New Mexico 2025 Regular Session

New Mexico House Bill HB506 Compare Versions

Only one version of the bill is available at this time.

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28	28	HOUSE BILL 506
29	29	57
30	30	TH LEGISLATURE
31	31	-
32	32
33	33	STATE
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35	35	OF
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37	37	NEW
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39	39	MEXICO
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41	41	-
42	42	FIRST SESSION
43	43	,
44	44
45	45	2025
46	46	INTRODUCED BY
47	47	Art De La Cruz and Luis M. Terrazas and Doreen Y. Gallegos
48	48	and Mark Duncan
49	49	AN ACT
50	50	RELATING TO TAXATION; CREATING THE HOTEL RENOVATION INCOME TAX
51	51	CREDIT AND THE HOTEL RENOVATION CORPORATE INCOME TAX CREDIT.
52	52	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
53	53	SECTION 1. A new section of the Income Tax Act is enacted
54	54	to read:
55	55	"[NEW MATERIAL] HOTEL RENOVATION INCOME TAX CREDIT.--
56	56	A. A taxpayer who is not a dependent of another
57	57	individual and who, beginning on the effective date of this
58	58	section and prior to January 1, 2035, incurs qualifying costs
59	59	for a hotel renovation project may claim a credit against the
60	60	taxpayer's tax liability imposed pursuant to the Income Tax
61	61	Act. The tax credit provided by this section may be referred
62	62	to as the "hotel renovation income tax credit".
63	63	B. The credit provided by this section shall be in
64	64	.230837.1 underscored material = new
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91	91	an amount equal to the following percentages of qualifying
92	92	costs incurred by a taxpayer for a hotel renovation project:
93	93	(1) thirty percent of qualifying costs for a
94	94	hotel that receives a certification level of LEED-NC silver; or
95	95	(2) twenty percent of qualifying costs.
96	96	C. Prior to beginning a hotel renovation project, a
97	97	taxpayer shall apply for pre-certification from the tourism
98	98	department, on forms and in the manner prescribed by the
99	99	tourism department. The application shall include a proposal
100	100	for the hotel renovation project, including a detailed
101	101	description of the project, projected costs, the expected
102	102	beginning and completion dates and a hotel renovation project
103	103	plan, including phases of construction, if any. If the tourism
104	104	department determines that the projected costs are likely to
105	105	meet the requirements for qualifying costs, it shall issue a
106	106	pre-certification to the taxpayer; provided that pre-
107	107	certification received pursuant to this subsection shall not
108	108	mean that the actual costs for the hotel renovation project
109	109	will be approved for a credit provided by this section.
110	110	D. Within one calendar year of completion of a
111	111	hotel renovation project, the taxpayer shall apply for
112	112	certification of eligibility from the tourism department on
113	113	forms and in the manner prescribed by the tourism department
114	114	and including an affidavit from a certified public accountant
115	115	verifying that the qualifying costs were incurred by the
116	116	.230837.1
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144	144	taxpayer and meet the requirements of this section. The
145	145	aggregate amount of credits that may be certified as eligible
146	146	in a calendar year is thirty million dollars ($30,000,000).
147	147	Completed applications shall be considered in the order
148	148	received. If a taxpayer is eligible for the credit, a dated
149	149	certificate of eligibility shall be issued to the taxpayer
150	150	providing the amount of credit for which the taxpayer is
151	151	eligible; provided that applications for certification received
152	152	after the limitation on the aggregate amount of credits has
153	153	been met in a calendar year shall not be approved.
154	154	E. That portion of approved credit claimed by a
155	155	taxpayer that exceeds the taxpayer's income tax liability in
156	156	the taxable year in which the credit is claimed may be carried
157	157	forward for five consecutive taxable years.
158	158	F. Married individuals filing separate returns for
159	159	a taxable year for which they could have filed a joint return
160	160	may each claim only one-half of the credit that would have been
161	161	claimed on a joint return.
162	162	G. A taxpayer may be allocated the right to claim
163	163	the credit provided by this section in proportion to the
164	164	taxpayer's ownership interest if the taxpayer owns an interest
165	165	in a business entity that is taxed for federal income tax
166	166	purposes as a partnership or limited liability company and that
167	167	business entity has met all of the requirements to be eligible
168	168	for the credit. The total credit claimed by all members of the
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197	197	partnership or limited liability company shall not exceed the
198	198	allowable credit pursuant to this section.
199	199	H. A taxpayer allowed a credit pursuant to this
200	200	section shall report the amount of the credit to the taxation
201	201	and revenue department on a form and in a manner required by
202	202	the department.
203	203	I. The credit provided by this section shall be
204	204	included in the tax expenditure budget pursuant to Section
205	205	7-1-84 NMSA 1978, including the annual aggregate cost of the
206	206	credit.
207	207	J. As used in this section:
208	208	(1) "hotel" means a building in New Mexico:
209	209	(a) where, for consideration, lodging is
210	210	regularly furnished to the general public; and
211	211	(b) that provides at least fifteen guest
212	212	rooms or suites for overnight guest use;
213	213	(2) "hotel renovation project" means the
214	214	restoration, renovation and rehabilitation of at least forty
215	215	percent of the guest rooms or suites of a hotel. "Hotel
216	216	renovation project" does not mean new construction;
217	217	(3) "LEED-NC silver" means the rating in
218	218	compliance with, or exceeding, the third-highest rating awarded
219	219	by the LEED certification process for new buildings and major
220	220	renovations. As used in this paragraph, "LEED" means the most
221	221	current leadership in energy and environmental design green
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250	250	building rating system guidelines developed and adopted by the
251	251	United States green building council; and
252	252	(4) "qualifying costs" means costs incurred by
253	253	the taxpayer:
254	254	(a) for planning, designing,
255	255	construction and construction-related equipment for the
256	256	restoration, renovation and rehabilitation of a hotel;
257	257	(b) in an amount equal to or greater
258	258	than: 1) twenty-five thousand dollars ($25,000) in a county
259	259	with a population of fifteen thousand or less according to the
260	260	most recent federal decennial census; or 2) forty thousand
261	261	dollars ($40,000) in a county with a population greater than
262	262	fifteen thousand according to the most recent federal decennial
263	263	census; and
264	264	(c) that shall not include any amount
265	265	for which a tax credit pursuant to the federal new markets tax
266	266	credit has been claimed pursuant to Section 45D of the Internal
267	267	Revenue Code, as that section may be amended or renumbered."
268	268	SECTION 2. A new section of the Corporate Income and
269	269	Franchise Tax Act is enacted to read:
270	270	"[NEW MATERIAL] HOTEL RENOVATION CORPORATE INCOME TAX
271	271	CREDIT.--
272	272	A. A taxpayer that, beginning on the effective date
273	273	of this section and prior to January 1, 2035, incurs qualifying
274	274	costs for a hotel renovation project may claim a credit against
275	275	.230837.1
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303	303	the taxpayer's tax liability imposed pursuant to the Corporate
304	304	Income and Franchise Tax Act. The tax credit provided by this
305	305	section may be referred to as the "hotel renovation corporate
306	306	income tax credit".
307	307	B. The credit provided by this section shall be in
308	308	an amount equal to the following percentages of qualifying
309	309	costs incurred by a taxpayer for a hotel renovation project:
310	310	(1) thirty percent of qualifying costs for a
311	311	hotel that receives a certification level of LEED-NC silver; or
312	312	(2) twenty percent of qualifying costs.
313	313	C. Prior to beginning a hotel renovation project, a
314	314	taxpayer shall apply for pre-certification from the tourism
315	315	department, on forms and in the manner prescribed by the
316	316	tourism department. The application shall include a proposal
317	317	for the hotel renovation project, including a detailed
318	318	description of the project, projected costs, the expected
319	319	beginning and completion dates and a hotel renovation project
320	320	plan, including phases of construction, if any. If the tourism
321	321	department determines that the projected costs are likely to
322	322	meet the requirements for qualifying costs, it shall issue a
323	323	pre-certification to the taxpayer; provided that pre-
324	324	certification received pursuant to this subsection shall not
325	325	mean that the actual costs for the hotel renovation project
326	326	will be approved for a credit provided by this section.
327	327	D. Within one calendar year of completion of a
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356	356	hotel renovation project, the taxpayer shall apply for
357	357	certification of eligibility from the tourism department on
358	358	forms and in the manner prescribed by the tourism department
359	359	and including an affidavit from a certified public accountant
360	360	verifying that the qualifying costs were incurred by the
361	361	taxpayer and meet the requirements of this section. The
362	362	aggregate amount of credits that may be certified as eligible
363	363	in a calendar year is thirty million dollars ($30,000,000).
364	364	Completed applications shall be considered in the order
365	365	received. If a taxpayer is eligible for the credit, a dated
366	366	certificate of eligibility shall be issued to the taxpayer
367	367	providing the amount of credit for which the taxpayer is
368	368	eligible; provided that applications for certification received
369	369	after the limitation on the aggregate amount of credits has
370	370	been met in a calendar year shall not be approved.
371	371	E. That portion of approved credit claimed by a
372	372	taxpayer that exceeds the taxpayer's income tax liability in
373	373	the taxable year in which the credit is claimed may be carried
374	374	forward for five consecutive taxable years.
375	375	F. A taxpayer allowed a credit pursuant to this
376	376	section shall report the amount of the credit to the taxation
377	377	and revenue department on a form and in a manner required by
378	378	the department.
379	379	G. The credit provided by this section shall be
380	380	included in the tax expenditure budget pursuant to Section
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409	409	7-1-84 NMSA 1978, including the annual aggregate cost of the
410	410	credit.
411	411	H. As used in this section:
412	412	(1) "hotel" means a building in New Mexico:
413	413	(a) where, for consideration, lodging is
414	414	regularly furnished to the general public; and
415	415	(b) that provides at least fifteen guest
416	416	rooms or suites for overnight guest use;
417	417	(2) "hotel renovation project" means the
418	418	restoration, renovation and rehabilitation of at least forty
419	419	percent of the guest rooms or suites of a hotel. "Hotel
420	420	renovation project" does not mean new construction;
421	421	(3) "LEED-NC silver" means the rating in
422	422	compliance with, or exceeding, the third-highest rating awarded
423	423	by the LEED certification process for new buildings and major
424	424	renovations. As used in this paragraph, "LEED" means the most
425	425	current leadership in energy and environmental design green
426	426	building rating system guidelines developed and adopted by the
427	427	United States green building council; and
428	428	(4) "qualifying costs" means costs incurred by
429	429	the taxpayer:
430	430	(a) for planning, designing,
431	431	construction and construction-related equipment for the
432	432	restoration, renovation and rehabilitation of a hotel;
433	433	(b) in an amount equal to or greater
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462	462	than: 1) twenty-five thousand dollars ($25,000) in a county
463	463	with a population of fifteen thousand or less according to the
464	464	most recent federal decennial census; or 2) forty thousand
465	465	dollars ($40,000) in a county with a population greater than
466	466	fifteen thousand according to the most recent federal decennial
467	467	census; and
468	468	(c) that shall not include any amount
469	469	for which a tax credit pursuant to the federal new markets tax
470	470	credit has been claimed pursuant to Section 45D of the Internal
471	471	Revenue Code, as that section may be amended or renumbered."
472	472	SECTION 3. APPLICABILITY.--The provisions of this act
473	473	apply to taxable years beginning on or after January 1, 2025.
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475	475	.230837.1