0001| AN ACT | 0002| RELATING TO TAXATION; PROVIDING A CREDIT AGAINST CORPORATE INCOME TAX; | 0003| ENACTING A SECTION OF THE NMSA 1978. | 0004| | 0005| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0006| Section 1. A new section of the Corporate Income and Franchise | 0007| Tax Act is enacted to read: | 0008| "INTERGOVERNMENTAL BUSINESS TAX CREDIT.-- | 0009| A. With respect to the net income of a taxpayer engaged in | 0010| the transaction of business occurring after July 1, 1997 from a new | 0011| business on Indian land, the person who is liable for the payment of | 0012| the corporate income tax may claim a credit as provided in Subsection | 0013| D of this section against the corporate income tax for the aggregate | 0014| amount of tax paid to an Indian nation, tribe or pueblo located in | 0015| whole or in part within New Mexico. | 0016| B. The credit provided by this section may be referred to | 0017| as the "intergovernmental business tax credit". | 0018| C. As used in this section: | 0019| (1) "aggregate amount of tax" means the total of all | 0020| taxes imposed by an Indian nation, tribe or pueblo located in whole or | 0021| in part in New Mexico on income derived from the new business's | 0022| activity on Indian land, except a tax shall not be included in that | 0023| total if the tax is eligible for a credit pursuant to the provisions | 0024| of Section 7-29C-1 NMSA 1978 or any other intergovernmental tax credit | 0025| that provides a similar tax credit; | 0001| (2) "Indian land" means all land in New Mexico that | 0002| on March 1, 1997 was: | 0003| (a) within the exterior boundaries of an Indian | 0004| reservation or pueblo grant; or | 0005| (b) lands held in trust by the United States for | 0006| an individual Indian nation, tribe or pueblo; | 0007| (3) "new business" means a manufacturer or processor | 0008| that occupies a new business facility or a grower that commences | 0009| operation in New Mexico on or after July 1, 1997; and | 0010| (4) "new business facility" means a facility on | 0011| Indian land that satisfies the following requirements: | 0012| (a) the facility is employed by the taxpayer in | 0013| the operation of a revenue-producing enterprise. The facility shall | 0014| not be considered a "new business facility" in the hands of the | 0015| taxpayer if the taxpayer's only activity with respect to the facility | 0016| is to lease it to another person; | 0017| (b) the facility is acquired by or leased to the | 0018| taxpayer on or after January 1, 1997. The facility shall be deemed to | 0019| have been acquired by or leased to the taxpayer on or after the | 0020| specified date if the transfer of title to the taxpayer, the transfer | 0021| of possession pursuant to a binding contract to transfer title to the | 0022| taxpayer or the commencement of the term of the lease to the taxpayer | 0023| occurs on or after that date or if the facility is constructed, | 0024| erected or installed by or on behalf of the taxpayer, the | 0025| construction, erection or installation is completed on or after that | 0001| date; | 0002| (c) the facility is a newly acquired facility in | 0003| which the taxpayer is not continuing the operation of the same or a | 0004| substantially identical revenue-producing enterprise that previously | 0005| was in operation on the Indian land of the Indian nation, tribe or | 0006| pueblo where the facility is now located; a facility is a "newly | 0007| acquired facility" if the facility was acquired or leased by the | 0008| taxpayer from another person even if the facility was employed in a | 0009| revenue-producing enterprise on the Indian land of the same Indian | 0010| nation, tribe or pueblo immediately prior to the transfer of the title | 0011| to the facility to the taxpayer or immediately prior to the | 0012| commencement of the term of the lease of the facility to the taxpayer | 0013| by another person provided that the revenue-producing enterprise of | 0014| the previous occupant was not the same or substantially identical to | 0015| the taxpayer's revenue-producing enterprise; and | 0016| (d) the facility is not a replacement business | 0017| facility for a business facility that existed on the Indian land of | 0018| the Indian nation, tribe or pueblo where the business is now located. | 0019| D. The intergovernmental business tax credit shall be | 0020| determined separately for each reporting period and shall be equal to | 0021| fifty percent of the lesser of: | 0022| (1) the aggregate amount of tax paid by a taxpayer; | 0023| or | 0024| (2) the amount of the taxpayer's corporate income tax | 0025| due for the reporting period from the new business's activity | 0001| conducted on Indian land. | 0002| E. The department shall administer and interpret the | 0003| provisions of this section in accordance with the provisions of the | 0004| Tax Administration Act. | 0005| F. The burden of showing entitlement to a credit authorized | 0006| by this section is on the taxpayer claiming it, and the taxpayer shall | 0007| furnish to the appropriate tax collecting agency, in the manner | 0008| determined by the department, proof of payment of the aggregate amount | 0009| of tax on which the credit is based. | 0010| G. For a taxpayer qualifying for the credit provided by | 0011| this section that conducts business in New Mexico both on and off | 0012| Indian land, the taxpayer's corporate income tax liability derived | 0013| from the new business activity conducted on Indian land shall be equal | 0014| to the sum of the products of one-half of the taxpayer's New Mexico | 0015| corporate income tax liability before application of the credit | 0016| provided by this section multiplied by the payroll factor and one-half | 0017| of the taxpayer's New Mexico corporate income tax liability before | 0018| application of the credit provided by this section multiplied by the | 0019| property factor. The factors shall be determined as follows: | 0020| (1) the payroll factor is a fraction, the numerator | 0021| of which is the amount of compensation paid to employees employed | 0022| during the tax period by the taxpayer in his new business on Indian | 0023| land, and the denominator of which is the total amount of compensation | 0024| paid to employees employed during the tax period by the taxpayer in | 0025| all of New Mexico, including Indian land; and | 0001| (2) the property factor is a fraction, the numerator | 0002| of which is the average value of the taxpayer's real and tangible | 0003| personal property owned or rented and used in the new business on | 0004| Indian land in New Mexico during the tax period and the denominator of | 0005| which is the average value of all the taxpayer's real and tangible | 0006| property owned or rented and used in New Mexico, including on Indian | 0007| land, during the tax period." | 0008| Section 2. APPLICABILITY.--The provisions of this act apply to | 0009| taxable years beginning on or after January 1, 1997. | 0010| Section 3. EFFECTIVE DATE.--The effective date of the | 0011| provisions of this act is July 1, 1997. |