Legislation Detail
S 147 TAX CHANGES
Actions: [2] STBTC/SFC-STBTC [8] DNP-CS/DP-SFC [10] DNP-CS/DP/a - PASSED/S (35-0) [13] HTRC-HTRC [15] DP [17] PASSED/H (60-0)
Scheduled: Not Scheduled
Senate Bill 147 (SB 147) makes several tax code changes: Cannabis tax to destination-based sourcing Allowing tribal taxes to differ from surrounding local government tax rates Clarify definitions for disclosed agency and gross receipts Changes in reporting to Taxation and Revenue Exempt services and digital purchases by government agencies from taxation Exempt certain health care providers from Gross Receipts Tax Clarify Trip Tax and Premium Tax amounts SB 147 makes conforming changes to statutes and declares an emergency.Legislation Overview:
Senate Bill 147 (SB 147) makes several tax code changes. The most notable changes: • Cannabis tax to destination-based sourcing This change aligns Cannabis Excise Tax with Gross Receipts Tax (GRT) and resolves the issue of cannabis retailers reporting delivered cannabis sales to the retail location and GRT to the buyer’s location. • Tribes and GRT rates Tribes that have a revenue sharing agreement with Taxation and Revenue Department (TRD) to set their own GRT rate regardless of GRT rate in adjacent counties. They will not be prohibited from setting rates higher than surrounding counties. • Clarify definitions for disclosed agency and gross receipts Disclosed agency is clarified so receipts that pass through an agent are not taxed multiple times known as tax pyramiding. • GRT definition The definition for GRT will exclude all excise taxes imposed by the state and local governments. This will eliminate GRT and double taxation on cannabis and cigarette excise taxes. • GRT and Compensating (CT) exemptions and deductions Services used by government are exempted from CT. Only property is currently exempt. Payments received by health care providers except for-profit hospitals from the federal American Rescue Plan Act of 2021 are exempted from GRT Electronic (or digital) goods licensed by government are treated the same as tangible goods for GRT deductions. E-books licensed through public libraries will not be subject to GRT. • Clarify Trip Tax and Premium Tax Trip Tax amount is clarified to be an amount up to the total due of registration fees and Weight Distance Tax. This is not an increase. Self-insured insurance providers will be subject to Premium Tax. Credits that exceed a member’s Premium Tax liability will not be refunded nor carried forward. • Miscellaneous An annual return filed for Insurance Premium Tax with a balance due to the taxpayer after an amended return will be considered a filing of a claim for a refund. Compliance checks are standardized for liquor, cannabis, and cigarette sellers. Liquor, cannabis, and cigarette license-checks are standardized and will not be issued or renewed if delinquent in relevant excise tax or GRT. • Tax Expenditure Budget TRD must compile and post on their website a tax expenditure budget annually for the governor, Revenue Stabilization and Tax Policy Committee and Legislative Finance Committee. The budget estimates revenue losses from exemptions, deductions, credits, and other preferential tax rates. The report will contain descriptive data and an evaluation of the tax expenditure. • TRD Reporting Allows TRD to share data to the public and thus other state agencies such as the Department of Transportation on special fuels tax as it does gas tax. The reporting of GRT deductions is separated from GRT which allows for better reporting and evaluation of deductions. • Repeals Business Facility Rehabilitation Credit Welfare-to-Work Credit Electronic ID Reader Credit Blended Biodiesel Fuel Credit Advanced Energy Credit Physician Participating in Cancer Treatment Clinical Trials Credit Veteran Employment Credit Venture Capitalist Investment Credit Nonprofit Elderly Care Facility Exemption Vehicles Titled Before July 1, 1991 Exemption from Leased Vehicle GRT Hybrid Vehicle Exemption from Motor Vehicle Excise Tax Sales to Qualified Film Production Company deductions SB 147 makes some minor technical language and conforming changes in the statutes. The bill declares an emergency and takes effect immediately upon its passage and approval by the governor, provided it is passed by two-thirds vote of each house. If not passed by the required vote the effective date is June 16.Amendments:
02/28/2023 Senate Finance Committee amends SB 147 STBTCcs SFCcs (SB 147 STBTCcs SFCcs SFCa) SFCa narrows the definition of Gross Receipts Tax (GRT) by excluding NM GRT, Governmental GRT, Leased Vehicle GRT, and Cannabis Excise Tax when computing gross receipts subject to taxation instead of excluding all excise taxes.Committee Substitute:
02/28/2023 Senate Finance Committee substitute for SB 147 STBTCcs (SB 147 STBTCcs SFCcs) There were two changes made by SFCcs: the definition of base income is modified with reference to income tax and pass-through entities; and clarifies the imposition of trip tax is on trips made in the state by foreign-based commercial motor vehicle carrier in lieu of registration fees and the Weight Distance Tax. Notable provisions of SB 147 STBTCcs SFCcs: • Cannabis tax to destination-based sourcing This change aligns Cannabis Excise Tax with Gross Receipts Tax (GRT) and resolves the issue of cannabis retailers reporting delivered cannabis sales to the retail location and GRT to the buyer’s location. • Tribes and GRT rates Tribes that have a revenue sharing agreement with Taxation and Revenue Department (TRD) to set their own GRT rate regardless of GRT rate in adjacent counties. They will not be prohibited from setting rates higher than surrounding counties. • Clarify definitions for disclosed agency and gross receipts Disclosed agency is clarified so receipts that pass through an agent are not taxed multiple times known as tax pyramiding. • GRT definition The definition for GRT will exclude all excise taxes imposed by the state and local governments. This will eliminate GRT and double taxation on cannabis and cigarette excise taxes. • GRT and Compensating (CT) exemptions and deductions Services used by government are exempted from CT. Only property is currently exempt. Payments received by health care providers except for-profit hospitals from the federal American Rescue Plan Act of 2021 are exempted from GRT. Electronic (or digital) goods licensed by government are treated the same as tangible goods for GRT deductions. E-books licensed through public libraries will not be subject to GRT. • Premium Tax Imposition Self-insured insurance providers will be subject to Premium Tax. Credits that exceed a member’s Premium Tax liability will not be refunded nor carried forward. • Certified Public Accountants (CPA) CPAs have until 18 months from the date the passing score is released to them. Current law provides for 18 months from the applicant taking the failed section’s exam. • Miscellaneous An annual return filed for Insurance Premium Tax with a balance due to the taxpayer after an amended return will be considered a filing of a claim for a refund. Compliance checks are standardized for liquor, cannabis, and cigarette sellers. Liquor, cannabis, and cigarette license-checks are standardized and will not be issued or renewed if delinquent in liquor excise tax or GRT. • Tax Expenditure Budget TRD must compile and post on their website a tax expenditure budget annually for the governor, Revenue Stabilization and Tax Policy Committee and Legislative Finance Committee. The budget estimates revenue losses from exemptions, deductions, credits, and other preferential tax rates. The report will contain descriptive data and an evaluation of the tax expenditure. • TRD Reporting Allows TRD to share data to the public and thus other state agencies such as the Department of Transportation on special fuels tax as it does gas tax. The reporting of GRT deductions is separated from GRT which allows for better reporting and evaluation of deductions. • Repeals Business Facility Rehabilitation Credit Welfare-to-Work Credit Electronic ID Reader Credit Blended Biodiesel Fuel Credit Advanced Energy Credit Physician Participating in Cancer Treatment Clinical Trials Credit Veteran Employment Credit Venture Capitalist Investment Credit Nonprofit Elderly Care Facility Exemption Vehicles Titled Before July 1, 1991 Exemption from Leased Vehicle GRT Hybrid Vehicle Exemption from Motor Vehicle Excise Tax Sales to Qualified Film Production Company deductions SB 147 STBTCcs SFCcs makes some minor technical language and conforming changes in the statutes. The bill declares an emergency and takes effect immediately upon its passage and approval by the governor, provided it is passed by two-thirds vote of each house. If not passed by the required vote the effective date is June 16. 02/20/2022 Senate Tax, Business, and Transportation Committee substitute for Senate Bill 147 (SB 147 STCTCcs) The most notable provisions of SB 147 STBTCcs: • Cannabis tax to destination-based sourcing This change aligns Cannabis Excise Tax with Gross Receipts Tax (GRT) and resolves the issue of cannabis retailers reporting delivered cannabis sales to the retail location and GRT to the buyer’s location. • Tribes and GRT rates Tribes that have a revenue sharing agreement with Taxation and Revenue Department (TRD) to set their own GRT rate regardless of GRT rate in adjacent counties. They will not be prohibited from setting rates higher than surrounding counties. • Clarify definitions for disclosed agency and gross receipts Disclosed agency is clarified so receipts that pass through an agent are not taxed multiple times known as tax pyramiding. • GRT definition The definition for GRT will exclude all excise taxes imposed by the state and local governments. This will eliminate GRT and double taxation on cannabis and cigarette excise taxes. • GRT and Compensating (CT) exemptions and deductions Services used by government are exempted from CT. Only property is currently exempt. Payments received by health care providers except for-profit hospitals from the federal American Rescue Plan Act of 2021 are exempted from GRT. Electronic (or digital) goods licensed by government are treated the same as tangible goods for GRT deductions. E-books licensed through public libraries will not be subject to GRT. • Clarify Trip Tax and Premium Tax Trip Tax amount is clarified to be an amount up to the total due of registration fees and Weight Distance Tax. This is not an increase. Self-insured insurance providers will be subject to Premium Tax. Credits that exceed a member’s Premium Tax liability will not be refunded nor carried forward. • Certified Public Accountants (CPA) CPAs have until 18 months from the date the passing score is released to them. Current law provides for 18 months from the applicant taking the failed section’s exam. • Miscellaneous An annual return filed for Insurance Premium Tax with a balance due to the taxpayer after an amended return will be considered a filing of a claim for a refund. Compliance checks are standardized for liquor, cannabis, and cigarette sellers. Liquor, cannabis, and cigarette license-checks are standardized and will not be issued or renewed if delinquent in liquor excise tax or GRT. • Tax Expenditure Budget TRD must compile and post on their website a tax expenditure budget annually for the governor, Revenue Stabilization and Tax Policy Committee and Legislative Finance Committee. The budget estimates revenue losses from exemptions, deductions, credits, and other preferential tax rates. The report will contain descriptive data and an evaluation of the tax expenditure. • TRD Reporting Allows TRD to share data to the public and thus other state agencies such as the Department of Transportation on special fuels tax as it does gas tax. The reporting of GRT deductions is separated from GRT which allows for better reporting and evaluation of deductions. • Repeals Business Facility Rehabilitation Credit Welfare-to-Work Credit Electronic ID Reader Credit Blended Biodiesel Fuel Credit Advanced Energy Credit Physician Participating in Cancer Treatment Clinical Trials Credit Veteran Employment Credit Venture Capitalist Investment Credit Nonprofit Elderly Care Facility Exemption Vehicles Titled Before July 1, 1991 Exemption from Leased Vehicle GRT Hybrid Vehicle Exemption from Motor Vehicle Excise Tax Sales to Qualified Film Production Company deductions SB 147 STCTCcs makes some minor technical language and conforming changes in the statutes. The bill declares an emergency and takes effect immediately upon its passage and approval by the governor, provided it is passed by two-thirds vote of each house. If not passed by the required vote the effective date is June 16.Relates To:
SB 147 is related to SB 38 and HB 120.