Legislative Update: 2021 Post-Session Update

03/23/2021

The 60-day New Mexico legislative session, which convened January 19, 2021, closed at noon on March 20. Only some of the bills that passed both chambers will be signed by the Governor and be enacted into law. Legislation not acted on by the Governor will be pocket vetoed on April 9. The effective date of legislation that is not a general appropriations bill, a bill with an emergency clause, or any other specified effective date will take effect on June 18, 2021. We will periodically update which bills have been signed by the Governor until the day after the signing deadline. Governor Grisham has announced she will call the New Mexico Legislature into a special session on March 30, 2021 to take up a pair of economic and job creation items that were left unfinished in the 60-day session: legalizing adult-use cannabis and expanding the Local Economic Development Act (“LEDA”).

In this issue, we have also included recent important tax guidance from the Internal Revenue Service and New Mexico Taxation and Revenue Department.

SECTIONS

Business and Corporate

Cannabis

Economic Development

Employment and Labor

Healthcare

Taxation

Utilities

Other/Miscellaneous

CONTRIBUTING LAWYERS*

Noe Astorga-Corral

Anne P. Browne

Suzanne W. Bruckner

Tina Muscarella Gooch

Alison K. Goodwin

Jesse D. Hale

Wade L. Jackson

Robert J. Johnston

Isaac A. Leon

Deborah E. Mann

Lynn E. Mostoller

*Amanda E. Cvinar, a law clerk with Sutin, Thayer & Browne, is also a contributing author.

BUSINESS and CORPORATE

PASSED

Uniform Code Secure Transaction Language - HB66 – Governor signed on 4-6-21

HB66 amends the NM Uniform Commercial Code (“UCC”) to make conforming amendments to statutes that relate to secured transactions. The bill adds the definitions of “good faith” and “public-finance transaction.” Also, public finance transactions are added to the list of transactions exempted from the scope of the UCC. The bill passed both chambers unanimously and was signed by the Governor on April 6, 2021.

Small Business Recovery Act - SB3 – Governor signed on 3-3-21

SB3 changes the name of the Small Business Recovery Act of 2020 to the Small Business Recovery Act (“SBRA”). The SBRA was passed in 2020 to make low interest loans available to small businesses impacted by the Covid-19 health crisis. SB 3 extends the deadline to apply for a Small Business Recovery Loan from December 31, 2020 to May 31, 2022. SB3 also increases available funding to $500 million. SB3 changes the terms of Small Business Recovery Loans to allow terms up to 10 years, and allows recipients to refinance the loan. The bill loosens underwriting standards by not requiring borrowers to have records demonstrating actual losses, nor are borrowers required to certify that the business does not expect to declare bankruptcy. Lastly, the bill expands the businesses eligible for the program by defining eligible borrowers as those having less than $5 million in net income in 2019, rather than those with less than $5 million in gross income. SB3 became effective on March 3, 2021.

Local Government Air Quality Regulations - SB8 – Govenor signed on 4-8-21

SB8 amends the Air Quality Control Act and the Hazardous Waste Act to give local governments the ability to set minimum environmental standards that are more stringent than existing federal standards. If an environmental improvement or local board determines that emissions within its jurisdiction cause ozone concentrations in excess of 95% of the primary national ambient air quality standard, the board can adopt a plan and rules to control the emissions. The rules are applicable to sources of emissions only where ozone concentrations exceed 95% of the national standard. SB 8 permits the adoption of rules to manage hazardous waste and storage tanks that are more stringent than the federal Environmental Protection Agency requirements. The bill’s effective date is July 1, 2021. SB8 was signed by the Governor on April 8, 2021.

Alternate Business Entity Names - SB202 – Governor signed on 4-6-21

SB202 amends New Mexico law to require the articles of incorporation, articles of amendment and articles organization to include  all names of a nonprofit corporation, business corporation, foreign corporation and limited liability company that transacts business in New Mexico.  The bill has an effective date of July 1, 2021.  The bill unanimously passed both chambers and was signed by the Governor on April 6, 2021.

DID NOT PASS

Private Right of Action for Certain Statutes - HB50 – Died in committee

HB50 would have created a private right of action for persons who are injured in fact (economically or otherwise) or are threatened with imminent injury to sue alleged violators under the Oil and Gas Act, the Air Quality Control Act, the Hazardous Waste Act, the Solid Waste Act, and the Water Quality Act. Actions would require 60 days’ notice to the responsible agency and the Attorney General before an action could be commenced. If a regulatory agency with oversight is already prosecuting a civil action against the alleged violator, the claimant would be permitted to intervene in the ongoing action as a matter of right. The bill allows the court to assess civil penalties or order injunctive relief, or both, and allows a court to award reasonable attorney’s fees. HB50 passed the House Energy and Natural Resources Committee and went to the House Judiciary Committee, but did not pass either chamber.

Public Health Order Termination and Renewal - SB74 – Did not pass

SB74 would have enacted statutory sections within the Emergency Powers Code (“EPC”), the Public Health Emergency Response Act (“PHERA”), and the Public Health Act (“PHA”) to provide for automatic termination of a public health order issued pursuant to the EPC 14 days after the order’s issuance. SB 74 passed two senate committees and was referred to the Senate, but was not passed in either chamber.

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CANNABIS

DID NOT PASS

There were a variety of Cannabis bills introduced during the 2021 legislative session, none of which passed. These included:

The Cannabis Regulation Act - HB12 / SB363 – Governor called special session to finalize debate in both chambers

HB12 passed in the House and moved to the Senate floor for a vote. The Senate Judiciary Committee had voted 5-4 recommending that HB12 Do Pass but with additional amendments. HB12 then went to Senate floor for a vote but no vote was taken before the 2021 legislative session adjourned. Besides a full Senate vote, the Senate Judiciary Committee’s amendments also needed to be approved by the House.

Governor Michelle Lujan Grisham, however, has called the legislature to a special legislative session so that any remaining issues and debates concerning HB12 may be resolved by the House and Senate. Governor Grisham strongly supports legalizing recreational marijuana and believes it will be “one of the largest job-creation programs in state history.” The special session is currently scheduled for March 30.

 If you wish to read more detail about any of these bills, please see our 2021 Mid-Session Update.

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ECONOMIC DEVELOPMENT

PASSED

Gross Receipts Tax and Permanent Fund for LEDA Projects - HB11 – Governor signed on 2-26-2021

HB11 is a COVID relief measure that provides a one-time, $200 million appropriation from the general fund to the renamed Local Economic Development Recovery Act Fund for grants to certain businesses, to be administered by the Economic Development Department (“EDD”) and the New Mexico Finance Authority (“NMFA”). Funding to applicant businesses will be prioritized by the greatest percentage reduction in revenues, measured on a quarterly basis. The maximum allowable grant to a business is $100,000, paid in quarterly installments. The bill includes employment, revenue, and reporting requirements and limits uses of awarded grants to reimbursement of rent, lease or mortgage obligations. It also requires NMFA to reserve recovery grant funding for a business that is awarded funds but subsequently loses eligibility, in the event that business becomes eligible again in a succeeding quarter. The Governor signed the bill into law on February 26, 2021.

Workforce Training Residency Requirements - HB155 – Governor signed on 4-6-21

HB155 makes permanent the reduced residency requirement under the Job Training Incentive Program (“JTIP”) when the training is provided for high-wage jobs. The bill passed unanimously in both chambers and was signed by the Governor on April 6, 2021.

DID NOT PASS

Electric Generation Project Requirements - SB72 – Passed Senate unanimously; House did not vote on the measure

SB72 proposed a major change to last year’s HB50, which allowed IRB treatment for electric transmission and generating facilities and provided for in-lieu of property tax sharing for the state and various school districts. This bill would have changed the municipal and county IRB statutes to establish a formula to share negotiated in-lieu of property tax payments between the IRB sponsoring jurisdiction (generally county governments) and the school districts within that sponsoring jurisdiction. It further proposed that all school districts located within the county or municipal jurisdictions would split the formula amount equally. SB72 passed unanimously in the Senate and was recommended to pass by the House Energy, Environment and Natural Resources Committee, but was not voted on by the House before the session adjourned.

Economic Development Incentive Reports - SB98 – Did not pass

SB98 would have required entities receiving economic development tax credits, rebates, exemptions, deductions or IRB approvals to provide specific reports to the Economic Development Department regarding employment, salaries, and capital investments made in the previous calendar year. For any economic development tax expenditures costing more than $10 million dollars per fiscal year, New Mexico Taxation and Revenue would have been required to complete an objective assessment and economic analysis every three years. SB98 passed in the Senate and was recommended to pass by the House Commerce and Economic Development Committee, but was not voted on by the House before the session adjourned.

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EMPLOYMENT and LABOR

PASSED

Healthy Workplaces Act - HB20 – Governor signed on 4-7-21

HB20 was part of a suite of bills that included HB37, HB38, and HB134, designed to create, expand, and/or support paid sick leave and FMLA workplace policies. The Act will apply to private employers employing one or more employees at any time and includes employees on full-time, part-time, seasonal, or temporary basis. It does not apply to government employers. HB20 creates a right to paid sick leave for New Mexico workers, specifically, one hour of paid sick leave for every 30 hours worked, or 64 hours of earned sick leave per twelve-month period. The bill includes liability for employers if they do not comply: for example, if an employee takes sick leave but is unlawfully not compensated, then the employer must pay the greater of three times the wages that should have been paid or $500. The effective date of HB20 was amended to be July 1, 2022. The Governor signed HB20 into law on April 7, 2021.  

Removing the Exception to the Minimum Wage Requirement for Secondary School Students - SB35 – Signed by Governor on 3-18-21

SB35 amended the definition of “employee” in the Minimum Wage Act. During the session, SB35 was amended to broaden the bill, eliminating the separate lower minimum wage from secondary students to all individuals 18 years old or under. SB35 strikes from the exclusions of the definition of “employee” persons 18 years of age or under who are not students in a primary, secondary, vocational or training school. SB35 was signed by the Governor on March 18, 2021.

Extended Unemployment Benefits - SB52 – Signed by Governor 3-17-21

SB52 deleted prior statutory language that prohibited the state from triggering seven additional weeks of extended benefits during periods of high unemployment. This bill was initiated by the Workforce Solutions Department to bring New Mexico law into conformity with the U.S. Department of Labor rules and regulations. SB52 was signed by the Governor on March 17, 2021.

DID NOT PASS

Phased Minimum Wage Increase - HB110 – Did not pass

HB110 would have amended the state’s Minimum Wage Act to expand coverage for all but a few enumerated types of employees. Primarily, HB110 would require both high school students and tipped employees to be paid the established minimum wage. It also sought to repeal an unused statutory provision that authorizes the employment of certain individuals with physical or mental disabilities at subminimum wage rates. HB110 did not progress beyond the House Commerce & Economic Development Committee.

College Faculty Minimum Wage - HB289 – Did not pass

HB289 included new requirements for colleges and universities. Specifically, all public post-secondary educational institutions in the state would be required to pay all non-tenure-track faculty members a minimum wage of $5,000 per course assignment credit hour. HB289 did not make it out of committee.

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HEALTHCARE

  PASSED

Elizabeth Whitefield End-of-Life Options - HB47 (related to SB308) – Governor signed 4-8-21

HB47, renamed in amendments to End-of-Life Options Act, will provide terminally ill but still mentally competent adults the option of having medical assistance in bringing about their own deaths. Currently it is illegal for a medical practitioner to provide a prescription that a patient might take to end his/her life; this bill would sanction that practice, with multiple safeguards. SB308, which was similar in nature to HB47, died in committee. HB47 was signed by the Governor on April 8, 2021.

Primary Care Council Act - HB67 – Governor signed 4-6-21

HB67 would establish an unpaid primary care council to advise state government, especially the Department of Human Services, in finding means to increase New Mexicans’ access to healthcare while improving their health and controlling the costs of healthcare. Specifically, using its study of other models and of local data, the primary care council would be charged with developing a five-year plan to address access to care, quality of care, and cost of care through means of increasing primary care provider availability in New Mexico. HB67 was signed by the Governor on April 6, 2021.

Medical Malpractice Definitions - HB75 – Governor signed 4-1-21

HB75 would remove hospitals from the definition of health care provider in the New Mexico Medical Malpractice Act, effective December 31, 2021. The Medical Malpractice Act provides protections to patients and qualified health care providers in medical malpractice lawsuits through, among other things, caps on the amount of damages, other than medical and medically related expenses, that a patient may recover. For patients who have settled or prevailed in a lawsuit, the Medical Malpractice Act pays all medical and medically related expenses through the Patient Compensation Fund. The bill passed the house, and was amended in the Senate Judiciary Committee to reflect a compromise bill negotiated by stakeholders. Under the amendment, hospitals will remain in the Medical Malpractice Act, but will be subject to higher caps on damages than independent providers such as doctors. Punitive damages and past and future medical expenses are excluded from all caps. The caps will increase over time based on the Consumer Price Index. The amended bill made other changes to the Medical Malpractice Act, including removing hospitals and outpatient facilities from the mandatory review by the New Mexico Medical Review Commission prior to filing suit and removing hospitals from participation in the Patient Compensation Fund as of December 31, 2026. HB75 passed the House and with amendments to which the House concurred, the Senate. It was signed into law April 1, 2021. 

Behavioral Health Practitioner Changes - HB125 – Governor signed 4-6-21

HB125 would make a number of changes to the licensing of behavioral health practitioners under the Professional Psychology Act, the Counseling and Therapy Act, and the Social Work Practice Act. The most significant of these changes automatically would extend licenses through public health emergencies and for six months thereafter, would allow supervision of trainees to be done through technology (rather than in person), would require that licensees “observe the code of ethics” rather than “be of good moral character,” and would require licensees to be New Mexico residents for the duration of their licensure. The Bill would also require the various Boards in charge of licensing for behavioral health practitioners to issue licenses to applicants who have held equivalent licenses in other jurisdictions for a specified number of years. HB125 was signed by the Governor on April 6, 2021.

Counseling and Therapy Licensure - HB178 – Governor signed 4-6-21

HB178 seeks to make a few minor clarifications to the Counseling and Therapy Practice Act. The bill would clarify that an alcohol and drug abuse counselor must have completed at least three years of work experience in the alcohol and drug abuse field before providing supervision to other counselors, and would add “human services” and “family services” to the list of types of degrees that qualify for inclusion in the fields of “counseling-related field” and “substance abuse-related field.” HB178 was signed by the Governor on April 6, 2021. 

No Behavioral Health Cost Sharing - SB317 – Governor signed 4-8-21

SB317 would prohibit health insurers from requiring cost-sharing, either in the form of coinsurance or copayments, from the patient for behavioral health services until January 1, 2027. SB317 was signed by the Governor on April 8, 2021.

DID NOT PASS

Podiatric Service Cost Sharing Limits - HB34 – Did not pass

HB34 would have prevented insurers from requiring larger copayments or coinsurance payments from patients than the patient pays for primary care services. HB34 was passed by the House referred to two Senate committees, both of which gave the bill a Do Pass recommendation. HB34 was not heard on the Senate floor before the legislature adjourned.

Independent Role for Nurse Anesthetists - HB35 – Did not pass

HB35 sought to change the scope of practice for a Certified Registered Nurse Anesthetist (“CRNA”) to allow the CRNA to function either in an independent role or in collaboration with other health care providers in accordance with the policies of a health care facility. The current law requires a CRNA to function as part of a team in which the patient’s care is directed by a physician, dentist, or podiatrist. HB35 was passed by unanimous vote in the House and received a Do Pass recommendation from the Senate Health and Public Affairs Committee. A second Senate committee did not consider the bill before the legislature adjourned. 

Rural Primary Care Clinician Loan Repayment - SB61 – Did not pass

SB61 would have provided for a loan repayment program to assist rural primary care organizations to recruit and retain eligible clinicians. The Rural Primary Care Clinician Loan Repayment Act further sought to create the “rural primary care clinician loan repayment fund” as a non-reverting fund in the state treasury. SB61 was passed in the Senate, but never made it to the House floor after having received a Do Pass recommendation from the House Health and Human Services Committee.

Healthcare Provider in Medical Malpractice - SB239 – Did not pass

SB239 sought to make significant changes to the Medical Malpractice Act, primarily in accordance with the December 31, 2020, Final Report of the Office of the Superintendent of Insurance’s recommendations for changes to the Act. The Act currently covers hospitals, outpatient health care facilities, physicians, podiatrists, chiropractors, and certified registered nurse anesthetists who choose to become qualified under the Act. HB239 proposed adding new providers to the definition of healthcare provider, including optometrists, psychologists, advanced practice nurses, doctors of acupuncture and oriental medicine, emergency medical technicians, and paramedics. It also would have increased the cap on damages, defined when and how punitive damages might be sought or awarded, established venues in which medical malpractice cases may be filed, and made changes to the review process required prior to filing a medical malpractice lawsuit. HB239 was supported by organizations representing hospitals, doctors, and nurses, but received significant opposition from supporters of HB75. HB239 died when HB75 was amended in the Senate Judiciary Committee to reflect a compromise bill negotiated by stakeholders to revise the Medical Malpractice Act. Please see discussion on HB75 for a description of the compromise bill passed by the legislature.

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TAXATION

PASSED

Sustainable Building Tax Credit - HB15 – Governor signed 4-6-21

HB15 expands Sustainable Building Tax Credits for personal income tax and corporate income tax. The bill retains the existing Sustainable Building Tax Credits, but provides that these credits are applicable only to projects that are started prior to the effective date of the bill and completed by April 1, 2023. The expanded tax credit requires a higher level of LEED certification to qualify for any credit, and provides lower tax credits per square foot as compared to the existing Sustainable Building Tax Credits. The expanded Sustainable Building Tax Credit sunsets in 2029. HB15 was signed by the Governor on April 6, 2021.

Omnibus Tax Bill - HB98 – Governor signed 4-5-21

HB98 makes changes to various sections of New Mexico tax law. Relevant changes are summarized in our 2021 Mid-Session Update. HB98 was signed into law on April 5, 2021.

Manufacturing Services Gross Receipts - HB278 – Governor signed 4-5-21

HB278 expands the manufacturing deduction for gross receipts to include manufacturing services. The bill originally included a new deduction from gross receipts for the sale of accounting services, engineering services, financial management services, information technology services, human resources services, legal services and temporary services if such services are made to another business entity. However, that new deduction was removed by amendment prior to passage. HB278 was signed into law on April 5, 2021.

Restaurant Gross Receipts Tax Deduction - SB1 – Signed by the Governor 3-3-21

SB1 creates a new gross receipts tax deduction for receipts of a food or beverage establishment received between March 1, 2021 and July 1, 2021 from the sale of prepared food or non-packaged beverages served or picked up at the food or beverage establishment, or delivered to customers for immediate consumption.  A “food or beverage establishment” includes food trucks, restaurants, bars, breweries, and winegrowers, but does not include fast food restaurants. The bill also a creates a new $600 income tax credit for tax year 2020 for persons with incomes up to $31,200 for individuals, and $39,000 for heads of household, surviving spouses, and married individuals filing joint returns. SB1 became effective March 3, 2021.

Changes to the Multistate Tax Compact - SB218 – Governor signed 4-6-21

SB218 amends a provision of the Multistate Tax Compact so as to no longer permit taxpayers to elect to apportion income in the manner provided by the Compact. The deletion of this election now requires that all taxpayers apportion their income according to the New Mexico Uniform Division of Income for Tax Purposes Act. This change was necessary to enforce the market-based sourcing changes enacted in 2019, and will ensure that taxpayers are required to follow the market-based sourcing requirements, rather than using the model law in the Compact. SB218 was signed into law on April 6, 2021 and will take effect on June 18, 2021, and will apply to taxable years beginning on and after January 1, 2021.

Water and Sanitation Gross Receipts Tax - SB328 – vetoed by the Governor

SB328 removes the six-year limitation on a water and sanitation gross receipts tax (“GRT”) increment imposed by a water and sanitation district. The effective date of this bill, if enacted, will be July 1, 2021. SB328 passed both chambers but was vetoed by the Governor.

Adjustment of Certain Taxes - SB410 – Governor signed 4-6-21

SB410 addresses issues arising from a federal partnership audit or adjustment request requiring corresponding state tax adjustments. The bill responds to the change in federal law applicable to auditing partnerships. There are two methods for partnerships and partners to report final net-positive federal adjustments due to a partnership level audit or administrative adjustment request.  First, the partnership can file a completed federal adjustment report with the Department and notify each partner of their distributive share of the final adjustment. Then partners must file their own federal adjustment report (which may be an amended return) including their distributive share of the federal tax adjustment.  Second, the partnership may irrevocably elect to pay the calculated tax deficiency at the partnership level and allocate payment among its partners. The state partnership representative has sole authority on behalf of the partnership and can be a different person than the federal partnership representative. SB410 also provides various avenues for claiming a refund and provides a general three-year window to make such claim. Finally, the bill allows a pass-through entity to file a composite withholding tax return on behalf of electing non-resident owners. SB410 passed both chambers by unanimous votes and was signed into law on April 6, 2021.

DID NOT PASS

Tax Penalties and Remedies Changes - HB90 – Did not pass

HB90 proposed several changes to the process for tax credit applications. In addition, the bill sought to clarify the protest procedures for property valued by the Taxation and Revenue Department’s (“Department”) Property Tax Division. The bill had a provision that property owners whose property was not previously reported to the Department, but which was subsequently valued by the Department, have the same protest rights of property owners who reported their property. Finally, the bill tried to clarify appeals of county-assessed property proceed to district court, while appeals relating to state-assessed property go to the Court of Appeals. HB90 died in committee. The bill was the second of the Tax Department’s omnibus bills, and it is likely it will be proposed in a future legislative session.

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UTILITIES

Electric Generation Project Requirements - HB105 – Governor signed 4-6-21

HB105 proposes a major change to last year’s HB50, which allowed IRB treatment for electric transmission and generating facilities and provided for in-lieu of property tax sharing for the state and various school districts. HB105 was signed into law by the Governor's signature on April 6, 2021.

Community Solar Act (Related to HB106) - SB84  – Governor signed 4-5-21

SB84 creates the Community Solar Act which provides for the development and operation of community solar facilities within the service territory of investor-owned electric utilities and, on an opt-in basis, of rural electric cooperatives. According to the bill, community solar projects are small, less than five megawatt-capacity operations supported by subscriptions to customers who receive pay for their solar power through their local utilities. Prior to passage, the bill was amended to stipulate those customers who choose not to participate in a community solar project are not forced to subsidize those who do. The Public Regulation Commission is required to adopt rules to establish a community solar program no later than April 1, 2022. HB106 never progressed out of committee. SB84 as amended passed both chambers and was signed into law on April 5, 2021.

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OTHER/MISCELLANEOUS

PASSED

At the outset of the session, Governor Grisham named pandemic relief as one of her top priorities. One aspect of this relief included a series of measures intended to provide restaurants with greater business opportunities by allowing alcohol delivery and reforming the state’s liquor licensure program.

Alcohol Deliveries - HB255 – Governor Signed On 3-17-21

HB255 provides for, among other things, home delivery of alcohol (within certain size limitations) concurrently with the delivery of food. The bill also gives a liquor license lessor holding a license on June 30, 2021 a deduction from net income equal to gross receipts from sales of alcoholic beverages made by each liquor license lessee if off premises consumption sales are less than 50% of total alcoholic beverage sales, not to exceed $50,000. A licensee holding an alcoholic beverage delivery permit may contract with a third-party delivery service as long as the third party may be separately liable for Liquor Control Act violations. After five years, the Department of Health will conduct a study evaluating consumption trends and public safety impacts of alcohol delivery. HB255 was signed by the Governor on March 17, 2021 and will become effective July 1, 2021.

Unlawful Liquor License Inducements - HB303 – Governor signed on 4-6-21

HB303 adds to the Liquor Control Act a prohibition on liquor license holders to give money or things of value to induce an individual to purchase any particular brand of alcohol (or refrain from purchasing any particular brand of alcohol). A licensee also cannot receive or accept such an inducement. HB303 was signed by the Governor on April 6, 2021. It becomes effective July 1, 2021.

Waive 2021 Liquor License Fees - SB2 – Signed by Governor on 3-9-21

SB2 requires the director of the Alcoholic Beverage Control Division to waive the next annual renewal fee for all licenses under the Liquor Control Act. Because the bill contains an emergency clause, SB2 became effective immediately when the Governor signed it on March 9, 2021.

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Federal and State Tax Guidance

IRS Clarification Regarding Entitlement to COVID Relief Credits

The Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act provided two new employer tax credits:

  • Sick and Family Leave Credit
  • Employee Retention Credit.

As a reminder, federal, state and local government entities, and any agencies or instrumentalities of those entities, are not entitled to either of these credits. However, tribal governments may be eligible to claim both the Sick and Family Leave Credit and the Employee Retention Credit. For more information on eligible employers, see:

If a Form 941, Employer’s Quarterly Federal Tax Return, claiming either of these credits has been filed by or on behalf of a federal, state or local government entity, or any agency or instrumentality of a government entity, the claimed credits will be disallowed and result in a balance due tax liability.

The following information provides more details on the credits:

Individual Federal and State Tax Filing Deadlines Extended

Federal

The Treasury Department and Internal Revenue Service has automatically extended the federal income tax filing due date for individuals for the 2020 tax year from April 15, 2021, to May 17, 2021. The IRS will be providing formal guidance in the coming days.

Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Penalties, interest and additions to tax will begin to accrue on any remaining unpaid balances as of May 17, 2021. Individual taxpayers will automatically avoid interest and penalties on the taxes paid by May 17.

State

The New Mexico Taxation and Revenue Department announced it will extend the deadline for filing and paying 2020 New Mexico Personal Income Taxes until May 17, 2021 in accordance with the federal extension. 

New Mexico Tax & Revenue Guidance on $600 Rebates, Restaurant GRT Relief

The Taxation and Revenue Department has provided formal guidance on the restaurant and bar Gross Receipts Tax relief recently signed into law by Gov. Michelle Lujan Grisham.

The temporary Gross Receipts Tax relief authorized by SB1 allows many restaurants, bars, breweries, and similar businesses a Gross Receipts Tax deduction for sales of prepared food and drinks made after March 1, 2021 and prior to July 1, 2021.

The tax relief is intended to help businesses that have been especially hard hit financially during the COVID-19 pandemic.

During the four-month period that the deduction is available, eligible businesses may choose to either forego Gross Receipts Tax on the deductible receipts or charge the tax and keep the amount charged. Fast food restaurants are not eligible for the deduction, but mobile food services do qualify.

More information, including how the deduction will be claimed, is available in Bulletin 100.39, which can be found by opening the Publications folder on the Forms & Publications  page of tax.newmexico.gov, then the Bulletins folder and then the 100 Series-General Information folder.

Draft Forms, Instructions for Business Taxes Available

New draft forms and instructions for Gross Receipts Tax, Withholding and other business taxes are now available from Taxation and Revenue. The Department is redesigning what is now known as the Combined Reporting System to create separate reporting for all business tax programs. The new system will take effect on July 1, 2021.

The draft forms and instructions posted this week are not yet final and may be revised. The drafts can be found on the Forms & Publications page of tax.newmexico.gov by opening the Tax Professionals folder and then the CRS Redesign Project Drafts folder.

Questions and concerns about the project can be emailed to TRDCRS.Redesign@state.nm.us.

The new forms are tailored to the needs of different taxpayers, and the redesign, which includes an upgrade to the Taxpayer Access Point self-service portal, will make it easier for taxpayers to manage their accounts. It also will increase internal automation and expedite the processing of refunds.

Hearing, Comment Period on Tax Law Changes

The Tax Department is proposing to amend, repeal and replace, repeal or adopt more than a dozen rules as in order to align with current law and provide guidance on the new method of sourcing to marketplace providers and sellers. These rules are part of the Tax Administration Act and the Gross Receipts and Compensating Tax Act. A public rule hearing is scheduled for Thursday, April 29, 2021 at 12:00 noon.

Written comments on the proposals can submitted on or before April 29, 2021. Please see www.tax.newmexico.gov/proposed-regulations-hearing-notices.aspx for the proposed regulations and additional information on the hearing and submitting comments

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