Signed by Governor Susana Martinez

Vote Smart's Synopsis:

Vote to pass a bill that reduces corporate income tax rates, reduces "hold harmless" tax payments, and extends film industry tax credits.

Highlights:

• Reduces the income tax rate for corporations with net income over $1 million from 7.6 percent of income over $1 million to the following rates (Sec. 3):
• 7.3 percent of income over $1 million for the 2014 tax year;
• 6.9 percent of income over $1 million for the 2015 tax year; and
• 6.6 percent of income over $1 million for the 2016 tax year.

• Reduces the income tax rate for corporations with net income over $500,000 from 6.4 percent of income over $500,000 to the following rates (Sec. 3):
• 6.2 percent of income over $500,000 for the 2017 tax year; and
• 5.9 percent of income over $500,000 for the 2018 tax year.

• Requires a unitary corporation that provides retail sales of goods in a facility of more than 30,000 square feet under 1 roof in New Mexico to file a combined return with other unitary corporations “as though the entire combined net income were that of 1 corporation”, for tax years beginning in 2014 (Sec. 4).

• Exempts a unitary corporation from filing a combined return if the corporation operates nonretail facilities in New Mexico which employ at least 750 employees in such facilities (Sec. 4).

• Reduces the “hold harmless” tax payments applied to counties and municipalities beginning July 1, 2015 through July 1, 2028, and repeals the payment beginning July 1, 2029 (Sec. 1).

• Authorizes counties and municipalities to apply an excise tax up to three-eighths percent of the gross receipts of any individual engaged in business in the county or municipality (Secs. 11 & 12).

• Requires all business income to be apportioned to the state by multiplying the income by the product of dividing the property factor plus the payroll factor plus the sales factor by 3 (Sec. 7).

• Authorizes the Taxation and Revenue Department to apply a “high-wage jobs tax credit” to certain employers in an amount equal to 10 percent of the wages and benefits given to an employee in a new “high-wage economic-based job” who is a resident of the state, not to exceed $12,000 per job per qualifying period (Sec. 10).

• Authorizes the Taxation and Revenue Department to apply a 25 percent film production tax credit to film production companies for certain expenditures including, but not limited to, the following expenditures (Sec. 5):
• Direct production expenditures made in New Mexico; and
• Postproduction expenditures made in New Mexico.

• Requires an additional 5 percent film production tax credit to be applied to direct production expenditures for the following productions (Sec. 5):
• On series television productions with an order for at least 6 episodes in a single season; or
• On certain productions that are directly attributable to the wages and benefits paid to a New Mexico resident employed in an industry crew position.

• Authorizes a film production company to claim up to $50 million in film production tax credits each fiscal years 2013 through 2015 (Sec. 5).

• Specifies that if the film production tax credits claimed in a fiscal year by a film production company is less than $50 million, then an amount equal to the lesser of the difference in that fiscal year or $10 million shall be added to the total amount of film production tax credits that that film production company may claim in the following fiscal year (Sec. 5).

• Authorizes receipts from tangible personal property sales to be deducted from gross receipts if the sale is made to an individual engaged in the business of manufacturing who delivers a nontaxable transaction certificate to the seller (Sec. 9).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that reduces corporate income tax rates, reduces "hold harmless" tax payments, and extends film industry tax credits.

Highlights:

• Reduces the income tax rate for corporations with net income over $1 million from 7.6 percent of income over $1 million to the following rates (Sec. 3):
• 7.3 percent of income over $1 million for the 2014 tax year;
• 6.9 percent of income over $1 million for the 2015 tax year; and
• 6.6 percent of income over $1 million for the 2016 tax year.

• Reduces the income tax rate for corporations with net income over $500,000 from 6.4 percent of income over $500,000 to the following rates (Sec. 3):
• 6.2 percent of income over $500,000 for the 2017 tax year; and
• 5.9 percent of income over $500,000 for the 2018 tax year.

• Requires a unitary corporation that provides retail sales of goods in a facility of more than 30,000 square feet under 1 roof in New Mexico to file a combined return with other unitary corporations “as though the entire combined net income were that of 1 corporation”, for tax years beginning in 2014 (Sec. 4).

• Exempts a unitary corporation from filing a combined return if the corporation operates nonretail facilities in New Mexico which employ at least 750 employees in such facilities (Sec. 4).

• Reduces the “hold harmless” tax payments applied to counties and municipalities beginning July 1, 2015 through July 1, 2028, and repeals the payment beginning July 1, 2029 (Sec. 1).

• Authorizes counties and municipalities to apply an excise tax up to three-eighths percent of the gross receipts of any individual engaged in business in the county or municipality (Secs. 11 & 12).

• Requires all business income to be apportioned to the state by multiplying the income by the product of dividing the property factor plus the payroll factor plus the sales factor by 3 (Sec. 7).

• Authorizes the Taxation and Revenue Department to apply a “high-wage jobs tax credit” to certain employers in an amount equal to 10 percent of the wages and benefits given to an employee in a new “high-wage economic-based job” who is a resident of the state, not to exceed $12,000 per job per qualifying period (Sec. 10).

• Authorizes the Taxation and Revenue Department to apply a 25 percent film production tax credit to film production companies for certain expenditures including, but not limited to, the following expenditures (Sec. 5):
• Direct production expenditures made in New Mexico; and
• Postproduction expenditures made in New Mexico.

• Requires an additional 5 percent film production tax credit to be applied to direct production expenditures for the following productions (Sec. 5):
• On series television productions with an order for at least 6 episodes in a single season; or
• On certain productions that are directly attributable to the wages and benefits paid to a New Mexico resident employed in an industry crew position.

• Authorizes a film production company to claim up to $50 million in film production tax credits each fiscal years 2013 through 2015 (Sec. 5).

• Specifies that if the film production tax credits claimed in a fiscal year by a film production company is less than $50 million, then an amount equal to the lesser of the difference in that fiscal year or $10 million shall be added to the total amount of film production tax credits that that film production company may claim in the following fiscal year (Sec. 5).

• Authorizes receipts from tangible personal property sales to be deducted from gross receipts if the sale is made to an individual engaged in the business of manufacturing who delivers a nontaxable transaction certificate to the seller (Sec. 9).

Full Bill Text