SB0022

SENATE BILL 22

56th legislature - STATE OF NEW MEXICO - second session, 2024

INTRODUCED BY

Ron Griggs

AN ACT

RELATING TO TAXATION; CREATING THE MALL RENOVATION INCOME TAX CREDIT AND THE MALL RENOVATION 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] MALL RENOVATION INCOME TAX CREDIT.--

A. A taxpayer who is not a dependent of another individual and who, beginning on the effective date of this section and prior to January 1, 2034, incurs qualifying costs for a mall renovation project may claim a credit 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 "mall renovation income tax credit".

B. The credit provided by this section shall be in an amount equal to the product of the qualifying costs incurred by a taxpayer for a mall renovation project multiplied by a rate equal to the sum of the state and local gross receipts tax rates at the location of the mall renovation project.

C. Prior to beginning a mall renovation project, a taxpayer shall apply for pre-certification from the economic development department, on forms and in the manner prescribed by that department. The application shall include a proposal for the mall renovation project, including a detailed description of the project, projected costs, the expected beginning and completion dates and a mall renovation project plan, including phases of construction, if any. If the economic development department determines that the projected costs are likely to meet the requirements for qualifying costs, it shall issue a pre-certification to the taxpayer; provided that pre-certification received pursuant to this subsection shall not mean that the actual costs for the mall renovation project will be approved for a credit provided by this section.

D. Within one calendar year of completion of a mall renovation project, the taxpayer shall apply for certification of eligibility from the economic development department on forms and in the manner prescribed by that department and including an affidavit from a certified public accountant verifying that the qualifying costs were incurred by the taxpayer and meet the requirements of this section. The aggregate amount of credits that may be certified as eligible in a calendar year is fifty million dollars ($50,000,000). Completed applications shall be considered in the order received. If a taxpayer is eligible for the credit, a dated certificate of eligibility shall be issued to the taxpayer providing the amount of credit for which the taxpayer is eligible; provided that applications for certification received after the limitation on the aggregate amount of credits has been met in a calendar year shall not be approved.

E. That portion of approved credit claimed by a taxpayer that exceeds the taxpayer's income tax liability in the taxable year in which the credit is claimed may be carried forward for five consecutive taxable years.

F. 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 credit that would have been claimed on a joint return.

G. A taxpayer may be allocated the right to claim the credit 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 credit claimed by all members of the partnership or limited liability company shall not exceed the allowable credit pursuant to this section.

H. A taxpayer allowed a credit pursuant to this section shall report the amount of the credit to the taxation and revenue department on a form and in a manner required by the department.

I. The department shall compile an annual report on the credit provided by this section that shall include the number of taxpayers approved by the department to receive the tax credit, the aggregate amount of tax credits approved and any other information necessary to evaluate the tax credit. The department shall compile and 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 tax credit.

J. As used in this section:

(1) "mall" means real property located in New Mexico that provides space for at least twenty individual businesses that provide retail or food or beverage establishments;

(2) "mall renovation project" means the restoration, renovation and rehabilitation of at least seventy-five percent of a mall. "Mall renovation project" does not mean new construction; and

(3) "qualifying costs" means costs incurred by the taxpayer:

(a) for planning, designing, construction and construction-related equipment for the restoration, renovation and rehabilitation of a mall;

(b) in an amount equal to or greater than two hundred fifty thousand dollars ($250,000); and

(c) that shall not include any amount for which a tax credit pursuant to the federal new markets tax credit has been claimed pursuant to Section 45D of the Internal Revenue Code, as that section may be amended or renumbered."

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

"[NEW MATERIAL] MALL RENOVATION CORPORATE INCOME TAX CREDIT.--

A. A taxpayer that, beginning on the effective date of this section and prior to January 1, 2034, incurs qualifying costs for a mall renovation project may claim a credit against the taxpayer's tax liability imposed pursuant to the Corporate Income and Franchise Tax Act. The tax credit provided by this section may be referred to as the "mall renovation corporate income tax credit".

E. That portion of approved credit claimed by a taxpayer that exceeds the taxpayer's corporate income tax liability in the taxable year in which the credit is claimed may be carried forward for five consecutive taxable years.

F. A taxpayer allowed a credit pursuant to this section shall report the amount of the credit to the taxation and revenue department on a form and in a manner required by the department.

G. The department shall compile an annual report on the credit provided by this section that shall include the number of taxpayers approved by the department to receive the tax credit, the aggregate amount of tax credits approved and any other information necessary to evaluate the tax credit. The department shall compile and 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 tax credit.

H. As used in this section:

(1) "mall" means real property located in New Mexico that provides space for at least twenty individual businesses that provide retail or food or beverage establishments;

(2) "mall renovation project" means the restoration, renovation and rehabilitation of at least seventy-five percent of the mall. "Mall renovation project" does not mean new construction; and

(3) "qualifying costs" means costs incurred by the taxpayer:

(a) for planning, designing, construction and construction-related equipment for the restoration, renovation and rehabilitation of a mall;

(b) in an amount equal to or greater than two hundred fifty thousand dollars ($250,000); and

SECTION 3. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2024.

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