HOUSE BILL 104

54th legislature - STATE OF NEW MEXICO - second session, 2020

INTRODUCED BY

Cathrynn N. Brown

 

 

 

 

 

AN ACT

RELATING TO TAXATION; CREATING THE COUNTY ROAD FUND DONATION INCOME TAX CREDIT AND THE COUNTY ROAD FUND DONATION CORPORATE INCOME TAX CREDIT.

 

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

     SECTION 1. A new section of the Income Tax Act is enacted to read:

     "[NEW MATERIAL] COUNTY ROAD FUND DONATION INCOME TAX CREDIT.--

          A. For taxable years prior to January 1, 2025, a taxpayer who is not a dependent of another individual and who makes a donation to a county road fund may apply for, and the department may allow, a credit against the taxpayer's tax liability imposed pursuant to the Income Tax Act in an amount equal to fifty percent of the amount donated, not to exceed one million dollars ($1,000,000). The tax credit provided by this section may be referred to as the "county road fund donation income tax credit".

          B. A taxpayer may request a county to apply the donated amount to a specific road or bridge, or portion thereof; provided that, if a county does not agree to the request, the donation shall be deemed not made, the donated amount, if received by the county, shall be returned to the taxpayer and the taxpayer shall not be eligible for a county road fund donation income tax credit for that donated amount.

          C. A taxpayer may claim a county road fund donation income tax credit for the taxable year in which the taxpayer makes a donation to a county road fund. 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 evidence that the taxpayer made a donation as required by this section.

          D. That portion of a county road fund donation income tax credit that exceeds a taxpayer's tax liability in the taxable year in which the credit is claimed shall not be refundable.

          E. 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 county road fund donation income tax credit that would have been claimed on a joint return.

          F. A taxpayer may be allocated the right to claim a county road fund donation 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.

          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 county road fund donation 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 cost of the credit. The department shall compile and present the report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the cost of the tax credit."

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

     "[NEW MATERIAL] COUNTY ROAD FUND DONATION CORPORATE INCOME TAX CREDIT.--

          A. For taxable years prior to January 1, 2025, a taxpayer that files a New Mexico corporate income tax return that makes a donation to a county road fund may apply for, and the department may allow, a credit against the taxpayer's tax liability imposed pursuant to the Corporate Income and Franchise Tax Act in an amount equal to fifty percent of the amount donated, not to exceed one million dollars ($1,000,000). The tax credit provided by this section may be referred to as the "county road fund donation corporate income tax credit".

          B. A taxpayer may request a county to apply the donated amount to a specific road or bridge, or portion thereof; provided that, if a county does not agree to the request, the donation shall be deemed not made, the donated amount, if received by the county, shall be returned to the taxpayer and the taxpayer shall not be eligible for a county road fund donation corporate income tax credit for that donated amount.

          C. A taxpayer may claim a county road fund donation corporate income tax credit for the taxable year in which the taxpayer makes a donation to a county road fund. 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 evidence that the taxpayer made a donation as required by this section.

          D. That portion of a county road fund donation corporate income tax credit that exceeds a taxpayer's tax liability in the taxable year in which the credit is claimed shall not be refundable.

          E. 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.

          F. The department shall compile an annual report on the county road fund donation corporate 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 cost of the credit. The department shall compile and present the report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the cost of the tax credit."

     SECTION 3. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2020.

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