CORPORATE INCOME TAX CHANGES

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AN ACT
RELATING TO TAXATION; DECOUPLING FROM CERTAIN PROVISIONS OF
FEDERAL LAW RELATING TO CORPORATE INCOME TAX BY AMENDING THE
DEFINITION OF "BASE INCOME" IN THE CORPORATE INCOME AND
FRANCHISE TAX ACT TO CONFORM TO THE FEDERAL INCLUSION OF
CERTAIN INCOME OF CONTROLLED FOREIGN CORPORATIONS AND
SUBTRACTING AMOUNTS DEDUCTED FOR BONUS DEPRECIATION AND
INTEREST EXPENSES; PROVIDING THAT APPORTIONMENT RULES APPLY
TO ATTRIBUTED INCOME FROM A CONTROLLED FOREIGN CORPORATION;
CREATING THE LOCAL JOURNALIST EMPLOYMENT INCOME TAX CREDIT
AND THE LOCAL JOURNALIST EMPLOYMENT CORPORATE INCOME TAX
CREDIT; CREATING A GROSS RECEIPTS TAX DEDUCTION FOR THE SALE
OF CONSTRUCTION MATERIALS AND LABOR USED FOR THE DEVELOPMENT
OF AFFORDABLE HOUSING; CREATING THE PHYSICIAN TAX CREDIT
PURSUANT TO THE INCOME TAX ACT; CREATING THE LOCAL NEWS
PRINTER INCOME TAX CREDIT AND THE LOCAL NEWS PRINTER
CORPORATE INCOME TAX CREDIT; EXTENDING THE DATE OF
ELIGIBILITY FOR THE HIGH-WAGE JOBS TAX CREDIT; MAKING
APPROPRIATIONS TO PROVIDE SALARY INCREASES FOR STATE AND
PUBLIC SCHOOL EMPLOYEES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 7-2A-2 NMSA 1978 (being Laws 1986,
Chapter 20, Section 33, as amended) is amended to read:
"7-2A-2. DEFINITIONS.--For the purpose of the Corporate
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Income and Franchise Tax Act and unless the context requires
otherwise:
A. "bank" means any national bank, national
banking association, state bank or bank holding company;
B. "apportioned net income" or "apportioned net
loss" means net income allocated and apportioned to
New Mexico pursuant to the provisions of the Corporate Income
and Franchise Tax Act or the Uniform Division of Income for
Tax Purposes Act, but excluding from the sales factor any
sales that represent intercompany transactions between
members of the filing group;
C. "base income" means the federal taxable income
or the federal net operating loss of a corporation for the
taxable year calculated pursuant to the Internal Revenue
Code, after special deductions provided in Sections 241
through 249 of the Internal Revenue Code but without any
deduction for net operating losses, as if the corporation
filed a federal tax return as a separate domestic entity,
modified as follows:
(1) adding to that income:
(a) interest received on a state or
local bond exempt under the Internal Revenue Code;
(b) the amount of any deduction claimed
in calculating taxable income for all expenses and costs
directly or indirectly paid, accrued or incurred to a captive
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real estate investment trust;
(c) the amount of any deduction, other
than for premiums, for amounts paid directly or indirectly to
a commonly controlled entity that is exempt from corporate
income tax pursuant to Section 7-2A-4 NMSA 1978;
(d) for taxable years beginning on or
after January 1, 2023, an amount equal to the amount of
credit claimed and allowed for that year pursuant to Section
7-3A-10 NMSA 1978 with respect to the distributed net income
of a pass-through entity;
(e) the amount of any deduction taken
pursuant to Sections 168(k) and 168(n) of the Internal
Revenue Code in excess of the deduction amount that would
have been allowed by Sections 168(a) through 168(j) of the
Internal Revenue Code; and
(f) the amount of additional interest
deducted as a result of the changes to Subparagraph (A) of
Section 163(j)(8) of the Internal Revenue Code made by
Section 70303 of Public Law 119–21; provided that such
interest shall be eligible for the carryforward provisions of
Section 163(j)(2) of the Internal Revenue Code;
(2) subtracting from that income:
(a) income from obligations of the
United States net of expenses incurred to earn that income;
and
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(b) other amounts that the state is
prohibited from taxing because of the laws or constitution of
this state or the United States net of any related expenses;
(3) making other adjustments deemed
necessary to properly reflect income of the unitary group,
including attribution of income or expense related to unitary
assets held by related corporations that are not part of the
filing group; and
(4) for a taxpayer that conducts a lawful
business pursuant to the laws of this state, excludes an
amount equal to any expenditure that is eligible to be
claimed as a federal income tax deduction but is disallowed
pursuant to Section 280E of the Internal Revenue Code, as
that section may be amended or renumbered;
D. "captive real estate investment trust" means a
corporation, trust or association taxed as a real estate
investment trust pursuant to Section 857 of the Internal
Revenue Code, the shares or beneficial interests of which are
not regularly traded on an established securities market;
provided that more than fifty percent of any class of
beneficial interests or shares of the real estate investment
trust are owned directly, indirectly or constructively by the
taxpayer during all or a part of the taxpayer's taxable year;
E. "common ownership" means the direct or indirect
control or ownership of more than fifty percent of the
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outstanding voting stock, ownership of which is determined
pursuant to Section 1563 of the Internal Revenue Code, as
that section may be amended or renumbered, of:
(1) a parent-subsidiary controlled group as
defined in Section 1563 of the Internal Revenue Code, except
that fifty percent shall be substituted for eighty percent;
(2) a brother-sister controlled group as
defined in Section 1563 of the Internal Revenue Code; or
(3) three or more corporations each of which
is a member of a group of corporations described in Paragraph
(1) or (2) of this subsection, and one of which is:
(a) a common parent corporation
included in a group of corporations described in Paragraph
(1) of this subsection; and
(b) included in a group of corporations
described in Paragraph (2) of this subsection;
F. "consolidated group" means the group of
entities properly filing a federal consolidated return under
the Internal Revenue Code for the taxable year;
G. "corporation" means corporations, joint stock
companies, real estate trusts organized and operated under
the Real Estate Trust Act, financial corporations and banks,
other business associations and, for corporate income tax
purposes, partnerships and limited liability companies taxed
as corporations under the Internal Revenue Code;
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H. "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;
I. "filing group" means a group of corporations
properly included in a return pursuant to Section 7-2A-8.3
NMSA 1978 for a particular taxable year;
J. "fiscal year" means any accounting period of
twelve months ending on the last day of any month other than
December;
K. "grandfathered net operating loss carryover"
means:
(1) the amount of net loss properly reported
to New Mexico for taxable years beginning January 1, 2013 and
prior to January 1, 2020 as part of a timely filed original
return, or an amended return for those taxable years filed
prior to January 1, 2020, to the extent such loss can be
attributed to one or more corporations that are properly
included in the taxpayer's return for the first taxable year
beginning on or after January 1, 2020;
(2) reduced by:
(a) adding back deductions that were
taken by the corporation or corporations for royalties or
interest paid to one or more related corporations, but only
to the extent that such adjustment would not create a net
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loss for such related corporations; and
(b) the amount of net operating loss
deductions taken prior to January 1, 2020 that would be
charged against those losses consistent with the Internal
Revenue Code and provisions of the Corporate Income and
Franchise Tax Act applicable to the year of the deduction;
and
(3) apportioned to New Mexico using the
apportionment factors that can properly be attributed to the
corporation or corporations for the year of the net loss;
L. "Internal Revenue Code" means the United States
Internal Revenue Code of 1986, as amended;
M. "net income" means:
(1) the base income of a corporation
properly filing a tax return as a separate entity; or
(2) the combined base income and losses of
corporations that are part of a filing group that is computed
after eliminating intercompany income and expense in a manner
consistent with the consolidated filing requirements of the
Internal Revenue Code and the Corporate Income and Franchise
Tax Act;
N. "net operating loss carryover" means the
apportioned net loss properly reported on an original or
amended tax return for taxable years beginning on or after
January 1, 2020 by the taxpayer:
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(1) plus:
(a) the portion of an apportioned net
loss properly reported to New Mexico for a taxable year
beginning on or after January 1, 2020, on a separate year
return, to the extent the taxpayer would have been entitled
to include the portion of such apportioned net loss in the
taxpayer's consolidated net operating loss carryforward under
the Internal Revenue Code if the taxpayer filed a
consolidated federal return; and
(b) the taxpayer's grandfathered net
operating loss carryover; and
(2) minus:
(a) the amount of the net operating
loss carryover attributed to an entity that has left the
filing group, computed in a manner consistent with the
consolidated filing requirements of the Internal Revenue Code
and applicable regulations, as if the taxpayer were filing a
consolidated return; and
(b) the amount of net operating loss
deductions properly taken by the taxpayer;
O. "net operating loss deduction" means the
portion of the net operating loss carryover that may be
deducted from the taxpayer's apportioned net income under the
Internal Revenue Code as of January 1, 2018 for the taxable
year in which the deduction is taken, including the eighty
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percent limitation of Section 172(a) of the Internal Revenue
Code as of January 1, 2018 calculated on the basis of the
taxpayer's apportioned net income;
P. "person" means any individual, estate, trust,
receiver, cooperative association, club, corporation,
company, firm, partnership, limited liability company, joint
venture, syndicate or other association; "person" also means,
to the extent permitted by law, any federal, state or other
governmental unit or subdivision or agency, department or
instrumentality thereof;
Q. "real estate investment trust" has the meaning
ascribed to the term in Section 856 of the Internal Revenue
Code, as that section may be amended or renumbered;
R. "related corporation" means a corporation that
is under common ownership with one or more corporations but
that is not included in the same tax return;
S. "return" means any tax or information return,
including a water's-edge or worldwide combined return, a
consolidated return, a declaration of estimated tax or a
claim for refund, including any amendments or supplements to
the return, required or permitted pursuant to a law subject
to administration and enforcement pursuant to the Tax
Administration Act and filed with the department by or on
behalf of any person;
T. "secretary" means the secretary of taxation and
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revenue or the secretary's delegate;
U. "separate year return" means a properly filed
original or amended return for a taxable year beginning on or
after January 1, 2020 by a taxpayer reporting a loss, a
portion of which is claimed as part of the net operating loss
carryover by another taxpayer in a subsequent return period;
V. "state" means any state of the United States,
the District of Columbia, the commonwealth of Puerto Rico,
any territory or possession of the United States or political
subdivision thereof or any political subdivision of a foreign
country;
W. "state or local bond" means a bond issued by a
state other than New Mexico or by a local government other
than one of New Mexico's political subdivisions, the interest
from which is excluded from income for federal income tax
purposes under Section 103 of the Internal Revenue Code, as
that section may be amended or renumbered;
X. "taxable income" means a taxpayer's apportioned
net income minus the net operating loss deduction for the
taxable year;
Y. "taxable year" means the calendar year or
fiscal year upon the basis of which the net income is
computed under the Corporate Income and Franchise Tax Act and
includes, in the case of the return made for a fractional
part of a year under the provisions of that act, the period
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for which the return is made;
Z. "taxpayer" means any corporation or group of
corporations filing a return pursuant to Section 7-2A-8.3
NMSA 1978 subject to the taxes imposed by the Corporate
Income and Franchise Tax Act;
AA. "unitary group" means a group of two or more
corporations, including a captive real estate investment
trust, but not including an S corporation, an insurance
company subject to the provisions of the New Mexico Insurance
Code, an insurance company that would be subject to the
New Mexico Insurance Code if the insurance company engaged in
business in this state or a real estate investment trust that
is not a captive real estate investment trust, that are:
(1) related through common ownership; and
(2) economically interdependent with one
another as demonstrated by the following factors:
(a) centralized management;
(b) functional integration; and
(c) economies of scale;
BB. "water's-edge group" means all corporations
that are part of a unitary group, except:
(1) corporations that are exempt from
corporate income tax pursuant to Section 7-2A-4 NMSA 1978;
and
(2) corporations organized or incorporated
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outside the United States or its possessions or territories
that have less than twenty percent of their property, payroll
and sales sourced to locations within the United States,
following the sourcing rules of the Uniform Division of
Income for Tax Purposes Act; and
CC. "worldwide combined group" means all members
of a unitary group, except members that are exempt from
corporate income tax pursuant to Section 7-2A-4 NMSA 1978,
irrespective of the country in which the corporations are
incorporated or conduct business activity."
SECTION 2. Section 7-4-10 NMSA 1978 (being Laws 1993,
Chapter 153, Section 1, as amended) is amended to read:
"7-4-10. APPORTIONMENT OF BUSINESS INCOME.--
A. Except as provided in Subsections B and C of
this section, all business income shall be apportioned to
this state by multiplying the income by a fraction, the
numerator of which is the property factor plus the payroll
factor plus the sales factor and the denominator of which is
three. The apportionment calculation shall include the
factors of a controlled foreign corporation to the extent the
income of the corporation is included in net income.
B. If eighty percent or more of the New Mexico
numerators of the property and payroll factors for a filing
group, or for a taxpayer that is not a member of a filing
group, are employed in manufacturing or operating a computer
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processing facility, the filing group or the taxpayer may
elect to have business income apportioned to this state by
multiplying the income by the sales factor for the taxable
year.
C. If a filing group, or a taxpayer that is not a
member of a filing group, has a headquarters operation in
New Mexico, the filing group or the taxpayer may elect to
have business income apportioned to this state by multiplying
the income by the sales factor for the taxable year.
D. To elect the method of apportionment provided
by Subsection B or C of this section, the taxpayer shall
notify the department of the election, in writing, no later
than the date on which the taxpayer files the return for the
first taxable year to which the election will apply. The
election shall apply as follows:
(1) if the election is made for taxable
years beginning prior to January 1, 2020, to the taxable year
in which the election is made and to each taxable year
thereafter for three years, or until the taxable year ending
prior to January 1, 2020, whichever is earlier;
(2) if the election is made for a taxable
year beginning on or after January 1, 2020, to the taxable
year in which the election is made and to each taxable year
thereafter until the taxpayer notifies the department, in
writing, that the election is terminated, except that the
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taxpayer shall not terminate the election until the method of
apportioning business income provided by Subsection B or C of
this section has been used by the taxpayer for at least three
consecutive taxable years, including a total of at least
thirty-six calendar months; and
(3) if the election is made by a qualifying
filing group, the election shall apply to the members of the
filing group properly included pursuant to Section 7-2A-8.3
NMSA 1978.
E. For purposes of this section:
(1) "controlled foreign corporation" means a
foreign corporation as defined by Section 957 of the Internal
Revenue Code of 1986, as that section may be amended or
renumbered;
(2) "filing group" means "filing group" as
that term is defined in the Corporate Income and Franchise
Tax Act;
(3) "headquarters operation" means:
(a) the center of operations of a
business: 1) where corporate staff employees are physically
employed; 2) where the centralized functions are primarily
performed, including administrative, planning, managerial,
human resources, purchasing, information technology and
accounting, but not including operating a call center; 3) the
function and purpose of which is to manage and direct most
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aspects and functions of the business operations within a
subdivided area of the United States; 4) from which final
authority over regional or subregional offices, operating
facilities and any other offices of the business are issued;
and 5) including national and regional headquarters if the
national headquarters is subordinate only to the ownership of
the business or its representatives and the regional
headquarters is subordinate to the national headquarters; or
(b) the center of operations of a
business: 1) the function and purpose of which is to manage
and direct most aspects of one or more centralized functions;
and 2) from which final authority over one or more
centralized functions is issued;
(4) "manufacturing" means combining or
processing components or materials to increase their value
for sale in the ordinary course of business, but does not
include:
(a) construction;
(b) farming;
(c) power generation; provided that
"manufacturing" includes electricity generation at a facility
that does not require location approval and a certificate of
convenience and necessity prior to commencing construction or
operation of the facility pursuant to the Public Utility Act;
(d) processing natural resources,
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including hydrocarbons; or
(e) processing or preparation of meals
for immediate consumption; and
(5) "operating a computer processing
facility" means managing the necessary and ancillary
activities for the operation of a facility primarily used to
process data or information, but does not include managing
the operation of facilities that are predominantly used to
support sales of tangible property or the provision of
banking, financial or professional services."
SECTION 3. A new section of the Income Tax Act is
enacted to read:
"LOCAL JOURNALIST EMPLOYMENT INCOME TAX CREDIT.--
A. For taxable years prior to January 1, 2032, a
taxpayer who is not a dependent of another individual and is
an owner of a local news organization that employs a
journalist may claim a credit against the taxpayer's tax
liability imposed pursuant to the Income Tax Act in an amount
provided in Subsection B of this section. The tax credit
provided by this section may be referred to as the "local
journalist employment income tax credit".
B. The amount of tax credit shall be in an amount
equal to thirty percent of wages paid to each journalist
employed by a local news organization.
C. A taxpayer shall apply for certification of
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eligibility for the tax credit from the department on forms
and in the manner prescribed by the department no later than
one year following the end of the calendar year in which the
wages were paid. A taxpayer shall not be eligible to receive
a tax credit for more than seventy-five journalists whom the
taxpayer employs as a local news organization and, except as
provided in Subsections F and G of this section, only one tax
credit shall be certified for each journalist employed by a
local news organization per taxable year. The total annual
aggregate amount of local journalist employment income tax
credits and local journalist employment corporate income tax
credits that may be certified in a calendar year shall not
exceed four million dollars ($4,000,000). Completed
applications shall be considered in the order received.
D. If the department determines that the taxpayer
meets the requirements of this section, the department shall
issue a dated certificate of eligibility to the taxpayer
providing the amount of tax credit for which the taxpayer is
eligible and the taxable years in which the credit may be
claimed.
E. That portion of tax credit that exceeds a
taxpayer's income tax liability in the taxable year in which
the credit is claimed shall be refunded to the taxpayer.
F. Married individuals filing separate returns for
a taxable year for which they could have filed a joint return
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may each claim only one-half of the tax credit that would
have been claimed on a joint return.
G. A taxpayer may be allocated the right to claim
the tax credit in proportion to the taxpayer's ownership
interest if the taxpayer owns an interest in a business
entity that is taxed for federal income tax purposes as a
partnership or limited liability company and the business
entity has met all requirements to be eligible for the
credit. The total credit claimed by all members of the
partnership or limited liability company shall not exceed the
allowable credit pursuant to this section.
H. A taxpayer allowed to claim a tax credit
pursuant to this section shall claim the tax credit in a
manner required by the department.
I. The tax credit provided by this section shall
be included in the tax expenditure budget pursuant to Section
7-1-84 NMSA 1978, including the total annual aggregate cost
of the tax credit.
J. As used in this section:
(1) "journalist" means a person who:
(a) is paid by a local news
organization to regularly gather, prepare, collect,
photograph, record, direct the recording of, produce, write,
edit, report or publish news or information that concerns
state or local events or other matters of public interest for
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dissemination to the state or a local community through
reporting activities, including conducting interviews,
observing current events or analyzing documents;
(b) resides within fifty miles of the
coverage area assigned by the local news organization; and
(c) is employed as a journalist by the
local news organization for more than twenty-eight weeks of
the taxable year in which the credit is claimed;
(2) "local news organization" means an
entity that:
(a) provides a print or digital
publication that engages professionals who regularly gather,
prepare, collect, photograph, record, direct the recording
of, produce, write, edit, report or publish news or
information that concerns state or local events or other
matters of public interest for dissemination to the state or
a local community through reporting activities, including
conducting interviews, observing current events or analyzing
documents;
(b) pays at least one individual,
either through employment or by contract with the entity, as
a journalist;
(c) in the case of print publications,
has published at least one print publication per month over
the previous twenty-four months and holds a valid United
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States postal service periodical permit or has at least
thirty percent of its content dedicated to state or local
news;
(d) in the case of digital-only
entities, has published at least three originally produced
stories about the state or a local community per week
averaged over the previous twenty-four months and has at
least fifty percent of its digital audience in New Mexico,
averaged over a twelve-month period;
(e) discloses in its print publication
or on its website its beneficial ownership or, in the case of
a not-for-profit entity, its board of directors;
(f) in the case of an organization that
demonstrates to the department that the organization has
been granted exemption from the federal income tax by the
United States commissioner of internal revenue as
organizations described in Section 501(c)(3) of the Internal
Revenue Code, has declared the coverage of state or local
news as the stated mission in its filings with the federal
internal revenue service;
(g) has not received more than ten
percent of its gross receipts for the previous year from
political action committees or other entities described in
Section 527 of the Internal Revenue Code, or from an
organization that has been granted exemption from the federal
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income tax by the United States commissioner of internal
revenue as an organization described in Section 501(c)(4) or
501(c)(6) of the Internal Revenue Code; and
(h) is not a publicly traded entity or
is no more than forty-nine percent owned, directly or
indirectly, by a publicly traded entity or subsidiary; and
(3) "wages" means not more than fifty
thousand dollars ($50,000) in compensation paid by a local
news organization to a journalist through the organization's
payroll system, including those wages that the journalist
elects to defer or redirect or the journalist's contribution
to a 401(k) or cafeteria plan program. "Wages" does not mean
benefits or the organization's share of payroll taxes, social
security or medicare contributions, federal or state
unemployment insurance contributions or workers'
compensation."
SECTION 4. A new section of the Corporate Income and
Franchise Tax Act is enacted to read:
"LOCAL JOURNALIST EMPLOYMENT CORPORATE INCOME TAX
CREDIT.--
A. For taxable years prior to January 1, 2032, a
taxpayer that is a local news organization that employs a
journalist may claim a credit against the taxpayer's tax
liability imposed pursuant to the Corporate Income and
Franchise Tax Act in an amount provided in Subsection B of
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this section. The tax credit provided by this section may be
referred to as the "local journalist employment corporate
income tax credit".
B. The amount of tax credit shall be in an amount
equal to thirty percent of wages paid to each journalist
employed by a local news organization.
C. A taxpayer shall apply for certification of
eligibility for the tax credit from the department on forms
and in the manner prescribed by the department no later than
one year following the end of the calendar year in which the
wages were paid. A taxpayer shall not be eligible to receive
a tax credit for more than seventy-five journalists whom the
taxpayer employs as a local news organization, and only one
tax credit shall be certified for each journalist employed by
a local news organization per taxable year. The total annual
aggregate amount of local journalist employment corporate
income tax credits and local journalist employment income tax
credits that may be certified in a calendar year shall not
exceed four million dollars ($4,000,000). Completed
applications shall be considered in the order received.
D. If the department determines that the taxpayer
meets the requirements of this section, the department shall
issue a dated certificate of eligibility to the taxpayer
providing the amount of tax credit for which the taxpayer is
eligible and the taxable years in which the credit may be
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claimed.
E. That portion of tax credit that exceeds a
taxpayer's corporate income tax liability in the taxable year
in which the credit is claimed shall be refunded to the
taxpayer.
F. A taxpayer allowed to claim a tax credit
pursuant to this section shall claim the tax credit in a
manner required by the department.
G. The tax credit provided by this section shall
be included in the tax expenditure budget pursuant to Section
7-1-84 NMSA 1978, including the total annual aggregate cost
of the tax credit.
H. As used in this section:
(1) "journalist" means a person who:
(a) is paid by a local news
organization to regularly gather, prepare, collect,
photograph, record, direct the recording of, produce, write,
edit, report or publish news or information that concerns
state or local events or other matters of public interest for
dissemination to the state or a local community through
reporting activities, including conducting interviews,
observing current events or analyzing documents;
(b) resides within fifty miles of the
coverage area assigned by the local news organization; and
(c) is employed as a journalist by the
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local news organization for more than twenty-eight weeks of
the taxable year in which the credit is claimed;
(2) "local news organization" means an
entity that:
(a) provides a print or digital
publication that engages professionals who regularly gather,
prepare, collect, photograph, record, direct the recording
of, produce, write, edit, report or publish news or
information that concerns state or local events or other
matters of public interest for dissemination to the state or
a local community through reporting activities, including
conducting interviews, observing current events or analyzing
documents;
(b) pays at least one individual,
either through employment or by contract with the entity, as
a journalist;
(c) in the case of print publications,
has published at least one print publication per month over
the previous twenty-four months and holds a valid United
States postal service periodical permit or has at least
thirty percent of its content dedicated to state or local
news;
(d) in the case of digital-only
entities, has published at least three originally produced
stories about the state or a local community per week
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averaged over the previous twenty-four months and has at
least fifty percent of its digital audience in New Mexico,
averaged over a twelve-month period;
(e) discloses in its print publication
or on its website its beneficial ownership or, in the case of
a not-for-profit entity, its board of directors;
(f) in the case of an organization that
demonstrates to the department that the organization has been
granted exemption from the federal income tax by the United
States commissioner of internal revenue as organizations
described in Section 501(c)(3) of the Internal Revenue Code,
has declared the coverage of state or local news as the
stated mission in its filings with the federal internal
revenue service;
(g) has not received more than ten
percent of its gross receipts for the previous year from
political action committees or other entities described in
Section 527 of the Internal Revenue Code, or from an
organization that has been granted exemption from the federal
income tax by the United States commissioner of internal
revenue as an organization described in Section 501(c)(4) or
501(c)(6) of the Internal Revenue Code; and
(h) is not a publicly traded entity or
is no more than forty-nine percent owned, directly or
indirectly, by a publicly traded entity or subsidiary; and
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(3) "wages" means not more than fifty
thousand dollars ($50,000) in compensation paid by a local
news organization to a journalist through the organization's
payroll system, including those wages that the journalist
elects to defer or redirect or the journalist's contribution
to a 401(k) or cafeteria plan program. "Wages" does not mean
benefits or the organization's share of payroll taxes, social
security or medicare contributions, federal or state
unemployment insurance contributions or workers'
compensation."
SECTION 5. A new section of the Gross Receipts and
Compensating Tax Act is enacted to read:
"DEDUCTION--GROSS RECEIPTS--SALE OF CONSTRUCTION
MATERIALS AND LABOR USED FOR THE DEVELOPMENT OF AFFORDABLE
HOUSING MULTIFAMILY RESIDENTIAL HOUSING PROJECTS.--
A. Prior to July 1, 2030, receipts from selling
construction materials and labor may be deducted from gross
receipts if:
(1) the construction materials and labor are
being used for the purpose of developing multifamily
residential housing;
(2) eighty percent or more of the housing
units being developed will be affordable housing;
(3) the construction materials and labor are
sold to a qualifying grantee for a single project that is
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residential housing pursuant to the Affordable Housing Act;
and
(4) the buyer of the construction materials
and labor delivers a nontaxable transaction certificate to
the seller or provides alternative evidence pursuant to
Section 7-9-43 NMSA 1978.
B. A taxpayer allowed a deduction pursuant to this
section shall report the amount of the deduction to the
department in a manner required by the department.
C. The deduction provided by this section shall be
included in the tax expenditure budget pursuant to Section
7-1-84 NMSA 1978, including the annual aggregate cost of the
deduction.
D. As used in this section:
(1) "affordable housing" means multifamily
residential housing primarily for persons or households of
low or moderate income;
(2) "building" means a structure capable of
being renovated or converted into affordable housing or a
structure that is to be demolished and is located on land
that is donated and upon which affordable housing will be
constructed;
(3) "low or moderate income" means a
household in which the current annual income is at or below
eighty percent of the area median income for the geographic
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area in which the household is located, adjusted for family
size, as determined by the United States department of
housing and urban development; and
(4) "multifamily residential housing" means
any building or portion thereof that is primarily occupied,
or is designed or intended to be primarily occupied, as a
residence by more than three households. "Multifamily
residential housing" includes congregate housing and
transitional or temporary housing for homeless persons."
SECTION 6. A new section of the Income Tax Act is
enacted to read:
"PHYSICIAN TAX CREDIT.--
A. For taxable years prior to January 1, 2032, a
taxpayer who files an individual New Mexico tax return, is
not a dependent of another individual, is a physician and
provides health care services in New Mexico for at least one
thousand five hundred eighty-four hours during a taxable year
may claim a credit against the tax liability imposed by the
Income Tax Act for that taxable year in an amount equal to
ten thousand dollars ($10,000). The credit provided in this
section may be referred to as the "physician tax credit".
B. A taxpayer shall apply for certification of
eligibility for the tax credit from the department of health
on forms and in the manner prescribed by that department.
Completed applications shall be considered in the order
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received. For a taxpayer approved to receive the credit, the
department of health shall issue a certificate of eligibility
to the qualifying physician. The department of health shall
provide the department with certificates of eligibility
issued pursuant to this subsection in an electronic format at
regularly agreed-upon intervals.
C. That portion of a tax credit that exceeds a
taxpayer's tax liability in the taxable year in which the
credit is being claimed may be carried forward for up to
three consecutive taxable years.
D. A taxpayer allowed a tax credit pursuant to
this section shall claim the credit on forms and in a manner
required by the department.
E. The tax credit provided by this section shall
be included in the tax expenditure budget pursuant to Section
7-1-84 NMSA 1978, including the annual aggregate cost of the
tax credit.
F. As used in this section, "physician" means a
health professional who is a medical physician or an
osteopathic physician licensed to practice medicine in New
Mexico pursuant to the Medical Practice Act."
SECTION 7. A new section of the Income Tax Act is
enacted to read:
"LOCAL NEWS PRINTER INCOME TAX CREDIT.--
A. For taxable years prior to January 1, 2032, a
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taxpayer who is not a dependent of another individual and is
an owner of a local news printer that employs a qualified
employee may claim a credit against the taxpayer's tax
liability imposed pursuant to the Income Tax Act in an amount
provided in Subsection B of this section. The tax credit
provided by this section may be referred to as the "local
news printer income tax credit".
B. The amount of tax credit shall be in an amount
equal to the wages paid to each qualified employee employed
by a local news printer in the taxable year for which the tax
credit is claimed, not to exceed:
(1) ten thousand dollars ($10,000) for a
qualified employee working an average of twenty hours or more
per week in the taxable year; and
(2) five thousand dollars ($5,000) for a
qualified employee working an average of less than twenty
hours per week in the taxable year.
C. A taxpayer shall apply for certification of
eligibility for the tax credit from the department on forms
and in the manner prescribed by the department no later than
one year following the end of the calendar year in which the
wages were paid. A taxpayer shall not be eligible to receive
a tax credit for more than one hundred qualified employees
whom the taxpayer employs as a local news printer and, except
as provided in Subsections F and G of this section, only one
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tax credit shall be certified for each qualified employee
employed by a local news printer per taxable year. The total
annual aggregate amount of local news printer income tax
credits and local news printer corporate income tax credits
that may be certified in a calendar year shall not exceed one
million dollars ($1,000,000). Completed applications shall
be considered in the order received.
D. If the department determines that the taxpayer
meets the requirements of this section, the department shall
issue a dated certificate of eligibility to the taxpayer
providing the amount of tax credit for which the taxpayer is
eligible and the taxable years in which the credit may be
claimed.
E. That portion of tax credit that exceeds a
taxpayer's income tax liability in the taxable year in which
the credit is claimed shall be refunded to the taxpayer.
F. Married individuals filing separate returns for
a taxable year for which they could have filed a joint return
may each claim only one-half of the tax credit that would
have been claimed on a joint return.
G. A taxpayer may be allocated the right to claim
the tax credit in proportion to the taxpayer's ownership
interest if the taxpayer owns an interest in a business
entity that is taxed for federal income tax purposes as a
partnership or limited liability company and the business
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entity has met all requirements to be eligible for the
credit. The total credit claimed by all members of the
partnership or limited liability company shall not exceed the
allowable credit pursuant to this section.
H. A taxpayer allowed to claim a tax credit
pursuant to this section shall claim the tax credit in a
manner required by the department.
I. The credit provided by this section shall be
included in the tax expenditure budget pursuant to Section
7-1-84 NMSA 1978, including the total annual aggregate cost
of the credit.
J. As used in this section:
(1) "local news organization" means an
entity that:
(a) provides a print or digital
publication that engages professionals who regularly gather,
prepare, collect, photograph, record, direct the recording
of, produce, write, edit, report or publish news or
information that concerns state or local events or other
matters of public interest for dissemination to the state or
a local community through reporting activities, including
conducting interviews, observing current events or analyzing
documents;
(b) pays at least one individual,
either through employment or by contract with the entity, as
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a qualified employee;
(c) in the case of print publications,
has published at least one print publication per month over
the previous thirty-six months and holds a valid United
States postal service periodical permit or has at least
thirty percent of its content dedicated to state or local
news;
(d) in the case of digital-only
entities, has published at least five originally produced
stories about the state or a local community per week over
the previous thirty-six months and has at least fifty percent
of its digital audience in New Mexico, averaged over a
twelve-month period;
(e) discloses in the entity's print
publication or on the entity's website the entity's
beneficial ownership or, in the case of a not-for-profit
entity, the entity's board of directors;
(f) in the case of an organization
that demonstrates to the department that the organization has
been granted exemption from the federal income tax by the
United States commissioner of internal revenue as
organizations described in Section 501(c)(3) of the Internal
Revenue Code, has declared the coverage of state or local
news as the stated mission in the organization's filings with
the federal internal revenue service;
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(g) has not received more than ten
percent of the entity's gross receipts for the previous year
from political action committees or other entities described
in Section 527 of the Internal Revenue Code, or from an
organization that has been granted exemption from the federal
income tax by the United States commissioner of internal
revenue as an organization described in Section 501(c)(4) or
501(c)(6) of the Internal Revenue Code; and
(h) is not a publicly traded entity or
is no more than forty-nine percent owned, directly or
indirectly, by a publicly traded entity or subsidiary;
(2) "local news printer" means an entity
that:
(a) provides manufacturing, production
and printing services using a web press designed and
optimized for printing newspapers for a local news
organization;
(b) has been engaging in the business
of manufacturing, producing and printing newspapers for at
least five years;
(c) employs at least five qualified
employees; and
(d) is not a publicly traded entity or
is no more than forty-nine percent owned, directly or
indirectly, by a publicly traded entity or subsidiary;
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(3) "qualified employee" means a person who:
(a) is paid by a local news printer to
regularly perform duties related to pre-press, press and
post-press newspaper production to prepare newspapers for
transition to delivery and distribution personnel;
(b) works at a physical location in
New Mexico; and
(c) works as a qualified employee for
the local news printer for at least twenty-five percent of
the taxable year in which the credit is claimed; and
(4) "wages" means compensation paid by a
local news printer to a qualified employee through the
organization's payroll system, including those wages that the
qualified employee elects to defer or redirect or the
qualified employee's contribution to a 401(k) or cafeteria
plan program. "Wages" does not mean benefits or the
organization's share of payroll taxes, social security or
medicare contributions, federal or state unemployment
insurance contributions or workers' compensation."
SECTION 8. A new section of the Corporate Income and
Franchise Tax Act is enacted to read:
"LOCAL NEWS PRINTER CORPORATE INCOME TAX CREDIT.--
A. For taxable years prior to January 1, 2032, a
taxpayer that is an owner of a local news printer that
employs a qualified employee may claim a credit against the
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taxpayer's tax liability imposed pursuant to the Corporate
Income and Franchise Tax Act in an amount provided in
Subsection B of this section. The tax credit provided by
this section may be referred to as the "local news printer
corporate income tax credit".
B. The amount of tax credit shall be in an amount
equal to the wages paid to each qualified employee employed
by a local news printer in the taxable year for which the tax
credit is claimed, not to exceed:
(1) ten thousand dollars ($10,000) for a
qualified employee working an average of twenty hours or more
per week in the taxable year; and
(2) five thousand dollars ($5,000) for a
qualified employee working an average of less than twenty
hours per week in the taxable year.
C. A taxpayer shall apply for certification of
eligibility for the tax credit from the department on forms
and in the manner prescribed by the department no later than
one year following the end of the calendar year in which the
wages were paid. A taxpayer shall not be eligible to receive
a tax credit for more than one hundred qualified employees
whom the taxpayer employs as a local news printer and only
one tax credit shall be certified for each qualified employee
employed by a local news printer per taxable year. The total
annual aggregate amount of local news printer corporate
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income tax credits and local news printer income tax credits
that may be certified in a calendar year shall not exceed one
million dollars ($1,000,000). Completed applications shall
be considered in the order received.
D. If the department determines that the taxpayer
meets the requirements of this section, the department shall
issue a dated certificate of eligibility to the taxpayer
providing the amount of tax credit for which the taxpayer is
eligible and the taxable years in which the credit may be
claimed.
E. That portion of tax credit that exceeds a
taxpayer's income tax liability in the taxable year in which
the credit is claimed shall be refunded to the taxpayer.
F. A taxpayer allowed to claim a tax credit
pursuant to this section shall claim the tax credit in a
manner required by the department.
G. The credit provided by this section shall be
included in the tax expenditure budget pursuant to Section
7-1-84 NMSA 1978, including the total annual aggregate cost
of the credit.
H. As used in this section:
(1) "local news organization" means an
entity that:
(a) provides a print or digital
publication that engages professionals who regularly gather,
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prepare, collect, photograph, record, direct the recording
of, produce, write, edit, report or publish news or
information that concerns state or local events or other
matters of public interest for dissemination to the state or
a local community through reporting activities, including
conducting interviews, observing current events or analyzing
documents;
(b) pays at least one individual,
either through employment or by contract with the entity, as
a qualified employee;
(c) in the case of print publications,
has published at least one print publication per month over
the previous thirty-six months and holds a valid United
States postal service periodical permit or has at least
thirty percent of the entity's content dedicated to state or
local news;
(d) in the case of digital-only
entities, has published at least five originally produced
stories about the state or a local community per week over
the previous thirty-six months and has at least fifty percent
of the entity's digital audience in New Mexico, averaged over
a twelve-month period;
(e) discloses in the entity's print
publication or on the entity's website the entity's
beneficial ownership or, in the case of a not-for-profit
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entity, the entity's board of directors;
(f) in the case of an organization
that demonstrates to the department that the organization has
been granted exemption from the federal income tax by the
United States commissioner of internal revenue as
organizations described in Section 501(c)(3) of the Internal
Revenue Code, has declared the coverage of state or local
news as the stated mission in the organization's filings with
the federal internal revenue service;
(g) has not received more than ten
percent of the entity's gross receipts for the previous year
from political action committees or other entities described
in Section 527 of the Internal Revenue Code, or from an
organization that has been granted exemption from the federal
income tax by the United States commissioner of internal
revenue as an organization described in Section 501(c)(4) or
501(c)(6) of the Internal Revenue Code; and
(h) is not a publicly traded entity or
is no more than forty-nine percent owned, directly or
indirectly, by a publicly traded entity or subsidiary;
(2) "local news printer" means an entity
that:
(a) provides manufacturing, production
and printing services using a web press designed and
optimized for printing newspapers for a local news
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organization;
(b) has been engaging in the business
of manufacturing, producing and printing newspapers for at
least five years;
(c) employs at least five qualified
employees; and
(d) is not a publicly traded entity or
is no more than forty-nine percent owned, directly or
indirectly, by a publicly traded entity or subsidiary;
(3) "qualified employee" means a person who:
(a) is paid by a local news printer to
regularly perform duties related to pre-press, press and
post-press newspaper production to prepare newspapers for
transition to delivery and distribution personnel;
(b) works at a physical location in
New Mexico; and
(c) works as a qualified employee for
the local news printer for at least twenty-five percent of
the taxable year in which the credit is claimed; and
(4) "wages" means compensation paid by a
local news printer to a qualified employee through the
organization's payroll system, including those wages that the
qualified employee elects to defer or redirect or the
qualified employee's contribution to a 401(k) or cafeteria
plan program. "Wages" does not mean benefits or the
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organization's share of payroll taxes, social security or
medicare contributions, federal or state unemployment
insurance contributions or workers' compensation."
SECTION 9. Section 7-9G-1 NMSA 1978 (being Laws 2004,
Chapter 15, Section 1, as amended by Laws 2025, Chapter 107,
Section 1 and by Laws 2025, Chapter 130, Section 93) is
amended to read:
"7-9G-1. HIGH-WAGE JOBS TAX CREDIT--QUALIFYING
HIGH-WAGE JOBS.--
A. A taxpayer that is an eligible employer may
apply for, and the department may allow, a tax credit for
each new high-wage job. The credit provided in this section
may be referred to as the "high-wage jobs tax credit".
B. The purpose of the high-wage jobs tax credit is
to provide an incentive for businesses to create and fill new
high-wage jobs in New Mexico.
C. The high-wage jobs tax credit may be claimed
and allowed in an amount equal to eight and one-half percent
of the wages distributed to an eligible employee in a new
high-wage job but shall not exceed twelve thousand seven
hundred fifty dollars ($12,750) per job per qualifying
period. The high-wage jobs tax credit may be claimed by an
eligible employer for each new high-wage job performed for
the year in which the new high-wage job is created and for
consecutive qualifying periods.
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D. To receive a high-wage jobs tax credit, a
taxpayer shall file a completed application for approval of
the credit with the department once per calendar year on
forms and in the manner prescribed by the department. The
annual application shall contain the certification required
by Subsection K of this section and shall contain all
qualifying periods that closed during the calendar year for
which the application is made. Any qualifying period that
did not close in the calendar year for which the application
is made shall be denied by the department. The application
for a calendar year shall be filed no later than December 31
of the following calendar year. If a taxpayer fails to file
the annual application within the time limits provided in
this section, the application shall be denied by the
department.
E. A new high-wage job shall not be eligible for a
credit pursuant to this section for the initial qualifying
period unless the eligible employer's total number of
employees with threshold jobs on the last day of the initial
qualifying period at the location at which the job is
performed or based is at least one more than the number of
threshold jobs on the day prior to the date the new high-wage
job was created. A new high-wage job shall not be eligible
for a credit pursuant to this section for a consecutive
qualifying period unless the total number of threshold jobs
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at a location at which the job is performed or based on the
last day of that qualifying period is greater than or equal
to the number of threshold jobs at that same location on the
last day of the initial qualifying period for the new
high-wage job.
F. If a consecutive qualifying period for a new
high-wage job does not meet the wage, occupancy and residency
requirements, then the qualifying period is ineligible.
G. Except as provided in Subsection H of this
section, a new high-wage job shall not be eligible for a
credit pursuant to this section if:
(1) the new high-wage job is created due to
a business merger or acquisition or other change in business
organization;
(2) the eligible employee was terminated
from employment in New Mexico by another employer involved in
the business merger or acquisition or other change in
business organization with the taxpayer; and
(3) the new high-wage job is performed by:
(a) the person who performed the job or
its functional equivalent prior to the business merger or
acquisition or other change in business organization; or
(b) a person replacing the person who
performed the job or its functional equivalent prior to a
business merger or acquisition or other change in business
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organization.
H. A new high-wage job that was created by another
employer and for which an application for the high-wage jobs
tax credit was received and is under review by the department
prior to the time of the business merger or acquisition or
other change in business organization shall remain eligible
for the high-wage jobs tax credit for the balance of the
consecutive qualifying periods. The new employer that
results from a business merger or acquisition or other change
in business organization may only claim the high-wage jobs
tax credit for the balance of the consecutive qualifying
periods for which the new high-wage job is otherwise
eligible.
I. A new high-wage job shall not be eligible for a
credit pursuant to this section if the job is created due to
an eligible employer entering into a contract or becoming a
subcontractor to a contract with a governmental entity that
replaces one or more entities performing functionally
equivalent services for the governmental entity unless the
job is a new high-wage job that was not being performed by an
employee of the replaced entity.
J. A new high-wage job shall not be eligible for a
credit pursuant to this section if the eligible employer has
more than one business location in New Mexico from which it
conducts business and the requirements of Subsection E of
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this section are satisfied solely by moving the job from one
business location of the eligible employer in New Mexico to
another business location of the eligible employer in
New Mexico.
K. With respect to each annual application for a
high-wage jobs tax credit, the employer shall certify and
include:
(1) the amount of wages paid to each
eligible employee in a new high-wage job during the
qualifying period;
(2) the number of weeks each position was
occupied during the qualifying period;
(3) whether the new high-wage job was in a
municipality with a population of sixty thousand or more or
with a population of less than sixty thousand according to
the most recent federal decennial census and whether the job
was in the unincorporated area of a county;
(4) which qualifying period the application
pertains to for each eligible employee;
(5) the total number of employees employed
by the employer at the job location on the day prior to the
qualifying period and on the last day of the qualifying
period;
(6) the total number of threshold jobs
performed or based at the eligible employer's location on the
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day prior to the qualifying period and on the last day of the
qualifying period;
(7) for an eligible employer that has more
than one business location in New Mexico from which it
conducts business, the total number of threshold jobs
performed or based at each business location of the eligible
employer in New Mexico on the day prior to the qualifying
period and on the last day of the qualifying period;
(8) whether the eligible employer is
receiving or is eligible to receive development training
program assistance pursuant to Section 21-19-7 NMSA 1978;
(9) whether the eligible employer has ceased
business operations at any of its business locations in
New Mexico; and
(10) whether the application is precluded by
Subsection O of this section.
L. Any person who willfully submits a false,
incorrect or fraudulent certification required pursuant to
Subsection K of this section shall be subject to all
applicable penalties under the Tax Administration Act, except
that the amount on which the penalty is based shall be the
total amount of credit requested on the application for
approval.
M. Except as provided in Subsection N of this
section, an approved high-wage jobs tax credit shall be
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claimed against the taxpayer's modified combined tax
liability and shall be filed with the return due immediately
following the date of the credit approval. If the credit
exceeds the taxpayer's modified combined tax liability, the
excess shall be refunded to the taxpayer.
N. If the taxpayer ceases business operations in
New Mexico while an application for credit approval is
pending or after an application for credit has been approved
for any qualifying period for a new high-wage job, the
department shall not grant an additional high-wage jobs tax
credit to that taxpayer except as provided in Subsection O of
this section and shall extinguish any amount of credit
approved for that taxpayer that has not already been claimed
against the taxpayer's modified combined tax liability.
O. A taxpayer that has received a high-wage jobs
tax credit shall not submit a new application for the credit
for a minimum of two calendar years from the closing date of
the last qualifying period for which the taxpayer received
the credit if the taxpayer lost eligibility to claim the
credit from a previous application pursuant to Subsection N
of this section.
P. The economic development department and the
taxation and revenue department shall report to the
appropriate interim legislative committee each year the cost
of the high-wage jobs tax credit to the state and its impact
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on company recruitment and job creation.
Q. As used in this section:
(1) "benefits" means all remuneration for
work performed that is provided to an employee in whole or in
part by the employer, other than wages, including the
employer's contributions to insurance programs, health
care, medical, dental and vision plans, life insurance,
employer contributions to pensions, such as a 401(k), and
employer-provided services, such as child care, offered by an
employer to the employee;
(2) "consecutive qualifying period" means
each of the three qualifying periods successively following
the qualifying period in which the new high-wage job was
created;
(3) "department" means the taxation and
revenue department;
(4) "dependent" means "dependent" as defined
in 26 U.S.C. 152(a), as that section may be amended or
renumbered;
(5) "domicile" means the sole place where an
individual has a true, fixed, permanent home. It is the
place where the individual has a voluntary, fixed habitation
of self and family with the intention of making a permanent
home;
(6) "eligible employee" means an individual
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who is employed in New Mexico by an eligible employer and who
is a resident of New Mexico; "eligible employee" does not
include an individual who:
(a) is a dependent of the employer;
(b) if the employer is an estate or
trust, is a grantor, beneficiary or fiduciary of the estate
or trust or is a dependent of a grantor, beneficiary or
fiduciary of the estate or trust;
(c) if the employer is a corporation,
is a dependent of an individual who owns, directly or
indirectly, more than fifty percent in value of the
outstanding stock of the corporation; or
(d) if the employer is an entity other
than a corporation, estate or trust, is a dependent of an
individual who owns, directly or indirectly, more than fifty
percent of the capital and profits interests in the entity;
(7) "eligible employer" means an employer
that, during the applicable qualifying period, would be
eligible for development training program assistance under
the fiscal year 2019 policies defining development training
program eligibility developed by the industrial training
board in accordance with Section 21-19-7 NMSA 1978;
(8) "modified combined tax liability" means
the total liability for the reporting period for the gross
receipts tax imposed by Section 7-9-4 NMSA 1978 together with
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any tax collected at the same time and in the same manner as
the gross receipts tax, such as the compensating tax, the
withholding tax, the interstate telecommunications gross
receipts tax, the surcharges imposed by Section 63-9D-5 NMSA
1978 and the surcharge imposed by Section 63-9F-11 NMSA 1978,
minus the amount of any credit other than the high-wage jobs
tax credit applied against any or all of these taxes or
surcharges; but "modified combined tax liability" excludes
all amounts collected with respect to local option gross
receipts taxes;
(9) "new high-wage job" means a new job
created in New Mexico by an eligible employer on or after
July 1, 2004 and prior to July 1, 2036 that is occupied for
at least forty-four weeks of a qualifying period by an
eligible employee who is paid wages calculated for the
qualifying period to be at least:
(a) sixty thousand dollars ($60,000) if
the job is performed or based in or within ten miles of the
external boundaries of a municipality with a population of
sixty thousand or more according to the most recent federal
decennial census or in a class H county; and
(b) forty thousand dollars ($40,000) if
the job is performed or based in a municipality with a
population of less than sixty thousand according to the most
recent federal decennial census or in the unincorporated
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area, that is not within ten miles of the external boundaries
of a municipality with a population of sixty thousand or
more, of a county other than a class H county;
(10) "new job" means a job that is occupied
by an employee who has not been employed in New Mexico by the
eligible employer in the three years prior to the date of
hire;
(11) "qualifying period" means the period of
twelve months beginning on the day an eligible employee
begins working in a new high-wage job or the period of twelve
months beginning on the anniversary of the day an eligible
employee began working in a new high-wage job;
(12) "resident" means a natural person whose
domicile is in New Mexico at the time of hire or within one
hundred eighty days of the date of hire;
(13) "threshold job" means a job that:
(a) is occupied for at least forty-four
weeks of the first fifty-two weeks of employment by an
eligible employee; provided that the fifty-two-week period
begins on the day the eligible employee occupies the job; and
(b) meets the wage requirements for a
"new high-wage job"; and
(14) "wages" means all compensation paid by
an eligible employer to an eligible employee through the
employer's payroll system, including those wages that the
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employee elects to defer or redirect or the employee's
contribution to a 401(k) or cafeteria plan program, but
"wages" does not include benefits or the employer's share of
payroll taxes, social security or medicare contributions,
federal or state unemployment insurance contributions or
workers' compensation."
SECTION 10. APPROPRIATIONS.--
A. Twenty-six million six thousand dollars
($26,006,000) is appropriated from the general fund to the
department of finance and administration for expenditure in
fiscal year 2027 to pay all costs attributable to the general
fund of providing a salary increase of one percent to
employees in budgeted positions who have completed their
probationary period subject to satisfactory job performance.
Any unexpended balance remaining at the end of fiscal year
2027 shall revert to the general fund. The salary increases
shall be effective the first full pay period after July 1,
2026, and distributed as follows:
(1) three hundred twenty-four thousand nine
hundred dollars ($324,900) for permanent legislative
employees, including permanent employees of the legislative
council service, legislative finance committee, legislative
education study committee, legislative building services,
house and senate, house and senate chief clerks' office and
house and senate leadership;
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(2) three million four hundred seventy-seven
thousand three hundred dollars ($3,477,300) for judicial
permanent employees, including magistrate judges, elected
district attorneys, district attorney permanent employees,
public defender department permanent employees, judicial
hearing officers and judicial special commissioners, supreme
court justices, court of appeals judges, district court
judges and metropolitan court judges;
(3) nine million five hundred ninety-six
thousand seven hundred dollars ($9,596,700) for incumbents in
positions in the classified service governed by the Personnel
Act, for incumbents in the New Mexico state police career pay
system and for executive exempt employees;
(4) twelve million twenty-three thousand
eight hundred dollars ($12,023,800) to the higher education
department for nonstudent faculty and staff of two-year and
four-year public post-secondary educational institutions; and
(5) five hundred eighty-three thousand three
hundred dollars ($583,300) to the higher education department
for nonstudent faculty and staff of the New Mexico military
institute, New Mexico school for the blind and visually
impaired and New Mexico school for the deaf.
B. Thirty-six million forty-three thousand seven
hundred dollars ($36,043,700) is appropriated from the
general fund to the state equalization guarantee distribution
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of the public school fund for expenditure in fiscal year 2027
to recruit and retain public school personnel, comparable to
an average one percent salary increase. Any unexpended
balance remaining at the end of fiscal year 2027 shall revert
to the general fund.
C. Six hundred sixty-two thousand dollars
($662,000) is appropriated from the general fund to the
transportation distribution of the public school fund for
expenditure in fiscal year 2027 to recruit and retain public
school transportation personnel, comparable to an average one
percent salary increase. Any unexpended balance remaining at
the end of fiscal year 2027 shall revert to the general fund.
D. For those state employees whose salaries are
referenced in or received as a result of nongeneral fund
appropriations in the General Appropriation Act of 2026, the
department of finance and administration shall transfer from
the appropriate fund to the appropriate agency the amount
required for the salary increases equivalent to those
provided for in this section. Such amounts are appropriated
for expenditure in fiscal year 2027. Any unexpended balances
remaining at the end of fiscal year 2027 shall revert to the
appropriate fund.
SECTION 11. APPLICABILITY.--The provisions of Sections
1 through 4 and 6 through 8 of this act apply to taxable
years beginning on or after January 1, 2027.
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SECTION 12. EFFECTIVE DATE.--The effective date of the
provisions of Section 5 of this act is July 1, 2027.