HOUSE BILL 276

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

INTRODUCED BY

Cathrynn N. Brown

 

 

 

 

 

AN ACT

RELATING TO TAXATION; PROVIDING AN INCOME TAX DEDUCTION AND CORPORATE INCOME TAX DEDUCTION FOR DONATIONS MADE TO A COUNTY ROAD FUND.

 

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] DEDUCTION--DONATION TO COUNTY ROAD FUND.--

          A. A taxpayer who is not a dependent of another individual and who makes a donation to a county road fund may claim a deduction from net income in an amount equal to fifty percent of the amount donated, not to exceed one million dollars ($1,000,000).

          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. To claim a deduction pursuant to this section, a taxpayer shall submit to the department information required by the secretary establishing that the taxpayer is eligible to claim a deduction pursuant to this section.

          D. Married individuals who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the deduction provided by this section that would have been allowed on a joint return.

          E. A taxpayer may be allocated the right to claim the deduction provided by this section 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 deduction claimed by all members of the partnership or a limited liability company shall not exceed the allowable amount provided in Subsection A of this section.

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

          G. The department shall compile an annual report on the deduction provided by this section that shall include the number of taxpayers that claimed the deduction, the aggregate amount of deductions claimed and any other information necessary to evaluate the effectiveness of the deduction. The department shall present the annual report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the cost of the deduction."

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

     "[NEW MATERIAL] DEDUCTION--DONATION TO COUNTY ROAD FUND.--

          A. A taxpayer that makes a donation to a county road fund may claim a deduction from taxable income in an amount equal to fifty percent of the amount donated, not to exceed one million dollars ($1,000,000).

          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. To claim a deduction pursuant to this section, a taxpayer shall submit to the department information required by the secretary establishing that the taxpayer is eligible to claim a deduction pursuant to this section.

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

          E. The department shall compile an annual report on the deduction provided by this section that shall include the number of taxpayers that claimed the deduction, the aggregate amount of deductions claimed and any other information necessary to evaluate the effectiveness of the deduction. The department shall present the annual report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the cost of the deduction."

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

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