An excise tax is imposed on all instruments of indebtedness for real property, including a mortgage, deed of trust or other security device of greater than twenty-five thousand dollars ($25,000). The rate of tax shall be seven and one-half cents ($.075) on each one hundred dollars ($100), or fractional part thereof, of the indebtedness above twenty-five thousand dollars ($25,000).

B. The tax imposed by this section shall be paid by the mortgagor, grantor or debtor, as evidenced by the instrument offered for recording. The tax shall be paid to the county clerk of the county in which the real property is located. If the instrument is for a parcel of real property lying in two or more counties, the tax shall be paid to the county clerk of the county in which the greater part of the real property with respect to value lies. If some of the real property lies outside this state, the tax may be paid on the value of real property in this state. The county clerk shall not record the instrument until the tax has been paid.

C. If the consideration or stipulation of indebtedness does not appear on the face of the instrument being offered for recording, the county clerk shall require a separate statement made in recordable form indicating the amount of the indebtedness so secured.

D. When the instrument being offered for recording secures, or evidences the securing of, a line of credit or other indebtedness arising from more than one advance or extension of credit, the amount of which may vary from time to time, the tax shall be computed and paid on the maximum amount of the indebtedness as stated in the instrument or the accompanying sworn statement, and the reduction or subsequent increasing of the amount of the indebtedness within such limits shall not result in additional tax.

E. As used in this section, "indebtedness" means the principal debt or obligation that is reasonably contemplated by the parties to be included within the terms of the agreement. "Indebtedness" does not include any amount of interest, collection expense, including attorney fees and expenses incurred in preserving, protecting, improving or insuring property that serves as collateral for the indebtedness, or any other amount, other than the principal debt or obligation, for which a debtor becomes liable unless such amount is added to the principal debt or obligation, and is used to calculate additional interest pursuant to refinancing, reamortization, amendment or similar transaction or occurrence.

SECTION 25. [NEW MATERIAL] REPORT TO TAXATION AND REVENUE DEPARTMENT--ADMINISTRATION FEE.--The county clerk shall report all collections of taxes made pursuant to this section on forms prescribed by the taxation and revenue department and shall submit the proceeds of the taxes collected to the taxation and revenue department at the end of each month. A county may withhold an administrative fee of three percent of the net amount of the tax proceeds collected.

SECTION 26. [NEW MATERIAL] EXEMPTIONS.--

A. Instruments made pursuant to mergers, consolidations, sales or transfers of substantially all of the assets in this state of corporations, pursuant to plans of reorganization, are exempt from the taxes imposed by the Recordation Tax Act.

B. The recording and rerecording of all transfers of real property in which the state or any of its instrumentalities is the grantee or transferee and all instruments evidencing an indebtedness in which the state or any of its instrumentalities is the holder or owner of the indebtedness shall be exempt from the taxes imposed by the Recordation Tax Act.

C. Instruments for which a tax imposed pursuant to Section 23 of this 2017 act is paid shall be exempt from the tax imposed pursuant to Section 24 of this 2017 act.

D. Instruments for which a tax imposed pursuant to Section 24 of this 2017 act is paid shall be exempt from the tax imposed pursuant to Section 23 of this 2017 act.

SECTION 27. [NEW MATERIAL] LIMITATION ON AMOUNT OF TAX.--A tax imposed pursuant to the Recordation Tax Act shall not exceed one hundred thousand dollars ($100,000) with respect to instruments evidencing the same transfer of an interest in real property or each instrument of indebtedness for real property.

SECTION 28. REPEAL.--Sections 7-1-6.46 and 7-1-6.47 NMSA 1978 (being Laws 2004, Chapter 116, Sections 1 and 2, as amended) are repealed.

SECTION 29. APPLICABILITY.--

A. The provisions of Sections 5 through 12 of this act apply to taxable years beginning on or after January 1, 2018.

B. The provisions of Sections 20 and 21 of this act apply to receipts of the motor vehicle excise tax and any associated interest and penalties that are collected on and after July 1, 2017.

SECTION 30. EFFECTIVE DATE.--The effective date of the provisions of Sections 1 through 4, 13 through 19 and 22 through 28 of this act is July 1, 2017.

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