SENATE BILL 82

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

INTRODUCED BY

James P. White

 

 

 

 

 

AN ACT

RELATING TO TAXATION; PROVIDING A REFUNDABLE TAX CREDIT FOR TAXABLE YEAR 2019; PROVIDING FOR INTEREST IF THE REFUND IS NOT TIMELY MADE; MAKING AN APPROPRIATION; DECLARING AN EMERGENCY.

 

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] REFUNDABLE TAX CREDIT--2019 TAXABLE YEAR.--

          A. Except as otherwise provided in Subsection B of this section, a taxpayer who for the 2019 taxable year files a New Mexico income tax return, is a full-year or first-year resident of New Mexico and is not a trust, estate or a dependent of another taxpayer is allowed a credit in the amount determined under Subsection C of this section. The credit may be allowed even though the taxpayer has no income taxable under the Income Tax Act for the 2019 taxable year.

          B. A claim for the tax credit provided in this section is not allowed for a resident who was an inmate of a public institution for more than six months during the 2019 taxable year.

          C. The tax credit allowed in this section shall be in the amount determined from the following tables for:

                (1) married taxpayers filing jointly:

Adjusted Gross Income      Credit Amount   Additional Credit

                           for Taxpayer    Amount for Each

Over         Not Over     and Spouse      Dependent

0            $50,000      $100           $50.00

$50,000      $75,000      $80.00          $40.00

$75,000      $100,000     $50.00          $25.00

$100,000                   $0.00           $ 0.00; or

             (2) taxpayers filing as single, head of household, married filing separately or as a surviving spouse:

Adjusted Gross Income      Credit Amount   Additional Credit

                           for Taxpayer    Amount for Each

Over         Not Over                     Dependent

0            $50,000       $50.00            $50.00

$50,000      $75,000       $40.00            $40.00

$75,000      $100,000      $25.00            $25.00

$100,000                    $0.00             $0.00.

          D. The tax credit allowed in this section may be credited by the department against the taxpayer's New Mexico income tax liability. If the taxpayer is liable for interest and penalties on the taxpayer's income tax liability for the 2019 taxable year prior to the effective date of this section, the amount of interest and penalties shall not be recomputed due to the credit provided by this section but may be satisfied by applying the credit to the penalty or interest due.

          E. If the tax credit exceeds the taxpayer's income tax liability, the excess shall be refunded to the taxpayer.

          F. For purposes of this section, "dependent" means "dependent" as defined by Section 152 of the Internal Revenue Code."

     SECTION 2. Section 7-1-68 NMSA 1978 (being Laws 1965, Chapter 248, Section 69, as amended) is amended to read:

     "7-1-68. INTEREST ON OVERPAYMENTS.--

          A. As provided in this section, interest shall be allowed and paid on the amount of tax overpaid by a person that is subsequently refunded or credited to that person.

          B. Interest on overpayments of tax shall accrue and be paid at the underpayment rate established pursuant to Section 6621 of the Internal Revenue Code, computed on a daily basis; provided that if a different rate is specified by a compact or other interstate agreement to which New Mexico is a party, that rate shall apply to amounts due under the compact or other agreement.

          C. Unless otherwise provided by this section, interest on an overpayment not arising from an assessment by the department shall be paid from the date of the claim for refund until a date preceding by not more than thirty days the date of the credit or refund to any person; and interest on an overpayment arising from an assessment by the department shall be paid from the date of overpayment until a date preceding by not more than thirty days the date of the credit or refund to any person.

          D. Interest in the amount that may be refunded pursuant to Section 1 of this 2020 act shall only be allowed and paid if the amount is not refunded or credited within one hundred twenty days after the effective date of that section or the applicable period established in Subsection E of this section, whichever is later.

          [D.] E. No interest shall be allowed or paid with respect to an amount credited or refunded if:

             (1) the amount of interest due is less than one dollar ($1.00);

             (2) the credit or refund is made within:

                (a) fifty-five days of the date of the complete claim for refund of income tax, pursuant to either the Income Tax Act or the Corporate Income and Franchise Tax Act for the tax year immediately preceding the tax year in which the claim is made;

                (b) sixty days of the date of the complete claim for refund of any tax not provided for in this paragraph;

                (c) seventy-five days of the date of the complete claim for refund of gasoline tax to users of gasoline off the highways;

                (d) one hundred twenty days of the date of the complete claim for refund of tax imposed pursuant to the Resources Excise Tax Act, the Severance Tax Act, the Oil and Gas Severance Tax Act, the Oil and Gas Conservation Tax Act, the Oil and Gas Emergency School Tax Act, the Oil and Gas Ad Valorem Production Tax Act, the Natural Gas Processors Tax Act or the Oil and Gas Production Equipment Ad Valorem Tax Act; or

                (e) one hundred twenty days of the date of the complete claim for refund of income tax, pursuant to the Income Tax Act or the Corporate Income and Franchise Tax Act, for any tax year more than one year prior to the year in which the claim is made;

             (3) Sections 6611(f) and 6611(g) of the Internal Revenue Code, as those sections may be amended or renumbered, prohibit payment of interest for federal income tax purposes;

             (4) the credit results from overpayments found in an audit of multiple reporting periods and applied to underpayments found in that audit or refunded as a net overpayment to the taxpayer pursuant to Section 7-1-29 NMSA 1978;

             (5) the department applies the credit or refund to an intercept program, to the taxpayer's estimated payment prior to the due date for the estimated payment or to offset prior liabilities of the taxpayer pursuant to Subsection E of Section 7-1-29 NMSA 1978;

             (6) the credit or refund results from overpayments the department finds pursuant to Subsection F of Section 7-1-29 NMSA 1978 that exceed the refund claimed by the taxpayer on the return; or

             (7) the refund results from a tax credit pursuant to the Investment Credit Act, 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 or a rural job tax credit or high-wage jobs tax credit.

          [E.] F. Nothing in this section shall be construed to require the payment of interest upon interest."

     SECTION 3. APPROPRIATION.--Seven hundred fifty thousand dollars ($750,000) is appropriated from the general fund to the taxation and revenue department for expenditure in fiscal year 2020 to administer the tax credits provided pursuant to Section 1 of this act. Any unexpended or unencumbered balance remaining at the end of fiscal year 2020 shall revert to the general fund.

     SECTION 4. APPLICABILITY.--The provisions of this act apply to taxable years beginning between January 1, 2019 and December 31, 2019.

     SECTION 5. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.

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