HB 368
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AN ACT
RELATING TO THE HIGH-WAGE JOBS TAX CREDIT; AMENDING THE
DEFINITION OF "THRESHOLD JOB" APPLICABLE TO THE CREDIT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 7-9G-1 NMSA 1978 (being Laws 2004,
Chapter 15, Section 1, as amended) 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 urban and rural 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. HB 368
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D. To receive a high-wage jobs tax credit, a
taxpayer shall file an 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.
The department shall make a determination on the application
within one hundred eighty days of the date on which the
application was filed.
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 HB 368
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for a credit pursuant to this section for a consecutive
qualifying period unless the total number of threshold jobs
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 HB 368
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performed the job or its functional equivalent prior to a
business merger or acquisition or other change in business
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 HB 368
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more than one business location in New Mexico from which it
conducts business and the requirements of Subsection E of
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; HB 368
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(6) the total number of threshold jobs
performed or based at the eligible employer's location on the
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. HB 368
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M. Except as provided in Subsection N of this
section, an approved high-wage jobs tax credit shall be
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 HB 368
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appropriate interim legislative committee each year the cost
of the high-wage jobs tax credit to the state and its impact
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 HB 368
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home;
(6) "eligible employee" means an individual
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 HB 368
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the total liability for the reporting period for the gross
receipts tax imposed by Section 7-9-4 NMSA 1978 together with
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, 2026 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) for a new high-wage job created
prior to July 1, 2015: 1) forty thousand dollars ($40,000)
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 2)
twenty-eight thousand dollars ($28,000) if the job is HB 368
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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 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; and
(b) for a new high-wage job created on
or after July 1, 2015: 1) 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 2) 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 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 HB 368
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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
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 2. APPLICABILITY.--The provisions of this act
apply to applications for a high-wage jobs tax credit received
by the taxation and revenue department on or after the HB 368
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effective date of this act.