0001|                         SENATE BILL 50
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0002|     42ND LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION,
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0003|     1996
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0004|                         INTRODUCED BY
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0005|                        MANNY M. ARAGON
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0006|     
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0007|                                
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0008|     
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0009|     
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0010|     
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0011|                             AN ACT
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0012|     RELATING TO TAXATION; AMENDING THE INCOME TAX ACT TO REQUIRE
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0013|     ESTIMATED INCOME TAX PAYMENTS OF CERTAIN TAXPAYERS; ENACTING A
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0014|     NEW SECTION OF THE NMSA 1978.
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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 Income Tax Act is enacted
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0018|     to read:
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0019|       "[<u>NEW MATERIAL</u>]  ESTIMATED TAX DUE--PAYMENT OF ESTIMATED
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0020|     TAX--PENALTY.--
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0021|            A.  Except as otherwise provided in this section,
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0022|     every individual who is required to file an income tax return
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0023|     under the Income Tax Act shall pay the required annual payment
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0024|     in installments.  The amount of any required installment shall 
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0025|     be twenty-five percent of the required annual payment.
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0001|            B.  For the purposes of this section:
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0002|                 (1)  "required annual payment" means the lesser
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0003|     of:
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0004|                      (a)  ninety percent of the tax shown on
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0005|     the return of the taxable year or, if no return is filed, ninety
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0006|     percent of the tax for the taxable year; or
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0007|                      (b)  one hundred percent of the tax shown
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0008|     on the return for the preceding taxable year if the preceding
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0009|     taxable year was a taxable year of twelve months and the
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0010|     taxpayer filed a tax return for that preceding taxable year; and
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0011|                 (2)  "tax" means the tax imposed under Section
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0012|     7-2-3 NMSA 1978 less any amount allowed for credits provided by
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0013|     Sections 7-2-13 and 7-2-18.1 through 7-2-18.4 NMSA 1978 and for
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0014|     any applicable tax rebates provided by the Income Tax Act.
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0015|            C.  There shall be four required installments for
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0016|     each taxable year.  For taxpayers reporting on a calendar year
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0017|     basis, the due dates for the installments are April 15, June 15,
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0018|     September 15 and January 15 of the following taxable year.  For
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0019|     taxpayers reporting on a fiscal year other than a calendar year,
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0020|     the due dates for the installments are the fifteenth day of the
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0021|     fourth, sixth and ninth months of the fiscal year and the
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0022|     fifteenth day of the first month following the fiscal year.
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0023|            D.  For the purposes of applying this section, the
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0024|     amount of tax deducted and withheld with respect to a taxpayer
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0025|     under the Withholding Tax Act shall be deemed a payment of
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0001|     estimated tax.  An equal part of the amount of withheld tax
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0002|     shall be deemed paid on each due date for the applicable taxable
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0003|     year unless the taxpayer establishes the dates on which all
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0004|     amounts were actually withheld, in which case the amounts
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0005|     withheld shall be deemed payments of estimated tax on the dates
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0006|     on which the amounts were actually withheld.  The taxpayer may
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0007|     apply the provisions of this subsection separately to wage
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0008|     withholding and any other amounts withheld under the Withholding
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0009|     Tax Act.
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0010|            E.  Except as otherwise provided in this section, in
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0011|     the case of any underpayment of estimated tax by a taxpayer,
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0012|     there shall be added to the tax an amount as penalty determined
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0013|     by applying the rate specified in Subsection B of Section 7-1-67
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0014|     NMSA 1978 to the amount of the underpayment for the period of
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0015|     the underpayment, provided:
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0016|                 (1)  the amount of the underpayment shall be the
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0017|     excess of the amount of the required installment over the
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0018|     amount, if any, of the installment paid on or before the due
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0019|     date for the installment;
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0020|                 (2)  the period of the underpayment runs from
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0021|     the due date for the installment to whichever of the following
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0022|     dates is earlier:
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0023|                      (a)  the fifteenth day of the fourth month
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0024|     following the close of the taxable year; or
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0025|                      (b)  with respect to any portion of the
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0001|     underpayment, the date on which the portion was paid; and
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0002|                 (3)  for the purposes of Subparagraph (b) of
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0003|     Paragraph (2) of this subsection, a payment of estimated tax
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0004|     shall be credited against unpaid required installments in the
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0005|     order in which the installments are required to be paid.
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0006|            F.  No penalty shall be imposed under Subsection E of
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0007|     this section for any taxable year if:
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0008|                 (1)  the difference between the following is
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0009|     less than five hundred dollars ($500):
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0010|                      (a)  the tax shown on the return for the
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0011|     taxable year or, when no return is filed, the tax for the
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0012|     taxable year; and
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0013|                      (b)  any amount withheld under the
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0014|     provisions of the Withholding Tax Act for that taxpayer for that
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0015|     taxable year;
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0016|                 (2)  the individual's preceding taxable year was
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0017|     a taxable year of twelve months, the individual did not have any
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0018|     tax liability for the preceding taxable year and the individual
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0019|     was a resident of New Mexico for the entire taxable year; or
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0020|                 (3)  the secretary determines that the
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0021|     underpayment was not due to fraud, negligence or disregard of
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0022|     rules and regulations.
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0023|            G.  If, on or before January 31 of the following
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0024|     taxable year, the taxpayer files a return for the taxable year
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0025|     and pays in full the amount computed on the return as payable,
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0001|     then no penalty under Subsection E of this section shall be
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0002|     imposed with respect to any underpayment of the fourth required
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0003|     installment for the taxable year.
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0004|            H.  This section shall be applied to taxable years of
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0005|     less than twelve months in the manner determined by regulation
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0006|     or instruction of the secretary.
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0007|            I.  Except as otherwise provided in Subsection J of
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0008|     this section, this section applies to any estate or trust.
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0009|            J.  This section does not apply to any trust that is
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0010|     subject to the tax imposed by Section 511 of the Internal
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0011|     Revenue Code or that is a private foundation.  With respect to
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0012|     any taxable year ending before the date two years after the date
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0013|     of the decedent's death, this section does not apply to:
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0014|                 (1)  the estate of the decedent; or
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0015|                 (2)  any trust all of which was treated under
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0016|     Subpart E of Part I of Subchapter J of Chapter 1 of the Internal
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0017|     Revenue Code as owned by the decedent and to which the residue
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0018|     of the decedent's estate will pass under the decedent's will or,
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0019|     if no will is admitted to probate, that is the trust primarily
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0020|     responsible for paying debts, taxes and expenses of
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0021|     administration."
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0022|       Section 2.  APPLICABILITY.--The provisions of this act
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0023|     apply to taxable years beginning on or after January 1, 1997.
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0024|                                    
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0025|   
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0001|                    FORTY-SECOND LEGISLATURE
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0002|                      SECOND SESSION, 1996
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0003|   
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0004|   
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0005|                                              JANUARY 18, 1996
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0006|   
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0007|   Mr. President:
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0008|   
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0009|     Your COMMITTEES' COMMITTEE, to whom has been referred
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0010|   
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0011|                           SENATE BILL 50
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0012|   
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0013|   has had it under consideration and finds same to be GERMANE,PURSUANT
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0014|   TO CONSTITUTIONAL PROVISIONS, and thence referred to the SENATE WAYS
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0015|   AND MEANS COMMITTEE.
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0016|   
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0017|                              Respectfully submitted,
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0018|   
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0019|   
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0020|   
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0021|   
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0022|                              __________________________________
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0023|                              SENATOR MANNY M. ARAGON, Chairman 
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0024|   
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0025|   
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0001|   
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0002|   Adopted_______________________ Not Adopted_______________________
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0003|             (Chief Clerk)                        (Chief Clerk)
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0004|   
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0005|   
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0006|                     Date ________________________
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0007|   
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0008|   
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0009|   
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0010|   The roll call vote was <u> </u> For <u> </u> Against
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0011|   Yes:  
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0012|   No:        
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0013|   Excused:   
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0014|   Absent:    
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0015|   
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0016|   
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0017|     S0050CC1
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0018|   
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0019|                      FORTY-SECOND LEGISLATURE
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0020|                        SECOND SESSION, 1996
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0021|   
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0022|   
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0023|                                                   January 26, 1996
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0024|   
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0025|   Mr. President:
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0001|   
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0002|     Your WAYS AND MEANS COMMITTEE, to whom has been referred
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0003|   
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0004|                           SENATE BILL 50
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0005|   
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0006|   has had it under consideration and reports same with recommendation that
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0007|   it DO PASS, and thence referred to the FINANCE COMMITTEE.
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0008|   
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0009|                              Respectfully submitted,
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0010|   
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0011|   
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0012|   
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0013|                              __________________________________
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0014|                              TITO D. CHAVEZ, Chairman 
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0015|   
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0016|   
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0017|   
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0018|   Adopted_______________________ Not Adopted_______________________
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0019|             (Chief Clerk)                          (Chief Clerk)
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0020|   
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0021|   
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0022|                     Date ________________________
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0023|   
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0024|   
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0025|   The roll call vote was <u> 6 </u> For <u> 1 </u> Against
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0001|   Yes:  6
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0002|   No:        Rawson
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0003|   Excused:   Riley
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0004|   Absent:    
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0005|   
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0006|   
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0007|   S0050WM1
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0008|   
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0009|                             State of New Mexico
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0010|                      House of Representatives
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0011|   
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0012|                      FORTY-SECOND LEGISLATURE
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0013|                        SECOND SESSION, 1996
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0014|   
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0015|   
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0016|                                                  February 15, 1996
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0017|   
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0018|   
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0019|   Mr. Speaker:
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0020|   
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0021|    Your TAXATION AND REVENUE COMMITTEE, to whom has been
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0022|   referred
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0023|   
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0024|                          SENATE BILL 50
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0025|                                  
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0001|                                   has had it under consideration and reports same with
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0002|   recommendation that it DO PASS.
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0003|   
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0004|                             Respectfully submitted,
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0005|   
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0006|   
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0007|   
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0008|                             <u>                                 
</u>    |
<u></u>0009| <u>  </u>                              Jerry W. Sandel, Chairman
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0010|   
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0011|   
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0012|   Adopted <u>                    </u> Not Adopted <u>                      </u>
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0013|         (Chief Clerk)                       (Chief Clerk)
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0014|   
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0015|                         Date <u>            </u>
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0016|   
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0017|   The roll call vote was <u> 5</u> For<u> 2 </u> Against
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0018|   Yes:       5
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0019|   No:        Porter, Stell
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0020|   Excused:   None
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0021|   Absent:    Gallegos, Gonzales, Hawkins, Lovejoy, Lujan, Sandoval
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0022|   
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0023|   
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0024|                                                                   
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