HOUSE BILL 506
54th legislature - STATE OF NEW MEXICO - first session, 2019
Roberto "Bobby” J. Gonzales and Harry Garcia
RELATING TO TAXATION; CREATING THE WASTEWATER TREATMENT SYSTEM INCOME TAX CREDIT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. A new section of the Income Tax Act is enacted to read:
"[NEW MATERIAL] WASTEWATER TREATMENT SYSTEM INCOME TAX CREDIT.--
A. A taxpayer who is not a dependent of another individual and who purchases and installs a wastewater treatment system on property owned and occupied by the taxpayer as the taxpayer's primary residence may apply for, and the department may allow, a credit of up to two thousand five hundred dollars ($2,500) against the taxpayer's tax liability imposed pursuant to the Income Tax Act. The tax credit provided by this section may be referred to as the "wastewater treatment system income tax credit".
B. A taxpayer may claim a wastewater treatment system income tax credit for the taxable year in which the taxpayer purchases and installs a wastewater treatment system. To receive the tax credit, a taxpayer shall apply to the department on forms and in the manner prescribed by the department. The application shall include a certification made pursuant to Subsection F of this section.
C. That portion of a wastewater treatment system income tax credit that exceeds a taxpayer's tax liability in the taxable year in which the credit is claimed may be carried forward for a maximum of three consecutive taxable years.
D. 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 wastewater treatment system income tax credit that would have been claimed on a joint return.
E. A taxpayer may be allocated the right to claim a wastewater treatment system income tax credit in proportion to the taxpayer's ownership interest if the taxpayer owns an interest in a business entity that is taxed for federal income tax purposes as a partnership or limited liability company 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.
F. The department of environment shall adopt rules establishing procedures to provide certification of a wastewater treatment system that shall require compliance with that department's liquid waste disposal and treatment rules and that the wastewater treatment system was installed by a qualifying contractor as determined by that department.
G. A taxpayer allowed a tax credit pursuant to this section shall report the amount of the credit to the taxation and revenue department in a manner required by the taxation and revenue department.
H. The taxation and revenue department shall compile an annual report on the wastewater treatment system income 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. That department shall present the report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the effectiveness and cost of the tax credit.
I. As used in this section, "wastewater treatment system" means an on-site liquid wastewater treatment system that uses a process of wastewater treatment that removes a greater amount of contaminant than is accomplished through primary treatment."
SECTION 2. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2019.
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