SENATE BILL 207

56th legislature - STATE OF NEW MEXICO - second session, 2024

INTRODUCED BY

Peter Wirth

 

 

 

 

 

AN ACT

RELATING TO PROPERTY; AMENDING PROVISIONS OF THE LODGERS' TAX ACT; AUTHORIZING AN OCCUPANCY SURTAX ON CERTAIN SHORT-TERM RENTALS PURSUANT TO THE LODGERS' TAX ACT; REQUIRING LOCAL GOVERNMENTS THAT IMPOSE THE OCCUPANCY SURTAX TO USE THE PROCEEDS TO DEFRAY THE COST OF AFFORDABLE HOUSING; EXCLUDING CERTAIN SHORT-TERM RENTAL PROPERTY FROM THE DEFINITION OF "RESIDENTIAL PROPERTY" IN THE PROPERTY TAX CODE; AMENDING FORM REQUIREMENTS FOR NOTICES OF VALUATION SENT TO PROPERTY OWNERS; REPEALING A SECTION OF THE PROPERTY TAX CODE THAT REQUIRES PROPERTY TO BE PRESUMED CLASSIFIED AS NONRESIDENTIAL PROPERTY.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 3-38-14 NMSA 1978 (being Laws 1969, Chapter 199, Section 2, as amended) is amended to read:

     "3-38-14. DEFINITIONS.--As used in the Lodgers' Tax Act:

          A. "gross taxable rent" means the total amount of rent paid for lodging, not including the state gross receipts tax or local sales taxes;

          B. "lodging" means the transaction of furnishing rooms or other accommodations by a vendor to a vendee who for rent uses, possesses or has the right to use or possess the rooms or other units of accommodations in or at a taxable premises;

          C. "lodgings" means the rooms or other accommodations furnished by a vendor to a vendee by a taxable service of lodging;

          D. "occupancy surtax" means the surtax imposed by Section 3-38-15.1 NMSA 1978;

          [D] E. "occupancy tax" means the tax on lodging authorized by [the Lodgers' Tax Act] Section 3-38-15 NMSA 1978;

          [E.] F. "person" means a corporation, firm, other body corporate, partnership, association or individual. "Person" includes an executor, administrator, trustee, receiver or other representative appointed according to law and acting in a representative capacity. "Person" does not include the United States of America, the state of New Mexico, any corporation, department, instrumentality or agency of the federal government or the state government or any political subdivision of the state;

          [F.] G. "rent" means the consideration received by a vendor in money, credits, property or other consideration valued in money for lodgings subject to [an occupancy] a tax authorized in the Lodgers' Tax Act;

          [G.] H. "taxable premises" means a hotel, motel or other premises used for lodging that is not the vendee's household or primary residence;

          [H.] I. "temporary lodging" means lodgings for the purpose of housing a vendee within proximity of the vendee's employment or job location;

          [I.] J. "tourist" means a person who travels for the purpose of business, pleasure or culture to a municipality or county imposing an occupancy tax;

          [J.] K. "tourist-related events" means events that are planned for, promoted to and attended by tourists;

          [K.] L. "tourist-related facilities and attractions" means facilities and attractions that are intended to be used by or visited by tourists;

          [L.] M. "tourist-related transportation systems" means transportation systems that provide transportation for tourists to and from tourist-related facilities and attractions and tourist-related events;

          [M.] N. "vendee" means a natural person to whom lodgings are furnished in the exercise of the taxable service of lodging; and

          [N.] O. "vendor" means a person or the person's agent furnishing lodgings in the exercise of the taxable service of lodging."

     SECTION 2. A new Section 3-38-15.1 NMSA 1978 is enacted to read:

     "3-38-15.1. [NEW MATERIAL] OCCUPANCY SURTAX.--

          A. In addition to the occupancy tax, a municipality or county may impose by ordinance an occupancy surtax for revenues on single-family rentals. The surtax shall not exceed two and one-half percent gross taxable rent of single-family rentals.

          B. A municipality or county imposing an occupancy surtax shall use the proceeds from the surtax to defray the cost of providing affordable housing or to leverage federal funding for affordable housing.

          C. As used in this section:

                (1) "affordable housing" means any housing that benefits those whose income is at or below eighty percent of the area median income;

                (2) "single-family rental" means a single-family residence offered for rent for a term of less than thirty days; and

                (3) "single-family residence" means an occupied residence, including an apartment, house, guest house, cottage or condominium, in which at least one room or unit is rented by a vendor through the use of advance reservations. "Single-family residence" does not include a hotel, motel, lodging house, bed and breakfast establishment or property offered as a time share, as that term is used in the New Mexico Time Share Act."

     SECTION 3. Section 3-38-16 NMSA 1978 (being Laws 1969, Chapter 199, Section 4, as amended) is amended to read:

     "3-38-16. EXEMPTIONS.--The occupancy tax and occupancy surtax shall not apply:

          A. if a vendee:

                (1) has been a permanent resident of the taxable premises for a period of at least thirty consecutive days, unless those premises are temporary lodging; or

                (2) enters into or has entered into a written agreement for lodgings at the taxable premises for a period of at least thirty consecutive days, unless those premises are temporary lodging;

          B. if the rent paid by a vendee is less than two dollars ($2.00) a day;

          C. to lodging accommodations at institutions of the federal government, the state or any political subdivision thereof;

          D. to lodging accommodations at religious, charitable, educational or philanthropic institutions, including accommodations at summer camps operated by such institutions;

          E. to clinics, hospitals or other medical facilities; or

          F. to privately owned and operated convalescent homes or homes for the aged, infirm, indigent or chronically ill."

     SECTION 4. Section 3-38-17 NMSA 1978 (being Laws 1969, Chapter 199, Section 5, as amended) is amended to read:

     "3-38-17. COLLECTION OF TAXES.--

          A. Every vendor providing lodgings in a municipality or county imposing an occupancy tax or occupancy surtax shall collect the proceeds thereof on behalf of the municipality or county and shall act as a trustee therefor.

          B. The tax and surtax shall be collected from vendees in accordance with the ordinance imposing the tax and shall be charged separately from the rent fixed by the vendor for the lodgings."

     SECTION 5. Section 3-38-17.1 NMSA 1978 (being Laws 1992, Chapter 12, Section 2, as amended) is amended to read:

     "3-38-17.1. AUDIT OF VENDORS.--The governing body of any municipality or county collecting over two hundred fifty thousand dollars ($250,000) in occupancy tax or occupancy surtax proceeds shall select for annual random audits one or more vendors to verify the amount of gross taxable rent subject to the [occupancy] tax and surtax and to ensure that the full amount of [occupancy] tax and surtax on that rent is collected. The governing body of any municipality or county collecting less than two hundred fifty thousand dollars ($250,000) in receipts, per annum, of [occupancy] tax and surtax proceeds shall conduct random audits to verify full payment of occupancy tax receipts. Copies of audits completed shall be filed annually with the local government division of the department of finance and administration."

     SECTION 6. Section 3-38-17.2 NMSA 1978 (being Laws 1996, Chapter 58, Section 5) is amended to read:

     "3-38-17.2. FINANCIAL REPORTING.--

          A. The governing body of any municipality or county imposing and collecting an occupancy tax or occupancy surtax shall furnish to the advisory board created pursuant to Section 3-38-22 NMSA 1978 that portion of any proposed budget, report or audit filed or received by the governing body pursuant to either Chapter 6, Article 6 NMSA 1978 or the Audit Act that relates to the expenditure of [occupancy] tax and surtax funds within ten days of the filing or receipt of such proposed budget, report or audit by the local governing body.

          B. The governing body of any municipality or county imposing and collecting an occupancy tax or occupancy surtax shall report to the local government division of the department of finance and administration on a quarterly basis any expenditure of [occupancy] tax and surtax funds pursuant to Sections 3-38-15, 3-38-15.1 and 3-38-21 NMSA 1978 and shall furnish a copy of this report to the advisory board when it is filed with the division."

     SECTION 7. Section 3-38-17.3 NMSA 1978 (being Laws 1996, Chapter 58, Section 6) is amended to read:

     "3-38-17.3. ENFORCEMENT.--

          A. An action to enforce the provisions of the Lodgers' Tax Act may be brought by:

                (1) the attorney general or the district attorney in the county of jurisdiction; or

                (2) a vendor who is collecting the proceeds of an occupancy tax or occupancy surtax in the county of jurisdiction.

          B. A district court may issue a writ of mandamus or order an injunction or other appropriate remedy to enforce the provisions of the Lodgers' Tax Act.

          C. The court shall award costs and reasonable [attorneys'] attorney fees to the prevailing party in a court action to enforce the provisions of the Lodgers' Tax Act."

     SECTION 8. Section 3-38-18 NMSA 1978 (being Laws 1969, Chapter 199, Section 6, as amended) is amended to read:

     "3-38-18. COLLECTION OF DELINQUENCIES.--

          A. The governing body of [the] a municipality or county shall, by ordinance, provide that a vendor is liable for the payment of the proceeds of any occupancy tax or occupancy surtax that the vendor failed to remit to the municipality or county, due to [his] the vendor's failure to collect the tax or surtax or otherwise, and shall provide for a civil penalty for any such failure in an amount equal to the greater of ten percent of the amount that was not duly remitted to the municipality or county or one hundred dollars ($100).

          B. [The] A municipality or county may bring an action in law or equity in the district court for the collection of any amounts due, including without limitation penalties thereon, interest on the unpaid principal at a rate [of] not exceeding one percent a month, the costs of collection and reasonable [attorneys'] attorney fees incurred in connection therewith."

     SECTION 9. Section 3-38-18.1 NMSA 1978 (being Laws 1992, Chapter 12, Section 1) is amended to read:

     "3-38-18.1. LIEN FOR OCCUPANCY TAX--PAYMENT--CERTIFICATE OF LIENS.--

          A. The occupancy tax and occupancy surtax imposed by a municipality or county [constitutes] constitute a lien in favor of that municipality or county upon the personal and real property of the vendor providing lodgings in that municipality or county. The lien may be enforced as provided in Sections 3-36-1 through 3-36-7 NMSA 1978. Priority of the lien shall be determined from the date of filing.

          B. Under process or order of court, no person shall sell the property of any vendor without first ascertaining from the clerk or treasurer of the municipality or county in which the vendor is located the amount of any occupancy tax or occupancy surtax due the municipality or county. Any occupancy tax or occupancy surtax due the municipality or county shall be paid from the proceeds of the sale before payment is made to the judgment creditor or any other person with a claim on the sale proceeds.

          C. The clerk or treasurer of [the] a municipality or county shall furnish to any person applying for such a certificate a certificate showing the amount of all liens in the records of the municipality or county against any vendor pursuant to Chapter 3, Article 38 NMSA 1978."

     SECTION 10. Section 3-38-19 NMSA 1978 (being Laws 1969, Chapter 199, Section 7, as amended) is amended to read:

     "3-38-19. PENALTIES.--The governing body of [the] a municipality or county shall, by ordinance, provide for penalties by creating a misdemeanor and imposing a fine of not more than five hundred dollars ($500) or imprisonment for not more than ninety days or both for a violation by any person of the provisions of the [occupancy tax] ordinance imposing an occupancy tax or occupancy surtax for