0001| SENATE BILL 37
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0002| 42ND LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION,
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0003| 1996
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0004| INTRODUCED BY
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0005| LEONARD LEE RAWSON
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0006|
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0007|
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0008|
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0009| FOR THE REVENUE STABILIZATION AND TAX POLICY COMMITTEE
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0010|
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0011| AN ACT
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0012| RELATING TO TAXATION; AMENDING THE INCOME TAX ACT AND CORPORATE
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0013| INCOME AND FRANCHISE TAX ACT TO MAKE SPECIFIC THE TAXABILITY OF
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0014| GAMBLING WINNINGS; AMENDING THE WITHHOLDING TAX ACT TO REQUIRE
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0015| WITHHOLDING FROM CERTAIN GAMBLING WINNINGS; DECLARING AN
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0016| EMERGENCY.
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0017|
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0018| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0019| Section 1. Section 7-2-11 NMSA 1978 (being Laws 1965,
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0020| Chapter 202, Section 9, as amended) is amended to read:
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0021| "7-2-11. TAX CREDIT--INCOME ALLOCATION AND
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0022| APPORTIONMENT.--
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0023| A. Net income of any individual having income that
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0024| is taxable both within and without this state shall be
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0025| apportioned and allocated as follows:
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0001| (1) during the first taxable year in which an
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0002| individual incurs tax liability as a resident, only income
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0003| earned on or after the date the individual became a resident
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0004| and, in addition, income earned in New Mexico while a
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0005| nonresident of New Mexico shall be allocated to New Mexico;
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0006| (2) except as provided otherwise in Paragraph
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0007| (1) of this subsection, income other than compensation or
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0008| gambling winnings shall be allocated and apportioned as
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0009| provided in the Uniform Division of Income for Tax Purposes Act,
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0010| but if the income is not allocated or apportioned by that act,
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0011| then it may be allocated or apportioned in accordance with
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0012| instructions, rulings or regulations of the secretary;
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0013| (3) except as provided otherwise in Paragraph
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0014| (1) of this subsection, compensation and gambling winnings of
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0015| a resident taxpayer shall be allocated to this state;
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0016| (4) compensation of a nonresident taxpayer
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0017| shall be allocated to this state to the extent that such
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0018| compensation is for activities, labor or personal services
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0019| within this state; provided, if the activities, labor or
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0020| services are performed in this state for fifteen or fewer days
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0021| during the taxpayer's taxable year, the compensation may be
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0022| allocated to the taxpayer's state of residence;
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0023| (5) [except as provided otherwise in Paragraph
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(1) of this subsection, nonbusiness income as defined in the
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Uniform Division of Income for Tax Purposes Act not otherwise
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allocated or apportioned in the Uniform Division of Income for
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Tax Purposes Act shall be equitably apportioned in accordance
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with regulations of the secretary] gambling winnings of a
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0004| nonresident shall be allocated to this state if the gambling
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0005| winnings arose from a source within this state; and
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0006| (6) other deductions and exemptions allowable
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0007| in computing net income and not specifically allocated in the
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0008| Uniform Division of Income for Tax Purposes Act shall be
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0009| equitably allocated or apportioned in accordance with
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0010| instructions, rulings or regulations of the secretary.
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0011| B. For the purposes of this section, "non-New Mexico
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0012| percentage" means the percentage determined by dividing the
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0013| difference between the taxpayer's net income and the sum of the
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0014| amounts allocated or apportioned to New Mexico by that net
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0015| income.
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0016| C. A taxpayer may claim a credit in an amount equal
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0017| to the amount of tax determined to be due under Section 7-2-7 or
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0018| 7-2-7.1 NMSA 1978 multiplied by the non-New Mexico percentage."
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0019| Section 2. Section 7-2A-8 NMSA 1978 (being Laws 1981,
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0020| Chapter 37, Section 41, as amended) is amended to read:
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0021| "7-2A-8. CREDIT--INCOME ALLOCATION AND APPORTIONMENT.--
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0022| A. Net income of any taxpayer having income that is
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0023| taxable both within and without this state shall be apportioned
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0024| and allocated as follows:
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0025| (1) except as otherwise provided in Paragraphs
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0001| (2) [and (3)] through (4) of this subsection, income shall
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0002| be allocated and apportioned as provided in the Uniform Division
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0003| of Income for Tax Purposes Act;
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0004| (2) except for gambling winnings, nonbusiness
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0005| income as defined in the Uniform Division of Income for Tax
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0006| Purposes Act not otherwise allocated or apportioned under the
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0007| Uniform Division of Income for Tax Purposes Act shall be
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0008| equitably allocated or apportioned in accordance with
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0009| instructions, rulings or regulations of the secretary; [and]
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0010| (3) other deductions and exemptions allowable
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0011| in computing federal taxable income and not specifically
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0012| allocated in the Uniform Division of Income for Tax Purposes Act
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0013| shall be equitably allocated or apportioned in accordance with
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0014| instructions, rulings or regulations of the secretary; and
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0015| (4) gambling winnings that are nonbusiness
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0016| income and arise from sources within this state shall be
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0017| allocated to this state.
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0018| B. For the purposes of this section, "non-New Mexico
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0019| percentage" means the percentage determined by dividing the
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0020| difference between the taxpayer's net income and the sum of the
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0021| amounts allocated or apportioned to New Mexico by that net
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0022| income.
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0023| C. A taxpayer may claim a credit in an amount equal
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0024| to the amount of tax determined to be due under Section 7-2A-5
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0025| NMSA 1978 multiplied by the non-New Mexico percentage."
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0001| Section 3. Section 7-3-2 NMSA 1978 (being Laws 1990,
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0002| Chapter 64, Section 1) is amended to read:
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0003| "7-3-2. DEFINITIONS.--As used in the Withholding Tax Act:
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0004| A. "department" means the taxation and revenue
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0005| department, the secretary of taxation and revenue or any
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0006| employee of the department exercising authority lawfully
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0007| delegated to that employee by the secretary;
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0008| B. "employee" means either an individual domiciled
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0009| within the state who performs services either within or without
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0010| the state for an employer or, to the extent permitted by law, an
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0011| individual domiciled outside of the state who performs services
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0012| within the state for an employer;
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0013| C. "employer" means a person, or an officer, agent
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0014| or employee of that person, having control of the payment of
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0015| wages, doing business in or deriving income from sources within
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0016| the state for whom an individual performs or performed any
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0017| service as the employee of that person, except that if the
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0018| person for whom the individual performs or performed the
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0019| services does not have control over the payment of the wages for
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0020| such services, "employer" means the person having control of the
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0021| payment of wages;
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0022| D. "Internal Revenue Code" means the Internal
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0023| Revenue Code of 1986, as amended;
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0024| E. "payor" means any person making payment of a
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0025| pension or annuity to an individual domiciled in New Mexico;
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0001| F. "payroll period" means a period for which a
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0002| payment of wages is made to the employee by his employer;
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0003| G. "person" means any individual, club, company,
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0004| cooperative association, corporation, estate, firm, joint
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0005| venture, partnership, receiver, syndicate, trust or other
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0006| association and, to the extent permitted by law, any federal,
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0007| state or other governmental unit or subdivision or an agency,
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0008| department or instrumentality thereof;
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0009| H. "wagerer" means any person who receives winnings
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0010| that are subject to withholding;
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0011| [H.] I. "wages" means remuneration in cash or
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0012| other form for services performed by an employee for an
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0013| employer;
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0014| J. "winnings that are subject to withholding" means
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0015| "winnings which are subject to withholding" as that term is
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0016| defined in Section 3402 of the Internal Revenue Code;
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0017| [I.] K. "withholdee" means:
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0018| (1) an individual domiciled in New Mexico
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0019| receiving a pension or annuity from which an amount of tax is
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0020| deducted and withheld pursuant to the Withholding Tax Act;
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0021| [and]
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0022| (2) an employee; and
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0023| (3) a wagerer; and
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0024| [J.] L. "withholder" means a payor, [or] an
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0025| employer or any person required to deduct and withhold from
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0001| winnings that are subject to withholding."
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0002| Section 4. Section 7-3-3 NMSA 1978 (being Laws 1961,
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0003| Chapter 243, Section 3, as amended) is amended to read:
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0004| "7-3-3. TAX WITHHELD AT SOURCE.--
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0005| A. Every employer who deducts and withholds a
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0006| portion of an employee's wages for payment of income tax under
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0007| the provisions of the Internal Revenue Code shall deduct and
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0008| withhold an amount for each payroll period computed from a state
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0009| withholding tax table furnished by the department; provided:
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0010| (1) if the employee instructs the employer to
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0011| withhold a greater amount, the employer shall deduct and
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0012| withhold the greater amount;
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0013| (2) if the employee is not a resident of New
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0014| Mexico and is to perform services in New Mexico for fifteen or
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0015| fewer days cumulatively during the calendar year, the employer
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0016| is not required to deduct and withhold an amount from that
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0017| employee's wages; and
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0018| (3) if the aggregate monthly amount withheld
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0019| under this section would be less than one dollar ($1.00) for an
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0020| employee, the employer shall not be required to deduct and
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0021| withhold wages in regard to that employee.
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0022| B. The department shall devise and furnish a state
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0023| withholding tax table based on statutes made and provided to
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0024| employers required to withhold amounts under this section. This
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0025| table shall be devised to provide for a yearly aggregate
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0001| withholding that will approximate the state income tax liability
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0002| of average taxpayers in each exemption category.
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0003| C. If an individual requests in writing that the
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0004| payor deduct and withhold an amount from the amount of the
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0005| pension or annuity due the individual, the payor making payment
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0006| of a pension or annuity to an individual domiciled in New Mexico
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0007| shall deduct and withhold the amount requested to be deducted
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0008| and withheld, provided that the payor is not required to deduct
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0009| and withhold any amount less than ten dollars ($10.00) per
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0010| payment. The written request shall include the payee's name,
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0011| current address, taxpayer identification number and, if
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0012| applicable, the contract, policy or account number to which the
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0013| request applies.
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0014| D. Every person in New Mexico who is required by
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0015| the provisions of the Internal Revenue Code to deduct and
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0016| withhold federal tax from payment of winnings that are subject
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0017| to withholding shall deduct and withhold from such payment a tax
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0018| in an amount equal to six percent of the winnings, except that
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0019| an Indian nation, tribe or pueblo or an agency, department,
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0020| subdivision or instrumentality thereof is not required to deduct
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0021| or withhold from payments made to members or spouses of members
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0022| of that Indian nation, tribe or pueblo."
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0023| Section 5. Section 7-3-4 NMSA 1978 (being Laws 1961,
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0024| Chapter 243, Section 4, as amended) is amended to read:
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0025| "7-3-4. DEDUCTIONS CONSIDERED TAXES.--Amounts deducted
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0001| under the provisions of the Withholding Tax Act shall be a
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0002| collected tax. No employee shall have a right of action against
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0003| the employer for any amount deducted and withheld from the
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0004| employee's wages. No individual who has instructed a payor to
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0005| deduct and withhold an amount from the pension or annuity due
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0006| that individual shall have a right of action against a payor for
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0007| any amount deducted and withheld pursuant to the instruction.
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0008| No wagerer who receives winnings that are subject to
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0009| withholding shall have a right of action against the person who
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0010| deducted and withheld an amount from the wagerer's winnings."
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0011| Section 6. Section 7-3-7 NMSA 1978 (being Laws 1961,
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0012| Chapter 243, Section 8, as amended) is amended to read:
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0013| "7-3-7. STATEMENTS OF WITHHOLDING.--
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0014| A. Every employer shall file an annual statement of
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0015| withholding for each employee. This statement shall be in a
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0016| form prescribed by the department and shall be filed with the
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0017| department on or before the last day of February of the year
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0018| following that for which the statement is made. It shall
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0019| include the total compensation paid the employee and the total
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0020| amount of tax withheld for the calendar year or portion of a
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0021| calendar year if the employee has worked less than a full
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0022| calendar year.
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0023| B. Every payor shall file an annual statement of
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0024| withholding for each individual from whom some portion of a
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0025| pension or an annuity has been deducted and withheld by that
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0001| payor. This statement shall be in a form prescribed by the
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0002| department and shall be filed with the department on or before
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0003| the last day of February of the year following that for which
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0004| the statement is made. It shall include the total amount of
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0005| pension or annuity paid to the individual and the amount of tax
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0006| withheld for the calendar year.
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0007| C. Every person required to deduct and withhold tax
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0008| from a payment of winnings that are subject to withholding shall
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0009| file an annual statement of withholding for each wagerer from
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0010| whom some portion of a payment of winnings has been deducted and
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0011| withheld by that person. This statement shall be in a form
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0012| prescribed by the department and shall be filed with the
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0013| department on or before the last day of February of the year
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0014| following that for which the statement is made. It shall
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0015| include the total amount of winnings paid to the individual and
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0016| the amount of tax withheld for the calendar year. The
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0017| department may also require any person who is required to submit
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0018| an information return to the internal revenue service regarding
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0019| the winnings of another person to submit copies of the return to
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0020| the department."
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0021| Section 7. EFFECTIVE DATE.--The effective date of the
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0022| provisions of this act is April 1, 1996.
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0023| Section 8. EMERGENCY.--It is necessary for the public
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0024| peace, health and safety that this act take effect immediately.
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0025| - 10 -
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0001|
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0002| FORTY-SECOND LEGISLATURE
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0003| SECOND SESSION, 1996
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0004|
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0005|
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0006| JANUARY 23, 1996
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0007|
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0008| Mr. President:
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0009|
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0010| Your COMMITTEES' COMMITTEE, to whom has been referred
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0011|
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0012| SENATE BILL 37
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0013|
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0014| has had it under consideration and finds same to be GERMANE, PURSUANT
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0015| TO CONSTITUTIONAL PROVISIONS, and thence referred to the WAYS AND
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0016| MEANS COMMITTEE.
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0017|
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0018| Respectfully submitted,
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0019|
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0020|
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0021|
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0022|
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0023| __________________________________
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0024| SENATOR MANNY M. ARAGON, Chairman
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0025|
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0001|
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0002|
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0003| Adopted_______________________ Not Adopted_______________________
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0004| (Chief Clerk) (Chief Clerk)
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0005|
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0006|
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0007| Date ________________________
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0008|
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0009|
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0010|
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0011| S0037CC1
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0012|
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0013| FORTY-SECOND LEGISLATURE SB 37/a
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0014| SECOND SESSION, 1996
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0015|
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0016|
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0017| January 26, 1996
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0018|
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0019| Mr. President:
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0020|
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0021| Your WAYS AND MEANS COMMITTEE, to whom has been referred
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0022|
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0023| SENATE BILL 37
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0024|
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0025| has had it under consideration and reports same with recommendation that
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0001| it DO PASS, amended as follows:
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0002|
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0003| 1. On page 9, line 7, after the word "winnings" insert "for the
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0004| amount deducted and withheld",
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0005|
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0006| and thence referred to the FINANCE COMMITTEE.
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0007|
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0008| Respectfully submitted,
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0009|
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0010|
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0011|
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0012| __________________________________
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0013| TITO D. CHAVEZ, Chairman
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0014|
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0015|
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0016|
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0017| Adopted_______________________ Not Adopted_______________________
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0018| (Chief Clerk) (Chief Clerk)
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0019|
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0020|
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0021| Date ________________________
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0022|
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0023|
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0024| The roll call vote was 7 For 0 Against
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0025| Yes: 7
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0001| No: 0
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0002| Excused: Riley
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0003| Absent:
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0004|
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0005|
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0006|
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0007|
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0008|
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0009| S0037WM1
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0010|
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0011|
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0012| FORTY-SECOND LEGISLATURE
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0013| SECOND SESSION, 1996
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0014|
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0015|
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0016| February 9, 1996
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0017|
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0018| Mr. President:
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0019|
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0020| Your FINANCE COMMITTEE, to whom has been referred
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0021|
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0022| SENATE BILL 37, as amended
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0023|
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0024| has had it under consideration and reports same with recommendation that
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0025| it DO PASS.
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0001|
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0002| Respectfully submitted,
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0003|
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0004|
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0005|
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0006| __________________________________
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0007| Ben D. Altamirano, Chairman
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0008|
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0009|
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0010|
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0011| Adopted_______________________ Not Adopted_______________________
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0012| (Chief Clerk) (Chief Clerk)
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0013|
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0014|
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0015|
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0016| Date ________________________
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0017|
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0018|
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0019| The roll call vote was 7 For 0 Against
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0020| Yes: 7
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0021| No: 0
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0022| Excused: Aragon, Duran, Ingle, Kidd, Kysar, Sanchez
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0023| Absent: None
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0024|
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0025|
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0001| S0037FC1
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0002| State of New Mexico
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0003| House of Representatives
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0004|
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0005| FORTY-SECOND LEGISLATURE
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0006| SECOND SESSION, 1996
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0007|
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0008|
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0009| February 13, 1996
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0010|
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0011|
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0012| Mr. Speaker:
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0013|
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0014| Your TAXATION AND REVENUE COMMITTEE, to whom has been
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0015| referred
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0016|
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0017| SENATE BILL 37, as amended
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0018|
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0019| has had it under consideration and reports same with
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0020| recommendation that it DO PASS.
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0021|
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0022| Respectfully submitted,
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0023|
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0024|
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0025|
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0001|
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0002| Jerry W. Sandel, Chairman
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0003|
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0004|
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0005| Adopted Not Adopted
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0006| (Chief Clerk) (Chief Clerk)
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0007|
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0008| Date
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0009|
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0010| The roll call vote was 10 For 0 Against
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0011| Yes: 10
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0012| Excused: Gonzales, Lovejoy, Sandel
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0013| Absent: None
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0014|
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0015|
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0016| S0037TR1
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