us-nm/stat
NMSA 1978, § 7-2A-16 — Intergovernmental business tax credit
A.
With respect to the net income of a taxpayer engaged in the transaction of
business occurring after July 1, 1997 from a new business on Indian land, the person
who is liable for the payment of the corporate income tax may claim a credit as provided
in Subsection D of this section against the corporate income tax for the aggregate
amount of tax paid to an Indian nation, tribe or pueblo located in whole or in part within
New Mexico.
B.
The credit provided by this section may be referred to as the "intergovernmental
business tax credit".
C.
As used in this section:
(1) "aggregate amount of tax" means the total of all taxes imposed by an
Indian nation, tribe or pueblo located in whole or in part in New Mexico on income
derived from the new business's activity on Indian land, except a tax shall not be
included in that total if the tax is eligible for a credit pursuant to the provisions of Section
7-29C-1 NMSA 1978 or any other intergovernmental tax credit that provides a similar
tax credit;
(2) "Indian land" means all land in New Mexico that on March 1, 1997 was:
(a) within the exterior boundaries of an Indian reservation or pueblo grant; or
(b) lands held in trust by the United States for an individual Indian nation, tribe
or pueblo;
(3) "new business" means a manufacturer or processor that occupies a new
business facility or a grower that commences operation in New Mexico on or after July
1, 1997; and
(4) "new business facility" means a facility on Indian land that satisfies the
following requirements:
(a) the facility is employed by the taxpayer in the operation of a revenue-
producing enterprise. The facility shall not be considered a "new business facility" in the
hands of the taxpayer if the taxpayer's only activity with respect to the facility is to lease
it to another person;
(b) the facility is acquired by or leased to the taxpayer on or after January 1,
1997. The facility shall be deemed to have been acquired by or leased to the taxpayer
on or after the specified date if the transfer of title to the taxpayer, the transfer of
possession pursuant to a binding contract to transfer title to the taxpayer or the
commencement of the term of the lease to the taxpayer occurs on or after that date or if
the facility is constructed, erected or installed by or on behalf of the taxpayer, the
construction, erection or installation is completed on or after that date;
(c) the facility is a newly acquired facility in which the taxpayer is not
continuing the operation of the same or a substantially identical revenue-producing
enterprise that previously was in operation on the Indian land of the Indian nation, tribe
or pueblo where the facility is now located; a facility is a "newly acquired facility" if the
facility was acquired or leased by the taxpayer from another person even if the facility
was employed in a revenue-producing enterprise on the Indian land of the same Indian
nation, tribe or pueblo immediately prior to the transfer of the title to the facility to the
taxpayer or immediately prior to the commencement of the term of the lease of the
facility to the taxpayer by another person provided that the revenue-producing
enterprise of the previous occupant was not the same or substantially identical to the
taxpayer's revenue-producing enterprise; and
(d) the facility is not a replacement business facility for a business facility that
existed on the Indian land of the Indian nation, tribe or pueblo where the business is
now located.
D.
The intergovernmental business tax credit shall be determined separately for
each reporting period and shall be equal to fifty percent of the lesser of:
(1) the aggregate amount of tax paid by a taxpayer; or
(2) the amount of the taxpayer's corporate income tax due for the reporting
period from the new business's activity conducted on Indian land.
E.
The department shall administer and interpret the provisions of this section in
accordance with the provisions of the Tax Administration Act [Chapter 7, Article 1
NMSA 1978].
F.
The burden of showing entitlement to a credit authorized by this section is on the
taxpayer claiming it, and the taxpayer shall furnish to the appropriate tax collecting
agency, in the manner determined by the department, proof of payment of the
aggregate amount of tax on which the credit is based.
G.
For a taxpayer qualifying for the credit provided by this section that conducts
business in New Mexico both on and off Indian land, the taxpayer's corporate income
tax liability derived from the new business activity conducted on Indian land shall be
equal to the sum of the products of one-half of the taxpayer's New Mexico corporate
income tax liability before application of the credit provided by this section multiplied by
the payroll factor and one-half of the taxpayer's New Mexico corporate income tax
liability before application of the credit provided by this section multiplied by the property
factor. The factors shall be determined as follows:
(1) the payroll factor is a fraction, the numerator of which is the amount of
compensation paid to employees employed during the tax period by the taxpayer in his
new business on Indian land, and the denominator of which is the total amount of
compensation paid to employees employed during the tax period by the taxpayer in all
of New Mexico, including Indian land; and
(2) the property factor is a fraction, the numerator of which is the average
value of the taxpayer's real and tangible personal property owned or rented and used in
the new business on Indian land in New Mexico during the tax period and the
denominator of which is the average value of all the taxpayer's real and tangible
property owned or rented and used in New Mexico, including on Indian land, during the
tax period.
Source: official text