SENATE BILL 63
54th legislature - STATE OF NEW MEXICO - second session, 2020
George K. Munoz
RELATING TO TAXATION; AUTHORIZING MUNICIPALITIES AND COUNTIES TO IMPOSE A TENANCY TAX; PROVIDING FOR LOCAL CONTROL OF ELIGIBLE USES FOR THE TENANCY TAX REVENUE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. [NEW MATERIAL] SHORT TITLE.--This act may be cited as the "Tenancy Tax Act".
SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Tenancy Tax Act:
A. "gross taxable rent" means the total amount of rent paid for lodging, not including state or local gross receipts taxes;
B. "lodging" means the transaction of furnishing rooms or other accommodations by a vendor to a vendee who for rent uses, possesses or has the right to use or possess the rooms or other accommodations in or at a taxable premises;
C. "lodgings" means the rooms or other accommodations furnished by a vendor to a vendee;
D. "rent" means the consideration received by a vendor in money, credits, property or other consideration valued in money for lodgings;
E. "taxable premises" means housing premises used for lodging, including a hotel, motel, lodging house, rooming house, motor hotel, guest house, mobile home, motor court, auto court, auto camp, trailer court, trailer camp, trailer park, tourist camp or recreational vehicle park;
F. "vendee" means a natural person to whom lodgings are furnished; and
G. "vendor" means a person or the person's agent furnishing lodgings.
SECTION 3. [NEW MATERIAL] AUTHORITY TO IMPOSE TAX-- LIMITATIONS ON USE OF PROCEEDS.--
A. A municipality may impose by ordinance a tenancy tax for revenues on lodging within the municipality, and the board of county commissioners of a county may impose by ordinance a tenancy tax for revenues on lodging within that part of the county outside of the incorporated limits of a municipality. The tax imposed pursuant to this section shall be referred to as the "tenancy tax".
B. The tenancy tax shall not exceed five percent of the gross taxable rent.
C. A vendor who is furnishing lodgings within a municipality or county is exercising a taxable privilege.
D. The proceeds from the tenancy tax shall be used only for the purposes stated in the ordinance by which the tax is authorized.
SECTION 4. [NEW MATERIAL] EXEMPTIONS.--The tenancy tax shall not apply:
A. if a vendee has manifested an intent to make the taxable premises a residence or household;
B. if a vendee provides proof to a vendor that the vendee's income is below one hundred eighty-five percent of the federal poverty guidelines;
C. for the first thirty days that the vendee rents the taxable premises;
D. to lodging accommodations at institutions of the federal government, the state or any political subdivision thereof;
E. to lodging accommodations at religious, charitable, educational or philanthropic institutions, including accommodations at summer camps operated by such institutions;
F. to clinics, hospitals or other medical facilities; or
G. to privately owned and operated convalescent homes or homes for the aged, infirm, indigent or chronically ill.
SECTION 5. [NEW MATERIAL] COLLECTION OF TAXES.--
A. Every vendor providing lodgings in a municipality or county imposing a tenancy tax shall collect the proceeds of the tax on behalf of the municipality or county and shall act as a trustee of the proceeds.
B. The tax shall be collected from vendees in accordance with the ordinance imposing the tax and shall be charged separately from the rent fixed by the vendor for the lodgings.
SECTION 6. [NEW MATERIAL] AUDIT OF VENDORS.--The governing body of any municipality or county collecting tenancy tax proceeds shall select for annual random audits one or more vendors to verify the amount of gross taxable rent subject to the tenancy tax and to ensure that the full amount of tenancy tax on that rent is collected. Copies of audits completed shall be filed annually with the local government division of the department of finance and administration.
SECTION 7. [NEW MATERIAL] ENFORCEMENT.--
A. An action to enforce the provisions of the Tenancy Tax Act may be brought by:
(1) the attorney general, the district attorney in the county of jurisdiction or the city attorney of the municipality; or
(2) a vendor who is collecting the proceeds of a tenancy tax.
B. A district court may issue a writ of mandamus or order an injunction or other appropriate remedy to enforce the provisions of the Tenancy Tax Act.
C. The court shall award costs and reasonable attorney fees to the prevailing party in a court action to enforce the provisions of the Tenancy Tax Act.
SECTION 8. [NEW MATERIAL] LIEN FOR TENANCY TAX--PAYMENT-- CERTIFICATE OF LIENS.--
A. A tenancy tax imposed by a municipality or county constitutes a lien in favor of that municipality or county upon the personal and real property of the vendor providing lodgings in that municipality or county. Priority of the lien shall be determined from the date of filing.
B. Under process or order of court, no person shall sell the property of any vendor without first ascertaining from the clerk or treasurer of the municipality or county in which the vendor is located the amount of any tenancy tax on that property due the municipality or county. Any tenancy tax due the municipality or county shall be paid from the proceeds of the sale before payment is made to the judgment creditor or any other person with a claim on the sale proceeds.
C. The clerk or treasurer of a municipality or county shall furnish to any person applying for such a certificate a certificate showing the amount of all liens in the records of the municipality or county against any vendor pursuant to the Tenancy Tax Act.
SECTION 9. [NEW MATERIAL] ORDINANCE REQUIREMENTS.--An ordinance imposing a tenancy tax or any ordinance amendatory thereof or supplemental to that ordinance, except as limited by or otherwise provided in the Tenancy Tax Act, shall:
A. state the rate or other amount of the tenancy tax; the times, place and method for the payment of the tenancy tax proceeds to the municipality or county; the accounts and other records to be maintained in connection with the tenancy tax; a procedure for making refunds and resolving disputes relating to the tenancy tax, including exemptions pertaining to the tax; the procedure for preservation and destruction of records and their inspection and investigation; vendor audit requirements; applicable civil and criminal penalties; and a procedure of liens, distraint and sales to satisfy liens;
B. state the purposes of the tenancy tax;
C. state the eligible uses of the tenancy tax revenue;
D. state the penalty for failure to comply with the Tenancy Tax Act; and
E. provide other rights, privileges, powers, immunities and other details relating to any vendor licenses, the collection of the tenancy tax and the remittance of the proceeds of the tax to the municipality or county.
SECTION 10. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2020.
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