0001|                            SENATE BILL 86
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0002|     43RD LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 1998
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0003|                            INTRODUCED BY
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0004|                          ROMAN M. MAES III
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0005|     
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0006|                                   
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0007|     
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0008|     FOR THE ECONOMIC DEVELOPMENT, SCIENCE AND TECHNOLOGY COMMITTEE
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0009|     
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0010|                                AN ACT
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0011|     RELATING TO TAXATION; PROVIDING DEDUCTIONS FROM GROSS RECEIPTS
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0012|     FOR SALES OF CONSTRUCTION MATERIALS, CONSTRUCTION SERVICES,
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0013|     EQUIPMENT AND INSTALLATION SERVICES FOR USE IN NEW OR EXPANDED
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0014|     MANUFACTURING OPERATIONS.
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0015|     
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0016|     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0017|          Section 1.  A new section of the Gross Receipts and
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0018|     Compensating Tax Act is enacted to read:
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0019|           "[<u>NEW MATERIAL</u>]  DEDUCTION--GROSS RECEIPTS TAX--SALE
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0020|     OF CERTAIN SERVICES, MATERIALS AND EQUIPMENT FOR MANUFACTURING
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0021|     OPERATIONS--DEFINITIONS.--
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0022|               A.  Receipts from the sale of construction services
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0023|     to expand existing or construct new facilities for a
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0024|     manufacturing operation located in New Mexico may be deducted
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0025|     from gross receipts if the construction service is sold to a
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<center>- 1 -</center>

0001|     person who delivers a nontaxable transaction certificate to
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0002|     the person performing the construction service.
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0003|               B.  Receipts from the sale of construction
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0004|     materials purchased for use to expand existing or construct
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0005|     new facilities for a manufacturing operation located in New
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0006|     Mexico may be deducted from gross receipts if the materials
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0007|     are sold to a person who delivers a nontaxable transaction
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0008|     certificate to the person selling the materials.
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0009|               C.  Receipts from the sale of equipment purchased
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0010|     for use in a new or expanded manufacturing operation located
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0011|     in New Mexico may be deducted from gross receipts if the
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0012|     equipment is sold to a person who delivers a nontaxable
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0013|     transaction certificate to the person selling the equipment.
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0014|               D.  Receipts from the sale of installation services
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0015|     necessary to install equipment in a new or expanded
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0016|     manufacturing operation located in New Mexico may be deducted
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0017|     from gross receipts if the installation service is sold to a
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0018|     person who delivers a nontaxable transaction certificate to
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0019|     the person performing the installation service.
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0020|               E.  As used in this section:
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0021|                    (1)  "construction service" means a service
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0022|     necessary to construct or expand a manufacturing operation;
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0023|                    (2)  "equipment" means equipment necessary to
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0024|     conduct a new or expanded manufacturing operation;
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0025|                    (3)  "installation service" means a service
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<center>- 2 -</center>

0001|     required to install and make operational equipment necessary
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0002|     to conduct a manufacturing operation; and 
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0003|                    (4)  "manufacturing operation" means a plant
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0004|     employing personnel to perform production or assembly tasks to
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0005|     produce goods; 
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0006|               F.  Election by a taxpayer to deliver the
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0007|     nontaxable transaction certificate necessary to support a
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0008|     deduction from gross receipts pursuant to the provisions of
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0009|     this section shall preclude availability to that taxpayer of
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0010|     the investment credit that would be available on the same
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0011|     equipment pursuant to the provisions of the Investment Credit
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0012|     Act."
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0013|          Section 2.  EFFECTIVE DATE.--The effective date of the
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0014|     provisions of this act is July 1, 1998.
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0015|                               
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