0001|            SENATE WAYS AND MEANS COMMITTEE SUBSTITUTE FOR
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0002|                           SENATE BILL 1211
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0003|     43rd legislature - STATE OF NEW MEXICO - first session, 1997
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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; PROVIDING A CREDIT AGAINST CORPORATE
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0013|     INCOME TAX; ENACTING A SECTION OF THE NMSA 1978.
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0014|     
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0015|     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0016|          Section 1.  A new section of the Corporate Income and
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0017|     Franchise Tax Act is enacted to read:
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0018|          "[NEW MATERIAL]  INTERGOVERNMENTAL BUSINESS TAX CREDIT.--
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0019|               A.  With respect to the net income of a taxpayer
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0020|     engaged in the transaction of business occurring after July 1,
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0021|     1997 from a new business on tribal land, the person who is
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0022|     liable for the payment of the corporate income tax may claim a
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0023|     credit against the corporate income tax for the aggregate
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0024|     amount of tax paid to an Indian nation, tribe or pueblo located
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0025|     in whole or in part within New Mexico.
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0001|               B.  The credit provided by this section may be
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0002|     referred to as the "intergovernmental business tax credit".
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0003|               C.  As used in this section:
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0004|                    (1)  "aggregate amount of tax" means the total
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0005|     of all taxes imposed by an Indian nation, tribe or pueblo
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0006|     located in whole or in part in New Mexico on income derived
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0007|     from business activity on Indian land, except a tax shall not
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0008|     be included in that total if the tax is eligible for a credit
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0009|     pursuant to the provisions of Section 7-29C-1 NMSA 1978 or any
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0010|     other intergovernmental tax credit that provides a similar tax
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0011|     credit; 
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0012|                    (2)  "Indian land" means all land that on March
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0013|     1, 1997 was:
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0014|                         (a)  within the exterior boundaries of an
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0015|     Indian reservation or pueblo grant; or
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0016|                         (b)  lands held in trust by the United
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0017|     States for an Indian nation, tribe or pueblo; and
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0018|                    (3)  "new business" means a business that
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0019|     commences operation on or after July 1, 1997.
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0020|               D.  The intergovernmental business tax credit shall
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0021|     be determined separately for each reporting period and shall be
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0022|     equal to fifty percent of the lesser of:
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0023|                    (1)  the aggregate amount of tax paid by a
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0024|     taxpayer; or 
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0025|                    (2)  the amount of the taxpayer's corporate
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0001|     income tax due for the reporting period.
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0002|               E.  The department shall administer and interpret
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0003|     the provisions of this section in accordance with the provisions
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0004|     of the Tax Administration Act.
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0005|               F.  The burden of showing entitlement to a credit
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0006|     authorized by this section is on the taxpayer claiming it, and the
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0007|     taxpayer shall furnish to the appropriate tax collecting agency,
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0008|     in the manner determined by the department, proof of payment of
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0009|     the aggregate amount of tax on which the credit is based.
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0010|               G.  A taxpayer that conducts business both on and off
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0011|     Indian land in New Mexico shall have a corporate income tax
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0012|     liability from his income on Indian land equal to the sum of the
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0013|     products of one-half of the taxpayer's New Mexico income
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0014|     multiplied by the payroll factor and one-half of the taxpayer's
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0015|     New Mexico income multiplied by the property factor.  The factors
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0016|     shall be determined as follows:
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0017|                    (1)  the payroll factor is a fraction, the
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0018|     numerator of which is the amount of compensation paid to employees
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0019|     employed during the tax period by the taxpayer in his business on
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0020|     Indian land, and the denominator of which is the total amount of
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0021|     compensation paid to employees employed during the tax period by
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0022|     the taxpayer in all of New Mexico, including Indian land; and
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0023|                    (2)  the property factor is a fraction, the
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0024|     numerator of which is the average value of the taxpayer's real and
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0025|     tangible personal property owned or rented and used on Indian land
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0001|     in New Mexico during the tax period and the denominator of which
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0002|     is the average value of all the taxpayer's real and tangible
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0003|     property owned or rented and used in New Mexico, including on
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0004|     Indian land, during the tax period." 
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0005|          Section 2.  APPLICABILITY.--The provisions of this act apply
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0006|     to taxable years beginning on or after January 1, 1997.
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0007|          Section 3.  EFFECTIVE DATE.--The effective date of the
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0008|     provisions of this act is July 1, 1997.
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0009|                                   
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