45th legislature - STATE OF NEW MEXICO - second session, 2002

AN ACT

RELATING TO TAXATION; ENACTING THE NANOTECHNOLOGY INDUSTRY INCENTIVE ACT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. SHORT TITLE.--This act may be cited as the "Nanotechnology Industry Incentive Act".

Section 2. PURPOSE OF ACT.--It is the purpose of the Nanotechnology Industry Incentive Act to provide a favorable tax climate to start nanotechnology businesses in New Mexico, thereby promoting increased employment, higher wages and a broader tax base in New Mexico.

Section 3. DEFINITIONS.--As used in the Nanotechnology Industry Incentive Act:

A. "business" means a corporation, general partnership, limited partnership, limited liability company, sole proprietorship or other similar entity;

B. "department" means the taxation and revenue department, the secretary of taxation and revenue or any employee of the department exercising authority lawfully delegated to that employee by the secretary;

C. "nanotechnology" means products, materials and services based on feature sizes of one hundred microns or less; "nanotechnology" products consist of integrated systems or their constituent elements, that have the capability to sense their environments, calculate appropriate responses, take electronic or mechanical actions, communicate with other nanotechnology products and power themselves;

D. "qualified business" means a business that has made qualified expenditures for the relevant period of at least twenty percent of its total revenues for that period;

E. "qualified expenditure" means an expenditure by a taxpayer in connection with qualified research using or developing nanotechnology, but does not include any expenditure on property that is owned by a municipality or county in connection with an industrial revenue bond project or property for which the taxpayer has received any credit pursuant to the Capital Equipment Tax Credit Act, the Investment Credit Act or the Technology Jobs Tax Credit Act;

F. "qualified research" means research:

(1) that is undertaken to develop or expand nanotechnology for the purpose of discovering information:

(a) that is technological in nature; and

(b) the application of which is intended to be useful in the development of a new or improved business component of the taxpayer; or

(2) in which substantially all activities constitute elements of a process of experimentation related to product development, new or improved function, performance, reliability or quality, but not related to style, taste, cosmetic or seasonal design factors; and

G. "taxpayer" means a person liable for payment of any tax, a person responsible for withholding and payment or collection and payment of any tax or a person to whom an assessment has been made if the assessment remains unabated or the amount thereof has not been paid.

Section 4. ADMINISTRATION OF THE ACT.--The department shall administer the Nanotechnology Industry Incentive Act pursuant to the Tax Administration Act.

Section 5. CREDIT--AMOUNT--CLAIMANT.--The credit provided by the Nanotechnology Industry Incentive Act is an amount equal to any gross receipts taxes, compensating taxes or withholding taxes due to the state paid or payable by a taxpayer with respect to a qualified business.

Section 6. ELIGIBILITY REQUIREMENTS.--A taxpayer may claim a credit pursuant to the Nanotechnology Industry Incentive Act for a period ending fifty-nine consecutive calendar months after the first calendar month for which a claim for the credit is made, but may not claim the credit for a calendar month:

A. before July 2002;

B. that is more than fifty-nine consecutive calendar months after the first month for which a claim for the credit is made by the taxpayer or by a person to whom the taxpayer is a successor, pursuant to Section 7-1-61 NMSA 1978;

C. after which the qualified business employs more than two hundred employees on a full-time-equivalent basis; or

D. in a fiscal year of the qualified business after the first fiscal year in which that business has total revenues in excess of twenty-five million dollars ($25,000,000); or

E. in which the business was not a qualified business.

Section 7. CLAIMING THE CREDIT FOR CERTAIN TAXES.--

A. A taxpayer shall apply for approval of a credit pursuant to the Nanotechnology Industry Incentive Act within one year after the end of the calendar month for which the credit is claimed.

B. A taxpayer who has applied for and been granted approval for a credit pursuant to the Nanotechnology Industry Incentive Act may claim the amount of the credit against the taxpayer's gross receipts tax, compensating tax or withholding tax due to the state; provided that no taxpayer may claim an amount of credit for a reporting period that exceeds the sum of the taxpayer's gross receipts tax, compensating tax and withholding tax for that period.

C. A credit pursuant to the Nanotechnology Industry Incentive Act not claimed against the taxpayer's gross receipts tax, compensating tax or withholding tax due for a reporting period may be claimed in subsequent reporting periods.

Section 8. CREDIT CLAIM FORMS.--The department shall provide credit claim forms for the Nanotechnology Industry Incentive Act credit. A credit claim form shall accompany any return in which the taxpayer applies for an approved credit, and the claim shall specify the amount of credit intended to apply to each return.

Section 9. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2002.