The act allows eligible small businesses to apply for a small business pandemic reparations tax credit against their personal or corporate income tax liabilities. If the tax credit exceeds their tax liabilities, the excess amount can be refunded or carried forward for up to 20 years. This initiative recognizes and addresses economic losses that small businesses have suffered due to state interventions during the pandemic. Furthermore, an appropriation of $55 million from the general fund is mandated to support this fund and ensure that claims can be adequately compensated.
Summary
Senate Bill 143, known as the Small Business Pandemic Takings Reparations Act, aims to provide a reparations process for small businesses adversely affected by public health orders during the COVID-19 pandemic. This bill establishes a Pandemic Reparations Division within the Taxation and Revenue Department, which is responsible for administering the reparations program. The division will oversee the application process for small businesses seeking compensation for property taken or damages incurred due to pandemic-related restrictions. The definition of 'small business' in the context of this bill includes any business in New Mexico employing fewer than 150 employees.
Execution
Ultimately, SB143 represents an effort to mitigate some of the economic fallout for small businesses resulting from the pandemic, but its success will likely depend on the effective implementation of the new division and its ability to process claims efficiently. The structure of the claims process, including the requirement for supporting documentation related to revenue loss and compliance costs incurred from public health orders, will be critical in shaping the relief's accessibility and fairness.
Contention
While the bill has received support for its intentions of aiding local businesses, some of the discussions surrounding SB143 may highlight concerns about the bureaucratic process required for small businesses to access these reparations. Stakeholders might debate the adequacy of the proposed funding and whether it is sufficient to cover potential claims from businesses nationwide. Furthermore, the definition of 'just compensation' and the criteria for evaluating losses are likely to draw further scrutiny as the process unfolds, as these factors could lead to disparities in how claims are handled and returned.