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HOUSE BILL 326
57
TH LEGISLATURE
-
STATE
OF
NEW
MEXICO
-
FIRST SESSION
,
2025
INTRODUCED BY
Anita Gonzales and Joseph L. Sanchez and Angelita Mejia
and Harlan Vincent and Susan K. Herrera
AN ACT
RELATING TO TAXATION; CREATING THE SMALL BUSINESS DISASTER
RELIEF INCOME TAX CREDIT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. A new section of the Income Tax Act is enacted
to read:
"[NEW MATERIAL] SMALL BUSINESS DISASTER RELIEF INCOME TAX
CREDIT.--
A. A taxpayer who is not a dependent of another
individual and who is the owner of a small business located in
an area declared as a disaster area by the governor may claim a
credit against the taxpayer's tax liability imposed pursuant to
the Income Tax Act as provided in this section. The credit
provided by this section may be referred to as the "small
business disaster relief income tax credit".
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B. The amount of credit shall be in an amount equal
to five thousand dollars ($5,000).
C. To be eligible for the credit, the taxpayer
shall be an owner of a business that:
(1) is located in an area declared by the
governor as a disaster in the taxable year for which the credit
is claimed;
(2) has been in operation for at least two
consecutive taxable years, including the taxable year for which
the credit is claimed;
(3) can demonstrate that it has sustained a
thirty percent decline in gross revenue due to the disaster;
and
(4) had an annual gross revenue of less than
two million dollars ($2,000,000) in the taxable year for which
the credit is claimed.
D. A taxpayer shall apply for certification of
eligibility for the tax credit from the economic development
department on forms and in the manner prescribed by that
department. Except as provided in Subsections F and G of this
section, only one tax credit shall be certified per taxpayer
per taxable year. If the economic development department
determines that the taxpayer meets the requirements of this
section, that department shall issue a dated certificate of
eligibility to the taxpayer providing the amount of tax credit
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for which the taxpayer is eligible and the taxable years in
which the credit may be claimed. The economic development
department shall provide the department with the certificates
of eligibility issued pursuant to this subsection in an
electronic format at regularly agreed upon intervals.
E. A taxpayer allowed to claim the credit shall
claim the credit in a manner required by the department. The
credit shall be claimed within one year of receiving
certification from the economic development department. The
taxpayer shall claim the amount certified and approved against
the taxpayer's income tax liability. Any amount of credit that
exceeds the taxpayer's income tax liability 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 credit that would have been
claimed on a joint return.
G. A taxpayer may be allocated the right to claim
the credit in a 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 that business entity has met all
of the 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
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pursuant to this section.
H. The 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
credit."
SECTION 2. APPLICABILITY.--The provisions of this act
apply to taxable years beginning on or after January 1, 2025.
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