NMSA 1978, § 7-1-6.46 — 7-1-6.46

Distribution to municipalities; offset for food deduction
and health care practitioner services deduction.

# A.

For a municipality that did not have in effect on June 30, 2019 a municipal hold
harmless gross receipts tax through an ordinance and that has a population of less than
ten thousand according to the most recent federal decennial census, a distribution
pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the municipality in an amount,
subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978,
equal to the applicable maximum distribution for the municipality.

# B.

For a municipality that did not have in effect on June 30, 2019 a municipal hold
harmless gross receipts tax through an ordinance and has a population of at least ten
thousand according to the most recent federal decennial census, a distribution pursuant
to Section 7-1-6.1 NMSA 1978 shall be made to the municipality in an amount, subject
to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to
the following percentages of the applicable maximum distribution for the municipality:
(1) for a municipality that has a municipal poverty level two percentage points
or more above the state poverty level, eighty percent;
(2) for a municipality that has a poverty level of less than two percentage
points above or below the state poverty level, fifty percent; and
(3) for a municipality that has a poverty level two percentage points or more
below the state poverty level, thirty percent.

# C.

For a municipality not described in Subsection A or B of this section, a
distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the municipality in
an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15
NMSA 1978, equal to the applicable maximum distribution for the municipality multiplied
by the following percentages:
(1) on or after July 1, 2025 and prior to July 1, 2026, twenty-eight percent;
(2) on or after July 1, 2026 and prior to July 1, 2027, twenty-one percent;
(3) on or after July 1, 2027 and prior to July 1, 2028, fourteen percent;
(4) on or after July 1, 2028 and prior to July 1, 2029, seven percent; and
(5) on and after July 1, 2029, zero percent.

# D.

A distribution pursuant to this section is in lieu of revenue that would have been
received by the municipality but for the deductions provided by Sections 7-9-92 and 7-9-
93 NMSA 1978. The distribution shall be considered gross receipts tax revenue and
shall be used by the municipality in the same manner as gross receipts tax revenue,
including payment of gross receipts tax revenue bonds.

# E.

If the changes made by Laws 2022, Chapter 47 to the distributions made
pursuant to this section impair the ability of a municipality to meet its principal or interest
payment obligations for revenue bonds that are outstanding prior to July 1, 2022 and
that are secured by the pledge of all or part of the municipality's revenue from the
distribution made pursuant to this section, then the amount distributed pursuant to this
section to that municipality shall be increased by an amount sufficient to meet the
required payment; provided that the total amount distributed to that municipality
pursuant to this section does not exceed the amount that would have been due that
municipality pursuant to this section as it was in effect on June 30, 2022.

# F.

For the purposes of this section:
(1) "business locations attributable to the municipality" means business
locations:
(a) sourced to the municipality pursuant to Section 7-1-14 NMSA 1978; and
(b) sourced to land owned by the state, commonly known as the "state
fairgrounds", within the exterior boundaries of the municipality;
(2) "maximum distribution" means:
(a) for a municipality that did not have in effect on June 30, 2019 a municipal
hold harmless gross receipts tax, the total deductions claimed pursuant to Sections 7-9-
92 and 7-9-93 NMSA 1978 for the month by taxpayers from business locations
attributable to the municipality multiplied by the sum of the combined rate of all
municipal local option gross receipts taxes in effect in the municipality for the month
plus one and two hundred twenty-five thousandths percent; and
(b) for a municipality not described in Subparagraph (a) of this paragraph, the
total deductions claimed pursuant to Sections 7-9-92 and 7-9-93 NMSA 1978 for the
month by taxpayers from business locations sourced to the municipality multiplied by
the sum of the combined rate of all municipal local option gross receipts taxes in effect
in the municipality on January 1, 2007 plus one and two hundred twenty-five
thousandths percent; and
(3) "poverty level" means the percentage of persons in poverty, according to
the most recent five-year American community survey, as published by the United
States census bureau. For the purposes of determining the poverty level of a
municipality, "poverty level" means the percentage of persons in poverty in a
municipality, according to the most recent five-year American community survey, as
published by the United States census bureau, that includes adequate data to make a
determination as to the poverty level of the municipality.

# G.

A distribution pursuant to this section may be adjusted for a distribution made to
a tax increment development district with respect to a portion of a gross receipts tax
increment dedicated by a municipality pursuant to the Tax Increment for Development
Act [Chapter 5, Article 15 NMSA 1978].