SENATE BILL 116

51st legislature - STATE OF NEW MEXICO - first session, 2013

INTRODUCED BY

John Arthur Smith

FOR THE REVENUE STABILIZATION AND TAX POLICY COMMITTEE

AN ACT

RELATING TO TAXATION; INCREASING THE VOLUME LIMIT FOR SMALL WINEGROWERS; INCREASING THE LIQUOR EXCISE TAX RATE FOR SMALL WINEGROWERS PRODUCING OVER A CERTAIN AMOUNT OF WINE.

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

     SECTION 1. Section 7-17-2 NMSA 1978 (being Laws 1966, Chapter 49, Section 2, as amended) is amended to read:

     "7-17-2. DEFINITIONS.--As used in the Liquor Excise Tax Act:

          A. "alcoholic beverages" means distilled or rectified spirits, potable alcohol, brandy, whiskey, rum, gin, aromatic bitters or any similar beverage, including blended or fermented beverages, dilutions or mixtures of one or more of the foregoing containing more than one-half of one percent alcohol by volume, but "alcoholic beverages" does not include medicinal bitters;

          B. "beer" means an alcoholic beverage obtained by the fermentation of any infusion or decoction of barley, malt and hops or other cereals in water and includes porter, beer, ale and stout;

          C. "cider" means an alcoholic beverage made from the normal alcoholic fermentation of the juice of sound, ripe apples that contains not less than one-half of one percent of alcohol by volume and not more than seven percent of alcohol by volume;

          D. "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;

          E. "fortified wine" means wine containing more than fourteen percent alcohol by volume when bottled or packaged by the manufacturer, but "fortified wine" does not include:

                (1) wine that is sealed or capped by cork closure and aged two years or more;

                (2) wine that contains more than fourteen percent alcohol by volume solely as a result of the natural fermentation process and that has not been produced with the addition of wine spirits, brandy or alcohol; or

                (3) vermouth and sherry; 

          F. "microbrewer" means a person who produces [fewer] less than five thousand barrels of beer in a year;

          G. "person" includes, to the extent permitted by law, a federal, state or other governmental unit or subdivision or an agency, department, institution or instrumentality thereof;

          H. "small winegrower" means a winegrower who produces [fewer than nine hundred fifty thousand] less than one million five hundred thousand liters of wine in a year;

          I. "spirituous liquor" means alcoholic beverages, except fermented beverages such as wine, beer, cider and ale;

          J. "wholesaler" means a person holding a license issued under Section 60-6A-1 NMSA 1978 or a person selling alcoholic beverages that were not purchased from a person holding a license issued under Section 60-6A-1 NMSA 1978;

          K. "wine" means an alcoholic beverage other than cider that is obtained by the fermentation of the natural sugar contained in fruit or other agricultural products, with or without the addition of sugar or other products, and that does not contain more than twenty-one percent alcohol by volume; and

          L. "winegrower" means a person licensed pursuant to Section 60-6A-11 NMSA 1978."

     SECTION 2. Section 7-17-5 NMSA 1978 (being Laws 1993, Chapter 65, Section 8, as amended) is amended to read:

     "7-17-5. IMPOSITION AND RATE OF LIQUOR EXCISE TAX.--

          A. There is imposed on a wholesaler who sells alcoholic beverages on which the tax imposed by this section has not been paid an excise tax, to be referred to as the "liquor excise tax", at the following rates on alcoholic beverages sold:

                (1) on spirituous liquors, one dollar sixty cents ($1.60) per liter;

                (2) on beer, except as provided in Paragraph

(5) of this subsection, forty-one cents ($.41) per gallon;

                (3) on wine, except as provided in Paragraphs (4) and (6) of this subsection, forty-five cents ($.45) per liter;

                (4) on fortified wine, one dollar fifty cents ($1.50) per liter;

                (5) on beer manufactured or produced by a microbrewer and sold in this state, provided that proof is furnished to the department that the beer was manufactured or produced by a microbrewer, eight cents ($.08) per gallon;

                (6) on wine manufactured or produced by a small winegrower and sold in this state, provided that proof is furnished to the department that the wine was manufactured or produced by a small winegrower:

                     (a) ten cents ($.10) per liter on the first eighty thousand liters sold [and];

                     (b) twenty cents ($.20) per liter on [all liters] each liter sold over eighty thousand liters but [less than] not over nine hundred fifty thousand liters; and

                     (c) thirty cents ($.30) per liter on each liter sold over nine hundred fifty thousand liters but not over one million five hundred thousand liters; and

                (7) on cider, forty-one cents ($.41) per gallon.

          B. The volume of wine transferred from one winegrower to another winegrower for processing, bottling or storage and subsequent return to the transferor shall be excluded pursuant to Section 7-17-6 NMSA 1978 from the taxable volume of wine of the transferee. Wine transferred from an initial winegrower to a second winegrower remains a tax liability of the transferor, provided that if the wine is transferred to the transferee for the transferee's use or for resale, the transferee then assumes the liability for the tax due pursuant to this section.

          C. A transfer of wine from a winegrower to a wholesaler for distribution of the wine transfers the liability for payment of the liquor excise tax to the wholesaler upon the sale of the wine by the wholesaler."

     SECTION 3. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2013.

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