March 13, 2001
Mr. Speaker:
Your CONFERENCE COMMITTEE, to whom has been referred
SENATE FINANCE COMMITTEE SUBSTITUTE FOR
SENATE FINANCE COMMITTEE SUBSTITUTE FOR
SENATE BILL 124 AND SENATE BILLS 213, 343 & 43,
as amended
has had it under consideration and reports same with the following recommendations:
1. House Taxation and Revenue Committee Amendment 1 be APPROVED.
2. House Taxation and Revenue Committee Amendments 2 and 3 be DISAPPROVED.
and that the bill be amended further as follows:
3. On page 1, line 12, after the semicolon strike the remainder of the line and strike all of lines 13 and 14 and insert in lieu thereof:
"PROVIDING A ONE-TIME INCOME TAX REBATE FOR LOW- AND MIDDLE-INCOME FILERS; INCREASING THE LOW-INCOME COMPREHENSIVE TAX REBATE; CHANGING THE JOB MENTORSHIP TAX CREDIT FROM A PILOT PROGRAM TO A PERMANENT TAX CREDIT; PROVIDING A GROSS RECEIPTS TAX DEDUCTION FOR RECEIPTS OF A FRANCHISOR FOR CERTAIN SHARED EXPENSES AND FOR CERTAIN RECEIPTS OF A RESERVATION FUND OR AN ADVERTISING COOPERATIVE FROM FRANCHISORS OR FRANCHISEES; EXPANDING THE GROSS RECEIPTS TAX DEDUCTION FOR MEDICAL AND OTHER HEALTH SERVICES; AMENDING, REPEALING AND ENACTING SECTIONS OF THE NMSA 1978.".
4. On pages 1 through 23, strike Sections 1 through 6 in their entirety and insert in lieu thereof:
"Section 1. A new section of the Income Tax Act is enacted to read:
"[NEW MATERIAL] TAX REBATE.--
A. A resident who files an individual New Mexico income tax return for the taxable year beginning in 2001, who is not a dependent of another taxpayer and whose taxable income qualifies, may claim a rebate for a portion of gross receipts taxes paid in the following amount per return:
(1) for married individuals filing separate returns with taxable income that does not exceed thirty-two thousand dollars ($32,000), a rebate per return of thirty dollars ($30.00);
(2) for married individuals and surviving spouses filing joint returns with taxable income that does not exceed sixty-four thousand dollars ($64,000), a rebate per return of sixty dollars ($60.00);
(3) for single individuals with taxable income that does not exceed forty-two thousand dollars ($42,000), a rebate per return of thirty dollars ($30.00); and
(4) for individuals filing a head of household return with taxable income that does not exceed fifty-three thousand dollars ($53,000), a rebate per return of forty-five dollars ($45.00).
B. The tax rebate provided in Subsection A of this section may be deducted from the taxpayer's New Mexico income tax liability for the taxable year. If the tax rebate exceeds the taxpayer's income tax liability, the excess shall be refunded to the taxpayer.
C. As used in this section, "dependent" means "dependent" as defined in Section 152 of the Internal Revenue Code."
Section 2. Section 7-2-7 NMSA 1978 (being Laws 1994, Chapter 5, Section 20, as amended) is amended to read:
"7-2-7. INDIVIDUAL INCOME TAX RATES.--The tax imposed by
Section 7-2-3 NMSA 1978 shall be at the following rates for any
taxable year beginning [on or after January 1, 1998] in 2001:
A. For married individuals filing separate returns:
If the taxable income is: The tax shall be:
[Not over $4,000 1.7% of taxable income
Over $ 4,000 but not over $ 8,000 $ 68.00 plus 3.2% of
excess over $ 4,000
Over $ 8,000 but not over $ 12,000 $ 196 plus 4.7% of excess over $ 8,000
Over $ 12,000 but not over $ 20,000 $ 384 plus 6.0% of excess over $ 12,000
Over $ 20,000 but not over $ 32,000 $ 864 plus 7.1% of excess over $ 20,000
Over $ 32,000 but not over $ 50,000 $ 1,716 plus 7.9% of
excess over $ 32,000
Over $ 50,000 $ 3,138 plus 8.2% of excess over $ 50,000]
Not over $4,000 1.7% of taxable income
Over $ 4,000 but not over $ 8,000 $ 68.00 plus 3.2% of
excess over $ 4,000
Over $ 8,000 but not over $ 12,000 $ 196 plus 4.7% of
excess over $ 8,000
Over $ 12,000 but not over $ 20,000 $ 384 plus 6.0% of
excess over $ 12,000
Over $ 20,000 but not over $ 40,000 $ 864 plus 7.1% of
excess over $ 20,000
Over $ 40,000 $ 2,284 plus 7.8% of
excess over $ 40,000.
B. For surviving spouses and married individuals filing joint returns:
If the taxable income is: The tax shall be:
[Not over $8,000 1.7% of taxable income
Over $ 8,000 but not over $ 16,000 $ 136 plus 3.2% of excess over $ 8,000
Over $ 16,000 but not over $ 24,000 $ 392 plus 4.7% of excess over $ 16,000
Over $ 24,000 but not over $ 40,000 $ 768 plus 6.0% of excess over $ 24,000
Over $ 40,000 but not over $ 64,000 $ 1,728 plus 7.1% of excess over $ 40,000
Over $ 64,000 but not over $100,000 $ 3,432 plus 7.9% of excess over $ 64,000
Over $100,000 $ 6,276 plus 8.2% of
excess over $100,000]
Not over $8,000 1.7% of taxable income
Over $ 8,000 but not over $ 16,000 $ 136 plus 3.2% of excess over $ 8,000
Over $ 16,000 but not over $ 24,000 $ 392 plus 4.7% of excess over $ 16,000
Over $ 24,000 but not over $ 40,000 $ 768 plus 6.0% of excess over $ 24,000
Over $ 40,000 but not over $ 80,000 $ 1,728 plus 7.1% of excess over $ 40,000
Over $ 80,000 $ 4,568 plus 7.8% of
excess over $ 80,000.
C. For single individuals and for estates and trusts:
If the taxable income is: The tax shall be:
[Not over $5,500 1.7% of taxable income
Over $ 5,500 but not over $ 11,000 $ 93.50 plus 3.2% of excess over $ 5,500
Over $ 11,000 but not over $ 16,000 $ 269.50 plus 4.7% of excess over $ 11,000
Over $ 16,000 but not over $ 26,000 $ 504.50 plus 6.0% of excess over $ 16,000
Over $ 26,000 but not over $ 42,000 $1,104.50 plus 7.1% of excess over $ 26,000
Over $ 42,000 but not over $ 65,000 $2,240.50 plus 7.9% of excess over $ 42,000
Over $ 65,000 $4,057.50 plus 8.2% of
excess over $ 65,000]
Not over $5,500 1.7% of taxable income
Over $ 5,500 but not over $ 11,000 $ 93.50 plus 3.2% of excess over $ 5,500
Over $ 11,000 but not over $ 16,000 $ 269.50 plus 4.7% of excess over $ 11,000
Over $ 16,000 but not over $ 26,000 $ 504.50 plus 6.0% of excess over $ 16,000
Over $ 26,000 but not over $ 52,000 $ 1,104.50 plus 7.1% of excess over $ 26,000
Over $ 52,000 $ 2,950.50 plus 7.8% of
excess over $52,000.
D. For heads of household filing returns:
If the taxable income is: The tax shall be:
[Not over $7,000 1.7% of taxable income
Over $ 7,000 but not over $ 14,000 $ 119 plus 3.2% of
excess over $ 7,000
Over $ 14,000 but not over $ 20,000 $ 343 plus 4.7% of
excess over $ 14,000
Over $ 20,000 but not over $ 33,000 $ 625 plus 6.0% of
excess over $ 20,000
Over $ 33,000 but not over $ 53,000 $1,405 plus 7.1% of
excess over $ 33,000
Over $ 53,000 but not over $ 83,000 $2,825 plus 7.9% of
excess over $ 53,000
Over $ 83,000 $5,195 plus 8.2% of
excess over $ 83,000]
Not over $7,000 1.7% of taxable income
Over $ 7,000 but not over $ 14,000 $ 119 plus 3.2% of
excess over $ 7,000
Over $ 14,000 but not over $ 20,000 $ 343 plus 4.7% of
excess over $ 14,000
Over $ 20,000 but not over $ 33,000 $ 625 plus 6.0% of
excess over $ 20,000
Over $ 33,000 but not over $ 65,000 $1,405 plus 7.1% of
excess over $ 33,000
Over $ 65,000 $3,677 plus 7.8% of
excess over $ 65,000.
E. The tax on the sum of any lump-sum amounts included in net income is an amount equal to five multiplied by the difference between:
(1) the amount of tax due on the taxpayer's taxable income; and
(2) the amount of tax that would be due on an amount equal to the taxpayer's taxable income and twenty percent of the taxpayer's lump-sum amounts included in net income."
Section 3. Section 7-2-7 NMSA 1978 (being Laws 1994, Chapter 5, Section 20, as amended and as further amended by Section 2 of this act) is repealed and a new Section 7-2-7 NMSA 1978 is enacted to read:
"7-2-7. [NEW MATERIAL] INDIVIDUAL INCOME TAX RATES.--The tax imposed by Section 7-2-3 NMSA 1978 shall be at the following rates for any taxable year beginning on or after January 1, 2002:
A. For married individuals filing separate returns:
If the taxable income is: The tax shall be:
Not over $4,000 1.7% of taxable income
Over $ 4,000 but not over $ 8,000 $ 68.00 plus 3.2% of excess over $ 4,000
Over $ 8,000 but not over $ 12,000 $ 196 plus 4.7% of excess over $ 8,000
Over $ 12,000 but not over $ 20,000 $ 384 plus 6.0% of excess over $ 12,000
Over $ 20,000 but not over $ 50,000 $ 864 plus 7.1% of excess over $ 20,000
Over $ 50,000 $ 2,994 plus 7.7% of excess over $ 50,000.
B. For surviving spouses and married individuals filing joint returns:
If the taxable income is: The tax shall be:
Not over $8,000 1.7% of taxable income
Over $ 8,000 but not over $ 16,000 $ 136 plus 3.2% of excess over $ 8,000
Over $ 16,000 but not over $ 24,000 $ 392 plus 4.7% of excess over $ 16,000
Over $ 24,000 but not over $ 40,000 $ 768 plus 6.0% of excess over $ 24,000
Over $ 40,000 but not over $100,000 $ 1,728 plus 7.1% of excess over $ 40,000
Over $100,000 $ 5,988 plus 7.7% of
excess over $100,000.
C. For single individuals and for estates and
trusts:
If the taxable income is: The tax shall be:
Not over $5,500 1.7% of taxable income
Over $ 5,500 but not over $ 11,000 $ 93.50 plus 3.2% of excess over $ 5,500
Over $ 11,000 but not over $ 16,000 $ 269.50 plus 4.7% of excess over $ 11,000
Over $ 16,000 but not over $ 26,000 $ 504.50 plus 6.0% of excess over $ 16,000
Over $ 26,000 but not over $ 65,000 $1,104.50 plus 7.1% of excess over $ 26,000
Over $ 65,000 $3,873.50 plus 7.7% of
excess over $ 65,000.
D. For heads of household filing returns:
If the taxable income is: The tax shall be:
Not over $7,000 1.7% of taxable income
Over $ 7,000 but not over $ 14,000 $ 119 plus 3.2% of
excess over $ 7,000
Over $ 14,000 but not over $ 20,000 $ 343 plus 4.7% of
excess over $ 14,000
Over $ 20,000 but not over $ 33,000 $ 625 plus 6.0% of
excess over $ 20,000
Over $ 33,000 but not over $ 83,000 $1,405 plus 7.1% of
excess over $ 33,000
Over $ 83,000 $4,955 plus 7.7% of excess over $ 83,000.
E. The tax on the sum of any lump-sum amounts included in net income is an amount equal to five multiplied by the difference between:
(1) the amount of tax due on the taxpayer's taxable income; and
(2) the amount of tax that would be due on an amount equal to the taxpayer's taxable income and twenty percent of the taxpayer's lump-sum amounts included in net income."
Section 4. Section 7-2-12 NMSA 1978 (being Laws 1965, Chapter 202, Section 10, as amended) is amended to read:
"7-2-12. TAXPAYER RETURNS--PAYMENT OF TAX.--
A. Every resident of this state and every
individual deriving income from any business transaction,
property or employment within this state and not exempt from
tax under the Income Tax Act [who] shall file a complete tax
return with the department in form and content as prescribed
by the secretary if the individual is required by the laws of
the United States to file a federal income tax return [shall
file a complete tax return with the department in form and
content as prescribed by the secretary] or files a federal
income tax return.
B. Unless otherwise required under the Income Tax Act or prescription of the secretary, in completing a return for a taxable year, the taxpayer shall declare the same filing status and number of personal exemptions as the taxpayer declared for federal income tax purposes for that same taxable year or, if the taxpayer was not required to file a federal income tax return for the taxable year, the filing status and number of personal exemptions that would have been required or allowed for that taxpayer by the Internal Revenue Code and regulations thereunder for the taxable year.
C. The return required and the tax imposed on individuals under the Income Tax Act are due and payment is required on or before the fifteenth day of the fourth month following the end of the taxable year."
Section 5. Section 7-2-14 NMSA 1978 (being Laws 1972, Chapter 20, Section 2, as amended) is amended to read:
"7-2-14. LOW-INCOME COMPREHENSIVE TAX REBATE.--
A. Except as otherwise provided in Subsection B of this section, any resident who files an individual New Mexico income tax return and who is not a dependent of another individual may claim a tax rebate for a portion of state and local taxes to which the resident has been subject during the taxable year for which the return is filed. The tax rebate may be claimed even though the resident has no income taxable under the Income Tax Act. A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the tax rebate that would have been allowed on a joint return.
B. No claim for the tax rebate provided in this section shall be filed by a resident who was an inmate of a public institution for more than six months during the taxable year for which the tax rebate could be claimed or who was not physically present in New Mexico for at least six months during the taxable year for which the tax rebate could be claimed.
C. For the purposes of this section, the total number of exemptions for which a tax rebate may be claimed or allowed is determined by adding the number of federal exemptions allowable for federal income tax purposes for each individual included in the return who is domiciled in New Mexico plus:
(1) two additional exemptions for each
individual domiciled in New Mexico included in the return who
is sixty-five years of age or older; [plus]
(2) one additional exemption for each
individual domiciled in New Mexico included in the return who,
for federal income tax purposes, is blind; [plus one
exemption]
(3) two additional exemptions for each minor child or stepchild of the resident; and
(4) three exemptions for each minor child
or stepchild of the resident who would be a dependent for federal income tax purposes if the public assistance contributing to the support of the child or stepchild was considered to have been contributed by the resident.
D. The tax rebate provided for in this section may be claimed in the amount shown in the following table:
Modified gross And the total number
income is: of exemptions is:
But Not 6 or Over Over 1 2 3 4 5 More
[$ 0 $ 500 $ 120 $ 160 $ 200 $ 240 $ 280 $ 320
500 1,000 135 195 250 310 350 415
1,000 1,500 135 195 250 310 350 435
1,500 2,000 135 195 250 310 350 450
2,000 2,500 135 195 250 310 350 450
2,500 3,000 135 195 250 310 350 450
3,000 3,500 135 195 250 310 350 450
3,500 4,000 135 195 250 310 355 450
4,000 4,500 135 195 250 310 355 450
4,500 5,000 125 190 240 305 355 450
5,000 5,500 115 175 230 295 355 430
5,500 6,000 105 155 210 260 315 410
6,000 7,000 90 130 170 220 275 370
7,000 8,000 80 115 145 180 225 295
8,000 9,000 70 105 135 170 195 240
9,000 10,000 65 95 115 145 175 205
10,000 11,000 60 80 100 130 155 185
11,000 12,000 55 70 90 110 135 160
12,000 13,000 50 65 85 100 115 140
13,000 14,000 50 65 85 100 115 140
14,000 15,000 45 60 75 90 105 120
15,000 16,000 40 55 70 85 95 110
16,000 17,000 35 50 65 80 85 105
17,000 18,000 30 45 60 70 80 95
18,000 19,000 25 35 50 60 70 80
19,000 20,000 20 30 40 50 60 65
20,000 21,000 15 25 30 40 50 55
21,000 22,000 10 20 25 35 40 45]
$ 0 $ 500 $ 140 $ 185 $ 230 $ 280 $ 325 $ 370
500 1,000 155 225 290 360 410 500
1,000 1,500 155 225 290 360 410 510
1,500 2,000 155 225 290 360 410 520
2,000 2,500 155 225 290 360 410 520
2,500 3,000 155 225 290 360 410 520
3,000 3,500 155 225 290 360 410 520
3,500 4,000 155 225 290 360 410 520
4,000 4,500 155 225 290 360 410 520
4,500 5,000 145 220 280 355 410 520
5,000 5,500 135 205 265 340 410 495
5,500 6,000 125 180 245 300 365 475
6,000 7,000 105 150 200 255 320 430
7,000 8,000 95 135 170 210 260 340
8,000 9,000 85 125 155 200 225 280
9,000 10,000 75 110 135 170 205 240
10,000 11,000 70 95 115 150 180 215
11,000 12,000 65 85 105 130 155 185
12,000 13,000 60 75 100 115 135 165
13,000 14,000 60 75 100 115 135 165
14,000 15,000 55 70 90 105 125 140
15,000 16,000 50 65 85 100 110 130
16,000 17,000 40 60 75 95 100 125
17,000 18,000 35 55 70 85 95 110
18,000 19,000 30 40 60 70 85 95
19,000 20,000 25 35 50 60 70 75
20,000 21,000 20 30 35 50 60 65
21,000 22,000 15 25 30 40 50 55.
E. If a taxpayer's modified gross income is zero, the taxpayer may claim a credit in the amount shown in the first row of the table appropriate for the taxpayer's number of exemptions.
F. The tax rebates provided for in this section may be deducted from the taxpayer's New Mexico income tax liability for the taxable year. If the tax rebates exceed the taxpayer's income tax liability, the excess shall be refunded to the taxpayer.
G. For purposes of this section, "dependent" means "dependent" as defined by Section 152 of the Internal Revenue Code of 1986, as that section may be amended or renumbered, but also includes any minor child or stepchild of the resident who would be a dependent for federal income tax purposes if the public assistance contributing to the support of the child or stepchild was considered to have been contributed by the resident."
Section 6. Section 7-2-18.6 NMSA 1978 (being Laws 1999, Chapter 217, Section 1) is amended to read:
"7-2-18.6. JOB MENTORSHIP TAX CREDIT.--
A. To encourage New Mexico businesses to hire youth participating in certified school-to-career programs, any taxpayer who files an individual New Mexico income tax return, who is not a dependent of another individual and who is the owner of a New Mexico business may claim a credit in an amount equal to fifty percent of gross wages paid to qualified students who are employed by the business during the taxable year for which the return is filed. The tax credit may be known as the "job mentorship tax credit".
B. A taxpayer who is the owner of a New Mexico business may claim the credit provided in this section for each taxable year in which the business employs one or more qualified students. The maximum aggregate credit allowable shall not exceed fifty percent of the gross wages paid to not more than ten qualified students employed by the business for up to three hundred twenty hours of employment of each qualified student in each taxable year for a maximum of three taxable years for each qualified student. In no event shall a taxpayer claim a credit in excess of twelve thousand dollars ($12,000) in any taxable year. The taxpayer shall certify that hiring the qualified student does not displace or replace a current employee.
C. [The number of qualified students whose employment
qualifies for a job mentorship tax credit pursuant to this
section or the Corporate Income and Franchise Tax Act shall be
limited to a pilot program of one thousand qualified students in
any calendar year.] The department shall allocate annually to
the state school-to-work director [one thousand pilot program]
certificates that shall be distributed by the state school-to-work director to administrators of certified school-to-career
programs. The [pilot program] certificates, when properly
executed, shall serve as evidence of the taxpayer's eligibility
for the job mentorship tax credit. The maximum number of [pilot
program] certificates that may be issued to a single school-to-career program administrator is equal to the number of qualified
school-to-career participants in that program on May 1 of the
current calendar year. The [pilot program] certificates shall be
issued in the order in which they are requested. To claim the
credit pursuant to this section, the taxpayer must submit with
respect to each employee for whom the credit is claimed:
(1) a properly executed [pilot program]
certificate;
(2) information required by the secretary with respect to the employee's employment by the business during the taxable year for which the credit is claimed; and
(3) information required by the secretary that the employee was not also employed in the same taxable year by another New Mexico business qualifying for and claiming a job mentorship tax credit for that employee pursuant to this section or the Corporate Income and Franchise Tax Act.
D. The credit provided pursuant to this section may only be deducted from the taxpayer's New Mexico income tax liability for the taxable year. Any portion of the maximum tax credit provided by this section that remains unused at the end of the taxpayer's taxable year may be carried forward for three consecutive taxable years; provided the total tax credits claimed under this section shall not exceed the maximum allowable pursuant to Subsection B of this section.
E. A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the credit that would have been allowed on a joint return.
F. A taxpayer who otherwise qualifies for and claims a job mentorship tax credit for employment of qualified students by a partnership, limited partnership, limited liability company, S corporation or other business association of which the taxpayer is a member may claim a credit only in proportion to his interest in the partnership, limited partnership, limited liability company, S corporation or association. The total credit claimed by all members of the business shall not exceed the maximum tax credit allowable pursuant to Subsection B of this section.
G. As used in this section:
(1) "certified school-to-career program" means a summer employment program certified by the state school-to-work office as a school-to-career program designed for secondary school students to create academic and career goals and objectives and find employment in a job meeting those goals and objectives;
(2) "New Mexico business" means a partnership, limited partnership, limited liability company treated as a partnership for federal income tax purposes, S corporation or sole proprietorship that carries on a trade or business in New Mexico and that employs in New Mexico less than three hundred full-time employees at any one time during the taxable year; and
(3) "qualified student" means an individual who is at least fourteen years of age but not more than twenty-one years of age who is attending full time an accredited New Mexico secondary school and who is a participant in a certified school-to-career program."
Section 7. Section 7-2A-17 NMSA 1978 (being Laws 1999, Chapter 217, Section 2) is amended to read:
"7-2A-17. JOB MENTORSHIP TAX CREDIT.--
A. To encourage New Mexico businesses to hire youth participating in certified school-to-career programs, any taxpayer who is a New Mexico business and who files a corporate income tax return may claim a credit in an amount equal to fifty percent of gross wages paid to qualified students who are employed by the taxpayer during the taxable year for which the return is filed. The tax credit may be known as the "job mentorship tax credit".
B. A taxpayer may claim the credit provided in this section for each taxable year in which the taxpayer employs one or more qualified students. The maximum aggregate credit allowable shall not exceed fifty percent of the gross wages paid to not more than ten qualified students employed by the taxpayer for up to three hundred twenty hours of employment of each qualified student in each taxable year for a maximum of three taxable years for each qualified student. In no event shall a taxpayer claim a credit in excess of twelve thousand dollars ($12,000) in any taxable year. The employer shall certify that hiring the qualified student does not displace or replace a current employee.
C. [The number of qualified students whose employment
qualifies for a job mentorship tax credit pursuant to this
section or the Income Tax Act shall be limited to a pilot program
of one thousand qualified students in any calendar year.] The
department shall allocate annually to the state school-to-work
director [one thousand pilot program] certificates that shall be
distributed by the state school-to-work director to
administrators of certified school-to-career programs. The
[pilot program] certificates, when properly executed, shall serve
as evidence of the taxpayer's eligibility for the job mentorship
tax credit. The maximum number of [pilot program] certificates
that may be issued to a single school-to-career program
administrator is equal to the number of qualified school-to-career participants in that program on May 1 of the current
calendar year. The [pilot program] certificates shall be issued
in the order in which they are requested. To claim the credit
under this section, the taxpayer must submit with respect to each
employee for whom the credit is claimed:
(1) a properly executed [pilot program]
certificate;
(2) information required by the secretary with respect to the employee's employment by the taxpayer during the taxable year for which the credit is claimed; and
(3) information required by the secretary that the employee was not also employed in the same taxable year by another New Mexico business qualifying for and claiming a job mentorship tax credit for that employee pursuant to this section or the Income Tax Act.
D. The credit provided [under] pursuant to this
section may only be deducted from the taxpayer's corporate income
tax liability for the taxable year. Any portion of the maximum
tax credit provided by this section that remains unused at the
end of the taxpayer's taxable year may be carried forward for
three consecutive taxable years; provided the total tax credits
claimed [under] pursuant to this section shall not exceed the
maximum allowable under Subsection B of this section.
E. As used in this section:
(1) "certified school-to-career program" means a summer employment program certified by the state school-to-work office as a school-to-career program designed for secondary school students to create academic and career goals and objectives and find employment in a job meeting those goals and objectives;
(2) "New Mexico business" means a corporation that carries on a trade or business in New Mexico and that employs in New Mexico less than three hundred full-time employees during the taxable year; and
(3) "qualified student" means an individual who is at least fourteen years of age but not more than twenty-one years of age who is attending full time an accredited New Mexico secondary school and who is a participant in a certified school-to-career program."
Section 8. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:
"[NEW MATERIAL] DEDUCTION--GROSS RECEIPTS TAX--FRANCHISORS AND FRANCHISEES--CERTAIN SHARED EXPENSES AND COOPERATIVE ADVERTISING RECEIPTS.--
A. Receipts of a reservation fund from a franchisor or its franchisees for the purpose of developing, maintaining or modifying a reservation system are deductible from gross receipts. Such receipts must be used by the fund for the primary purposes of developing, operating, maintaining or modifying a reservation system for the benefit of the franchisor or franchisees that make payment to the fund.
B. Receipts of a franchisor engaged in the hospitality industry from a franchisee for the purpose of reimbursing a franchisor for payments made by the franchisor to travel agents for commission earned for booking a guest in the franchisee's facility are deductible from gross receipts.
C. Receipts of a franchisor engaged in the hospitality industry from a franchisee for the purpose of reimbursing a franchisor for the costs of providing training off the franchisee's premises to a franchisee and its employees regarding procedures required for compliance with the franchise agreement are deductible from gross receipts.
D. Receipts of an advertising cooperative from franchisors or franchisees are deductible from gross receipts. Such receipts must be used by the advertising cooperative for the primary purpose of procuring advertising or marketing services for the benefit of the members that make payments to it.
E. For the purposes of this section:
(1) "advertising cooperative" means any form of pooling of funds or other cost-sharing arrangement that is contractually or otherwise limited to expending the funds only on advertising and marketing, including:
(a) any form of escrow, actual or constructive trust or segregated account; or
(b) any entity that directly or indirectly derives receipts from its members or other contributors for the primary purpose of procuring advertising or marketing services for the benefit of the members;
(2) "hospitality industry" means a hotel, motel, resort or similar facility that provides accommodations for overnight stays; and
(3) "reservation fund" means any form of pooling of funds or other cost-sharing arrangements in which a franchisor is contractually or otherwise limited to expending the funds for the primary purposes of developing, operating, maintaining and modifying a reservation system, including:
(a) any form of escrow, actual or constructive trust or segregated account maintained by a franchisor; or
(b) any entity designated by a franchisor that directly or indirectly derives receipts from a franchisor
or its franchisees for the primary purposes of developing, operating, maintaining or modifying a reservation system for the benefit of the franchisor or its franchisees."
Section 9. Section 7-9-77.1 NMSA 1978 (being Laws 1998, Chapter 96, Section 1, as amended) is amended to read:
"7-9-77.1. DEDUCTION--GROSS RECEIPTS TAX--CERTAIN MEDICAL AND HEALTH CARE SERVICES.--
A. Receipts of any person from payments by the United
States government or any agency thereof for provision of medical
and other health services, [by medical doctors and osteopaths or
of medical, other health and palliative services by a] hospice
care or home health services to medicare beneficiaries pursuant
to the provisions of Title [XVIII] 18 of the federal Social
Security Act may be deducted from gross receipts.
B. Receipts from payments by a third-party administrator of the federal TRICARE program for provision of medical and other health services by medical doctors and osteopathic physicians to covered beneficiaries may be deducted from gross receipts.
[B.] C. For the purposes of this section:
[(1) "hospice" means a for-profit entity
licensed and certified by the department of health as a hospice;
and]
(1) "home health services" means "home health services" as defined in 42 USCA 1395x(m) for purposes of Title 18 of the federal Social Security Act;
(2) "hospice care" means "hospice care" as defined in 42 USCA 1395x(dd) for purposes of Title 18 of the federal Social Security Act;
(3) "medical and other health services" means "medical and other health services" as defined in 42 USCA 1395x(s) for purposes of Title 18 of the federal Social Security Act;
[(2)] (4) "medical [doctors and osteopaths]
doctor" means [persons] a person licensed as a physician to
practice [under Section 61-6-11 or 61-10-11 NMSA 1978] medicine
pursuant to the provisions of the Medical Practice Act;
(5) "osteopathic physician" means a person licensed as an osteopathic physician pursuant to the provisions of Chapter 61, Article 10 NMSA 1978; and
(6) "TRICARE program" means the program defined in 10 USCA 1072(7)."
Section 10. REPEAL.--Laws 1999, Chapter 217, Section 4 is repealed.
Section 11. APPLICABILITY.--
A. The provisions of Sections 4 through 7 of this act apply to taxable years beginning on or after January 1, 2001.
B. The provisions of Sections 1 and 2 of this act apply to taxable years beginning in 2001.
C. The provisions of Section 3 of this act apply to taxable years beginning on or after January 1, 2002.
Section 12. EFFECTIVE DATE.--
A. The effective date of the provisions of Sections 8 through 10 of this act is July 1, 2001.
B. The effective date of the provisions of Section 3 of this act is January 1, 2002.".
Respectfully submitted,
_____________________________
Donald Whitaker
_____________________________
Daniel P. Silva
_____________________________
Pauline K. Gubbels
Adopted____________________ Not Adopted_____________________
(Chief Clerk) (Chief Clerk)
Date ______________