SENATE BILL 386

55th legislature - STATE OF NEW MEXICO - first session, 2021

INTRODUCED BY

Ron Griggs

 

 

 

 

 

AN ACT

RELATING TO TAXATION; ENACTING THE RECORDATION TAX ACT; ENACTING THE FOOD GROSS RECEIPTS TAX ACT; DISTRIBUTING A PORTION OF THE REVENUE FROM THE FOOD GROSS RECEIPTS TAX TO MUNICIPALITIES AND COUNTIES; PROVIDING AN EXEMPTION FOR SOCIAL SECURITY INCOME FROM INCOME TAX; PROVIDING AN EXEMPTION FOR MILITARY RETIREMENT INCOME FROM INCOME TAX; REPEALING THE HOLD HARMLESS DISTRIBUTIONS TO MUNICIPALITIES AND COUNTIES THAT OFFSET THE FOOD AND HEALTH CARE PRACTITIONER DEDUCTIONS FROM GROSS RECEIPTS.

 

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

         SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 6 of this act may be cited as the "Recordation Tax Act".

         SECTION 2. [NEW MATERIAL] RECORDATION TAX--TRANSFERS OF REAL PROPERTY.--

                   A. An excise tax is imposed on all instruments evidencing a transfer of any interest in real property. The rate of tax shall be twenty-five cents ($.25) on each one hundred dollars ($100) or fractional part thereof on the value of each instrument transferring the interest, which value shall be based on the prior year's assessed value of the real property being transferred.

                   B. In the event the prior year's assessed value of the real property being transferred is based on undeveloped land that has since been subdivided or otherwise developed, the county shall, upon request, assess the value of the real property since being developed and provide a statement of the value to the taxpayer.

                   C. A person who obtains more than one deed or other instrument of conveyance for the same transfer of the same tract or parcel of real property shall pay the tax imposed by this section only once with respect to that transfer.

                   D. The tax imposed by this section shall be paid by the grantee or transferee of the interest in the real property to the county clerk of the county in which the real property is located. If the instrument transfers a parcel of real property lying in two or more counties, the tax shall be paid to the county clerk of the county in which the greater part of the real property with respect to value lies. The county clerk shall not record the transfer until the tax has been paid.

                   E. The tax imposed by this section shall not be imposed on the transfer of:

                               (1) a leasehold estate; or

                               (2) real property where such transfer is:

                                         (a) the creation or dissolution of a tenancy by the entirety the conveyance from: 1) one spouse to another; 2) one spouse or both spouses to the original grantor in the instrument or the original grantor's spouse; or 3) one spouse or both spouses to a trustee and immediate reconveyance by the trustee in the same instrument as tenants in common, tenants in common with right of survivorship, joint tenants or joint tenants with right of survivorship;

                                         (b) a deed of division in kind of real property formerly held by tenants in common;

                                         (c) release of a life estate to the beneficiaries of the remainder interest;

                                         (d) a deed executed by an executor to implement a testamentary devise;

                                         (e) a decree or deed that is an adjustment of property rights between divorcing parties;

                                         (f) a transfer by a transferor of real property to a revocable living trust created by the same transferor or by a spouse of the transferor, or a transfer by the trustee of a revocable living trust back to the same transferor or to the transferor's spouse; or

                                         (g) a deed executed by the trustee of a revocable living trust to implement a testamentary devise by the trustor of the trust.

         SECTION 3. [NEW MATERIAL] RECORDATION TAX--INSTRUMENT OF INDEBTEDNESS ON REAL PROPERTY.--

                   A. An excise tax is imposed on all instruments of indebtedness for real property, including a mortgage, deed of trust or other security device of greater than twenty-five thousand dollars ($25,000). The rate of tax shall be ten cents ($.10) on each one hundred dollars ($100), or fractional part thereof, of the indebtedness above twenty-five thousand dollars ($25,000).

                   B. The tax imposed by this section shall be paid by the mortgagor, grantor or debtor, as evidenced by the instrument offered for recording. The tax shall be paid to the county clerk of the county in which the real property is located. If the instrument is for a parcel of real property lying in two or more counties, the tax shall be paid to the county clerk of the county in which the greater part of the real property with respect to value lies. If some of the real property lies outside this state, the tax may be paid on the value of real property in this state. The county clerk shall not record the instrument until the tax has been paid.

                   C. If the consideration or stipulation of indebtedness does not appear on the face of the instrument being offered for recording, the county clerk shall require a separate statement made in recordable form indicating the amount of the indebtedness so secured.

                   D. When the instrument being offered for recording secures, or evidences the securing of, a line of credit or other indebtedness arising from more than one advance or extension of credit, the amount of which may vary from time to time, the tax shall be computed and paid on the maximum amount of the indebtedness as stated in the instrument or the accompanying sworn statement, and the reduction or subsequent increasing of the amount of the indebtedness within such limits shall not result in additional tax.

                   E. As used in this section, "indebtedness" means the principal debt or obligation that is reasonably contemplated by the parties to be included within the terms of the agreement. "Indebtedness" does not include any amount of interest, collection expense, including attorney fees and expenses incurred in preserving, protecting, improving or insuring property that serves as collateral for the indebtedness, or any other amount, other than the principal debt or obligation, for which a debtor becomes liable unless such amount is added to the principal debt or obligation, and is used to calculate additional interest pursuant to refinancing, reamortization, amendment or similar transaction or occurrence.

         SECTION 4. [NEW MATERIAL] REPORT TO TAXATION AND REVENUE DEPARTMENT--ADMINISTRATION FEE.--The county clerk shall report all collections of taxes made pursuant to this section on forms prescribed by the taxation and revenue department and shall submit the proceeds of the taxes collected to the taxation and revenue department at the end of each month. A county may withhold an administrative fee of three percent of the net amount of the tax proceeds collected.

         SECTION 5. [NEW MATERIAL] EXEMPTIONS.--

                   A. Instruments made pursuant to mergers, consolidations, sales or transfers of substantially all of the assets in this state of corporations, pursuant to plans of reorganization, are exempt from the taxes imposed by the Recordation Tax Act.

                   B. The recording and rerecording of all transfers of real property in which the state or any of its instrumentalities is the grantee or transferee and all instruments evidencing an indebtedness in which the state or any of its instrumentalities is the holder or owner of the indebtedness shall be exempt from the taxes imposed by the Recordation Tax Act.

                   C. Instruments for which a tax imposed pursuant to Section 2 of the Recordation Tax Act is paid shall be exempt from the tax imposed pursuant to Section 3 of that act.

                   D. Instruments for which a tax imposed pursuant to Section 3 of the Recordation Tax Act is paid shall be exempt from the tax imposed pursuant to Section 2 of that act.

         SECTION 6. [NEW MATERIAL] LIMITATION ON AMOUNT OF TAX.--A tax imposed pursuant to the Recordation Tax Act shall not exceed one hundred thousand dollars ($100,000) with respect to instruments evidencing the same transfer of an interest in real property or each instrument of indebtedness for real property.

         SECTION 7. [NEW MATERIAL] SHORT TITLE.--Sections 7 through 11 of this act may be cited as the "Food Gross Receipts Tax Act".

         SECTION 8. [NEW MATERIAL] DEFINITIONS.--As used in the Food Gross Receipts Tax Act:

                   A. "engaging in business" means carrying on or causing to be carried on the selling of food at a retail food store with the purpose of direct or indirect benefit;

                   B. "food" means any food or food product for home consumption that meets the definition of food in 7 U.S.C. 2012(k)(1) for purposes of the federal supplemental nutrition assistance program;

                   C. "food gross receipts" means the total amount of money or the value of other consideration received from selling food at a retail food store in New Mexico, or, if in an exchange in which the money or other consideration received does not represent the value of the food, "food gross receipts" means the reasonable value of the food. "Food gross receipts" excludes:

                               (1) cash discounts allowed and taken;

                               (2) food gross receipts tax payable on transactions for the reporting period;

                               (3) gross receipts tax payable pursuant to the Gross Receipts and Compensating Tax Act on transactions for the reporting period;

                               (4) taxes imposed pursuant to the provisions of any local option gross receipts tax, as that term is defined in the Tax Administration Act, that is payable for the reporting period;

                               (5) a time-price differential; and

                               (6) any gross receipts or sales taxes imposed by an Indian nation, tribe or pueblo; provided that the tax is approved, if approval is required by federal law or regulation, by the United States secretary of the interior; and provided further that the gross receipts or sales tax imposed by the Indian nation, tribe or pueblo provides a reciprocal exclusion from gross receipts, sales or gross receipts-based excise taxes imposed by the state or its political subdivisions; and

                   D. "retail food store" means an establishment that sells food for home preparation and consumption and that meets the definition of retail food store in 7 U.S.C. 2012(p)(1) for purposes of the federal supplemental nutrition assistance program, whether or not the establishment participates in the federal supplemental nutrition assistance program.

         SECTION 9. [NEW MATERIAL] FOOD GROSS RECEIPTS TAX.--For the privilege of engaging in business, an excise tax of four percent of gross receipts on the sale of food at a retail food store is imposed on any person engaging in business in New Mexico. The tax imposed by this section may be cited as the "food gross receipts tax".

         SECTION 10. [NEW MATERIAL] EXEMPTIONS.--Exempted from the food gross receipts tax are receipts that are exempt from the gross receipts tax pursuant to the Gross Receipts and Compensating Tax Act pursuant to Sections 7-9-13, 7-9-13.1, 7-9-18.1, 7-9-28, 7-9-29 and 7-9-41.3 NMSA 1978.

         SECTION 11. [NEW MATERIAL] DATE PAYMENT DUE.--The tax imposed by the Food Gross Receipts Tax is to be paid on or before the twenty-fifth day of the month following the month in which the taxable event occurs.

         SECTION 12. Section 7-1-2 NMSA 1978 (being Laws 1965, Chapter 248, Section 2, as amended by Laws 2019, Chapter 47, Section 1 and by Laws 2019, Chapter 53, Section 10 and also by Laws 2019, Chapter 270, Section 1) is amended to read:

         "7-1-2. APPLICABILITY.--The Tax Administration Act applies to and governs:

                   A. the administration and enforcement of the following taxes or tax acts as they now exist or may hereafter be amended:

                               (1) Income Tax Act;

                               (2) Withholding Tax Act;

                               (3) Oil and Gas Proceeds and Pass-Through Entity Withholding Tax Act;

                               (4) Gross Receipts and Compensating Tax Act, Interstate Telecommunications Gross Receipts Tax Act and Leased Vehicle Gross Receipts Tax Act;

                               (5) Liquor Excise Tax Act;

                               (6) Local Liquor Excise Tax Act;

                               (7) any municipal local option gross receipts tax or municipal compensating tax;

                               (8) any county local option gross receipts tax or county compensating tax;

                               (9) Special Fuels Su