New Mexico § 7-1-6.46 - Distribution to municipalities; offset for food deduction and health care practitioner services deduction

§ 7-1-6.46. Distribution to municipalities; offset for food deduction and health care practitioner services deduction

A. For a municipality that did not have in effect on June 30, 2019 a municipal hold

harmless gross receipts tax through an ordinance and that has a population of less

than ten thousand according to the most recent federal decennial census, a distribution

pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the municipality in an amount, subject to any increase or decrease

made pursuant to Section 7-1-6.15 NMSA 1978 , equal to the applicable maximum distribution for the municipality. B. For a municipality that did not have in effect on June 30, 2019 a municipal hold

harmless gross receipts tax through an ordinance and has a population of at least

ten thousand according to the most recent federal decennial census, a distribution

pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the municipality in an amount, subject to any increase or decrease

made pursuant to Section 7-1-6.15 NMSA 1978 , equal to the following percentages of the applicable maximum distribution for the

municipality: (1) for a municipality that has a municipal poverty level two percentage points or

more above the state poverty level, eighty percent; (2) for a municipality that has a poverty level of less than two percentage points

above or below the state poverty level, fifty percent; and (3) for a municipality that has a poverty level two percentage points or more below

the state poverty level: (a) on or after July 1, 2022 and prior to July 1, 2023, forty-nine percent; (b) on or after July 1, 2023 and prior to July 1, 2024, forty-two percent; (c) on or after July 1, 2024 and prior to July 1, 2025, thirty-five percent; and (d) on or after July 1, 2025, thirty percent. C. For a municipality not described in Subsection A or B of this section, a distribution

pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the municipality in an amount, subject to any increase or decrease

made pursuant to Section 7-1-6.15 NMSA 1978 , equal to the applicable maximum distribution for the municipality multiplied by

the following percentages: (1) on or after July 1, 2022 and prior to July 1, 2023, forty-nine percent; (2) on or after July 1, 2023 and prior to July 1, 2024, forty-two percent; (3) on or after July 1, 2024 and prior to July 1, 2025, thirty-five percent; (4) on or after July 1, 2025 and prior to July 1, 2026, twenty-eight percent; (5) on or after July 1, 2026 and prior to July 1, 2027, twenty-one percent; (6) on or after July 1, 2027 and prior to July 1, 2028, fourteen percent; (7) on or after July 1, 2028 and prior to July 1, 2029, seven percent; and (8) on and after July 1, 2029, zero percent. D. A distribution pursuant to this section is in lieu of revenue that would have been

received by the municipality but for the deductions provided by Sections 7-9-92 and 7-9-93 NMSA 1978 . The distribution shall be considered gross receipts tax revenue and shall be used

by the municipality in the same manner as gross receipts tax revenue, including payment

of gross receipts tax revenue bonds. E. If the changes made by this 2022 act to the distributions made pursuant to this

section impair the ability of a municipality to meet its principal or interest payment

obligations for revenue bonds that are outstanding prior to July 1, 2022 and that

are secured by the pledge of all or part of the municipality's revenue from the distribution

made pursuant to this section, then the amount distributed pursuant to this section

to that municipality shall be increased by an amount sufficient to meet the required

payment; provided that the total amount distributed to that municipality pursuant

to this section does not exceed the amount that would have been due that municipality

pursuant to this section as it was in effect on June 30, 2022. F. For the purposes of this section: (1) “ business locations attributable to the municipality ” means business locations: (a) within the municipality; (b) on land owned by the state, commonly known as the “state fairgrounds”, within

the exterior boundaries of the municipality; (c) outside the boundaries of the municipality on land owned by the municipality;

and (d) on an Indian reservation or pueblo grant in an area that is contiguous to the

municipality and in which the municipality performs services pursuant to a contract

between the municipality and the Indian tribe or Indian pueblo if: 1) the contract

describes an area in which the municipality is required to perform services and requires

the municipality to perform services that are substantially the same as the services

the municipality performs for itself; and 2) the governing body of the municipality

has submitted a copy of the contract to the secretary; (2) “ maximum distribution ” means: (a) for a municipality that did not have in effect on June 30, 2019 a municipal hold

harmless gross receipts tax, the total deductions claimed pursuant to Sections 7-9-92 and 7-9-93 NMSA 1978 for the month by taxpayers from business locations attributable to the municipality

multiplied by the sum of the combined rate of all municipal local option gross receipts

taxes in effect in the municipality for the month plus one and two hundred twenty-five

thousandths percent; and (b) for a municipality not described in Subparagraph (a) of this paragraph, the total

deductions claimed pursuant to Sections 7-9-92 and 7-9-93 NMSA 1978 for the month by taxpayers from business locations attributable to the municipality

multiplied by the sum of the combined rate of all municipal local option gross receipts

taxes in effect in the municipality on January 1, 2007 plus one and two hundred twenty-five

thousandths percent; and (3) “ poverty level ” means the percentage of persons in poverty, according to the most recent five-year

American community survey, as published by the United States census bureau. For the purposes of determining the poverty level of a municipality, “ poverty level ” means the percentage of persons in poverty in a municipality, according to the most

recent five-year American community survey, as published by the United States census

bureau, that includes adequate data to make a determination as to the poverty level

of the municipality. G. A distribution pursuant to this section may be adjusted for a distribution made

to a tax increment development district with respect to a portion of a gross receipts

tax increment dedicated by a municipality pursuant to the Tax Increment for Development

Act.