SB 147 — TAX CHANGES

and (4) with respect to the [tax ] taxes on gasoline and special fuel imposed by the Gasoline Tax Act and the Special Fuels Supplier Tax Act, make available for public h inspection at monthly intervals a report covering the number of g o gallons of gasoline, [and ] ethanol blended fuels and special t hr g e i k fuel received and deducted and the amount of tax paid by each h r i s person required to file a gasoline tax return or special fuel h , t, tax return or pay gasoline tax or special fuel excise tax in e u g e b l e e h the state of New Mexico.

n d d i = = o h B.

Nothing in this section shall be construed to l ] b ,d i a º e require the release of information that would violate an ragreement ibetween =the rstate tand ethe wfederal dinternal agreementrevenue betweenservice thefor statesharing andof information or any provision or rule of the federal internalInternal revenueRevenue mCode to which a nstate ois dsubject." mSECTION :4.

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 6 - e a n e d r e l u [ A d service for sharing of information or any provision or rule of the federal Internal Revenue Code to which a state is subject." SECTION 4.

[BUSINESS ] REPORTING LOCATION INSTRUCTIONS FOR PURPOSES OF REPORTING GROSS RECEIPTS AND USE--LOCATION-CODE DATABASE AND LOCATION-RATE DATABASE.-- SFC/STBTC/SB 147 A.

For purposes of the Gross Receipts and Page 6 Compensating Tax Act, Interstate Telecommunications Gross Receipts Tax Act, Leased Vehicle Gross Receipts Tax Act and any act authorizing the imposition of a local option gross receipts or compensating tax, a [person ] taxpayer that has gross receipts and a [person ] taxpayer using property or services in New Mexico in a taxable manner shall report the gross receipts and use to the proper [business] reporting location as provided in this section.

The [business] reporting location for gross receipts from the sale, lease or granting of a license to use real property located in New Mexico, and any related h deductions, shall be the location of the property.

g o C.

The [business] reporting location for gross t hr g e i k receipts from the sale or license of [tangible personal ] h r i s property, other than real propertyproperty, , and any related deductions, h , t, shall be at the following locations:

e u g e b l (1) if the property is received by the e e h n d d i = = o h purchaser at the New Mexico [business ] location of the seller, l ] b ,d i a º e the location of the seller;

r(2) iif =the rproperty tis enot wreceived dby (2)the ifpurchaser at the propertylocation isof notthe receivedseller, the location indicated by instructions for delivery to the mpurchaser, aor nthe opurchaser's ddonee, mwhen :known to the seller;

b(3) eif dParagraphs s(1) ºand o(2) tof nthis =SFC/STBTC/SB .225709.1AIC147 Februarysubsection 28,do 2023not (7:47pm)apply, sthe klocation mindicated eby -an 7address -Page e7 afor nthe e d r e l u [ A d SFC/STBTC/SB 147 purchaser atavailable [afrom business ] the locationbusiness records of the seller,seller thethat locationare indicatedmaintained byin instructions for delivery to the purchaser,ordinary orcourse theof purchaser'sbusiness; donee, when known to the seller;

(3) if Paragraphs (1) and (2) of this subsection do not apply, the location indicated by an address for the purchaser available from the business records of the seller that are maintained in the ordinary course of business;

or (5) if Paragraphs (1) through (4) of this subsection do not apply, including a circumstance in which the h seller is without sufficient information to apply those u » r standards, the location from which the property was shipped or t h g e transmitted.

l i h r i s D.

The [business ] reporting location for gross h , e h receipts from the lease of tangible personal property, t u g e b l including vehicles, other transportation equipment and other e e , gh n d d i = = o h mobile tangible personal property, and any related deductions, l ] b ,d i a º r shall be the location of primary use of the property, as e r = t e w d indicated by the address for the property provided by the mlessee athat nis oavailable dto mthe :lessor from the lessor's records maintained in the ordinary course of business;

b r e t º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 8 - e a n e d r e l u [ A d lessee that is available to the lessor from the lessor's records maintained in the ordinary course of business;

The location of primarySFC/STBTC/SB [business147 location]primary use shall not be altered by intermittent use at Page 8 different locations, such as use of business property that accompanies employees on business trips and service calls.

The [business] reporting location for gross receipts from the sale, lease or license of franchises, and any related deductions, shall be where the franchise is used.

The [business] reporting location for gross receipts from the performance or sale of the following services, and any related deductions, shall be at the following locations:

(1) for professional services performed in New Mexico, other than construction-related services, or performed outside New Mexico when the product of the service is initially used in New Mexico, the location of the performer of the service or seller of the product of the service, as h appropriate;

g o (2) for construction services and t hr g e i k construction-related services performed for a construction h r i s project in New Mexico, the location of the construction site;

h , t, (3) for services with respect to the selling e u g e b l of real estate located in New Mexico, the location of the real e e h n d d i = = o h estate;

l ] b ,d i a º e (4) for transportation of persons or property r i = r t e w d in, into or from New Mexico, the location where the person or mproperty aenters nthe ovehicle; d m :

band e(5) dfor sservices ºother othan tthose ndescribed =SFC/STBTC/SB .225709.1AIC147 Februaryin 28,Paragraphs 2023(1) (7:47pm)through s(4) kof mthis esubsection, -the Page 9 -location ewhere athe nproduct eof dthe rservice eis ldelivered. u [ A d SFC/STBTC/SB 147 property enters the vehicle;

and (5) for services other than those described in Paragraphs (1) through (4) of this subsection, the location where the product of the service is delivered.

Except as provided in Subsection H of this section, the reporting location for uses of property or services subject to the compensating tax shall be [reported at ] the [business ] location at which gross receipts would have been required to be reported had the transaction been subject to the gross receipts tax.

If a [person] taxpayer subject to the compensating tax can demonstrate that the first use upon which compensating tax is imposed occurred at a time and place different from the time and place of the purchase, then the reporting location for the compensating tax shall be [reported at] the [business] location of the first use.

hI. [I.

The secretary shall designatedevelop codesa tolocation-code identifydatabase gthat oprovides the businessreporting locationslocation forcodes adesignated person'sby gross receipts, or use t hr g e i k for purchases subject to the compensatingsecretary. tax, and deductions h r i s related to those receipts or that use shall be reported.

hThe ,secretary t,shall J.]also I.develop and provide to taxpayers a location-rate database that sets out the tax rates applicable to reporting locations within the state, by address, and sellers who properly rely on this database shall not be liable for any additional tax due to the use of an incorrect rate.

TheJ. secretary shall develop a location-code e u g e b l e e h database that provides the [business ] reporting location codes n d d i = = o h designated [pursuant to Subsection I of this section ] by the l ] b ,d i a º e secretary.

The secretary shall also develop and provide to r i = r t e w d taxpayers a location-rate database that sets out the tax rates m a n o d m :

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 10 - e a n e d r e l u [ A d applicable to [business] reporting locations within the state, by address, and sellers who properly rely on this database shall not be liable for any additional tax due to the use of an incorrect rate.

[K.

] J.

[(1)(1) "business"gross location"receipts" meansmeans, theas codeapplicable, designated"gross byreceipts" theas departmentused toin identifythe businessGross locationsReceipts and requiredSFC/STBTC/SB to147 beCompensating usedTax toAct reportand the grossLeased receipts,Vehicle orGross useReceipts forPage purchases10 subjectTax toAct theand compensating"interstate tax,telecommunications andgross deductionsreceipts" relatedin tothe thoseInterstate receiptsTelecommunications orGross thatReceipts use;Tax Act;

(2)](2) (1)"in-person "grossservice" receipts"means means,a asservice applicable,physically "grossprovided receipts"in asperson usedby in the Grossservice Receiptsprovider, andwhere Compensatingthe Taxcustomer Actor and the Leasedcustomer's Vehiclereal Grossor Receiptstangible Taxpersonal Actproperty andupon "interstatewhich telecommunicationsthe grossservice receipts"is performed is in the Interstatesame Telecommunicationslocation Grossas Receiptsthe Taxservice Act;provider at the time the service is performed;

[(3)]and (2)(3) "in-person"professional service" means a serviceservice, physicallyother providedthan inan personin-person byservice, thethat servicerequires provider,either wherean theadvanced customerdegree orfrom thean customer'saccredited realpost-secondary oreducational tangibleinstitution personalor propertya uponlicense whichfrom the servicestate isto performedperform." isSECTION in5. the same h location as the service provider at the time the service is g o performed;

andSection t7-1-26 hrNMSA g1978 e(being iLaws k1965, [(4)]Chapter (3)248, "professionalSection service"28, meansas aamended) his ramended i s service, other than an in-person service, that requires either h , t, an advanced degree from an accredited post-secondary e u g e b l educational institution or a license from the state to eread: e h n d d i = = o h perform." l ] b ,d i a º e SECTION 5.

Section"7-1-26. 7-1-26 NMSA 1978 (being Laws 1965, r i = r t e w d Chapter 248, Section 28, as amended) is amended to read:

m a n o d m :

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 11 - e a n e d r e l u [ A d SFC/STBTC/SB 147 "7-1-26.

A person who believes that an amount of tax has been paid by or withheld from that person in excess of that for which the person was liable, who has been denied a credit or rebate claimed or who claims a prior right to property in the possession of the department pursuant to a levy made pursuant to the authority of Sections 7-1-31 through 7-1-34 NMSA 1978 may claim a refund by directing to the secretary, within the time limitations provided by Subsections F and G SFC/STBTC/SB 147 of this section, a written claim for refund that, except as Page 11 provided in Subsection K of this section, includes:

(2) the type of tax for which a refund is being claimed, the credit or rebate denied or the property h levied upon;

g o (3) the sum of money or other property being t hr g e i k claimed;

h r i s (4) with respect to a refund, the period for h , t, which overpayment was made;

e u g e b l e e h (5) a brief statement of the facts and the law n d d i = = o h on which the claim is based, which may be referred to as the l ] b ,d i a º e "basis for the refund", which may include documentation that r i = r t e w d substantiates the written claim and supports the taxpayer's mbasis afor nthe orefund; d m :

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 12 - e a n e d r e l u [ A d basis for the refund;

SFC/STBTC/SB 147 C.

If the department requests additional relevant Page 12 documentation from a taxpayer who has submitted a claim for refund, the claim for refund shall not be considered incomplete provided the taxpayer submits sufficient information for the department to make a determination.

(1) claim is denied in whole or in part in writing, the person shall not refile the denied claim, but the h person, within ninety days after either the mailing or delivery g o of the denial of all or any part of the claim, may elect to t hr g e i k pursue only one of the remedies provided in Subsection E of h r i s this section;

and h , t, (2) department has neither granted nor denied e u g e b l any portion of a complete claim for refund within one hundred e e h n d d i = = o h eighty days after the claim was mailed or otherwise delivered l ] b ,d i a º e to the department, the person may elect to treat the claim as r i = r t e w d denied and elect to pursue only one of the remedies provided in mSubsection aE nof othis dsection. m :

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 13 - e a n e d r e l u [ A d SFC/STBTC/SB 147 Subsection E of this section.

(1) direct to the secretary, pursuant to the SFC/STBTC/SB 147 provisions of Section 7-1-24 NMSA 1978, a written protest Page 13 that sets forth:

h (c) a demand for the refund to the g o taxpayer of that amount or that property;

and t hr g e i k (d) a recitation of the facts of the h r i s claim for refund;

or h , t, (2) commence a civil action in the district e u g e b l e e h court for Santa Fe county by filing a complaint setting forth n d d i = = o h the circumstance of the claimed overpayment, denied credit or l ] b ,d i a º e rebate or denial of a prior right to property levied upon by r i = r t e w d the department alleging that on account thereof the state is mindebted ato nthe oplaintiff din mthe :amount or property stated, together with any interest allowable, demanding the refund to the plaintiff of that amount or property and reciting the facts of the claim for refund.

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 14 - e a n e d r e l u [ A d indebted to the plaintiff in the amount or property stated, together with any interest allowable, demanding the refund to the plaintiff of that amount or property and reciting the facts of the claim for refund.

SFC/STBTC/SB 147 F.

Except as otherwise provided in Subsection G of Page 14 this section, a credit or refund of any amount of overpaid tax, penalty or interest may be allowed or made to a person if a claim is properly filed:

(c) in the case of tax with respect to h which a net-negative federal adjustment, as that term is used g o in Section 7-1-13 NMSA 1978, relates, the final determination t hr g e i k date of that federal adjustment, as provided in Section 7-1-13 h r i s NMSA 1978;

h , t, (d) the final determination of value e u g e b l occurs with respect to any overpayment that resulted from a e e h n d d i = = o h disapproval by any agency of the United States or the state of l ] b ,d i a º e New Mexico or any court of increase in value of a product rsubject ito =taxation rpursuant tto ethe wOil dand subjectGas toSeverance taxationTax pursuantAct, tothe Oil and Gas Conservation Tax Act, the Oil and Gas SeveranceEmergency School Tax mAct, athe nOil oand dGas mAd :Valorem Production Tax Act or the Natural Gas Processors Tax Act;

bor eSFC/STBTC/SB d147 s(e) ºin othe tcase nof =a .225709.1AICclaim Februaryrelated 28,to 2023Page (7:47pm) s k m e - 15 -property etaken aby nlevy, e d r e l u [ A d SFC/STBTC/SB 147 Act, the Oildate and Gas Conservation Tax Act, the Oilproperty andwas Gaslevied Emergencyupon Schoolas Taxprovided Act,in the Oil and Gas Ad Valorem Production Tax ActAdministration or the Natural Gas Processors Tax Act;

or (e) in the case of a claim related to property taken by levy, the date the property was levied upon as provided in the Tax Administration Act;

(3) in the case of a taxpayer under audit by the department who has signed a waiver of the limitation on assessments on or after July 1, 1993 pursuant to Subsection F h of Section 7-1-18 NMSA 1978, only for a refund of the same tax u » r paid for the same period for which the waiver was given, and t h g e only until a date one year after the later of the date of the l i h r i s mailing of an assessment issued pursuant to the audit, the date h , e h of the mailing of final audit findings to the taxpayer or the t u g e b l date a proceeding is begun in court by the department with e e , gh n d d i = = o h respect to the same tax and the same period;

l ] b ,d i a º r (4) in the case of a payment of an amount of e r = t e w d tax not made within three years of the end of the calendar year min which the original due date of the tax or date of the assessment of the department occurred, only for a nclaim ofor drefund mof :that amount of tax and only within one year of the SFC/STBTC/SB 147 date on which the tax was paid;

bor rPage e16 t(5) ºin othe tcase nof =a .225709.1AICtaxpayer Februarywho 28,has 2023been (7:47pm)assessed sa ktax mon eor -after 16July -1, e1993 apursuant nto eSubsection dB, rC eor lD uof [Section A7-1-18 dNMSA in1978 whichand thean originalassessment duethat dateapplies ofto thea taxperiod orending dateat ofleast three years prior to the assessmentbeginning of the departmentyear occurred,in which the assessment was made, only for a claimrefund for refundthe ofsame thattax amountfor the period of taxthe andassessment onlyor for any period following that period within one year of the date onof which the taxassessment wasunless paid;a longer period for claiming a refund is provided in this section.

or (5) in the case of a taxpayer who has been assessed a tax on or after July 1, 1993 pursuant to Subsection B, C or D of Section 7-1-18 NMSA 1978 and an assessment that applies to a period ending at least three years prior to the beginning of the year in which the assessment was made, only for a refund for the same tax for the period of the assessment or for any period following that period within one year of the date of the assessment unless a longer period for claiming a refund is provided in this section.

No credit or refund shall h be allowed or made to a person claiming a refund of gasoline u » r tax pursuant to Section 7-13-17 NMSA 1978 unless the refund is t h g e claimed within six months of the date of purchase of the l i h r i s gasoline and the gasoline has been used at the time the claim h , e h for refund is made.

t u g e b l H.

If, as a result of an audit by the department or e e , gh n d d i = = o h a managed audit covering multiple periods, an overpayment of l ] b ,d i a º r tax is found in any period under the audit and if the taxpayerSFC/STBTC/SB e147 rtaxpayer = t e w d files a claim for refund for the overpayments Page 17 identified in the maudit, athat noverpayment omay dbe mcredited :against an underpayment of the same tax found in another period under audit pursuant to Section 7-1-29 NMSA 1978.

b r e t º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 17 - e a n e d r e l u [ A d SFC/STBTC/SB 147 audit, that overpayment may be credited against an underpayment of the same tax found in another period under audit pursuant to Section 7-1-29 NMSA 1978.

A refund of tax paid under any tax or tax act administered pursuant to Subsection B of Section 7-1-2 NMSA 1978 may be made, at the discretion of the department, in the form of credit against future tax payments if future tax liabilities in an amount at least equal to the credit amount reasonably may be expected to become due.

For the purposes of this section, "oil and gas tax return" means a return reporting tax due with respect to oil, natural gas, liquid hydrocarbons, carbon dioxide, helium or nonhydrocarbon gas pursuant to the Oil and Gas Severance Tax Act, the Oil and Gas Conservation Tax Act, the Oil and Gas Emergency School Tax Act, the Oil and Gas Ad Valorem Production Tax Act, the Natural Gas Processors Tax Act or the Oil and Gas h Production Equipment Ad Valorem Tax Act.

u » r K.

The filing of a fully completed original income t h g e tax return, corporate income tax return, corporate income and l i h r i s franchise tax return, estate tax return, [or ] special fuel h , e h excise tax return or annual insurance premium tax return that t u g e b l shows a balance due the taxpayer or a fully completed amended eincome etax ,return, ghan namended dcorporate dincome itax =return, =an oamended hcorporate income and franchise tax return, an amended corporateSFC/STBTC/SB income147 estate tax return, an lamended ]special bfuel ,dexcise itax areturn, ºPage r18 an amended corporateoil income and franchisegas tax return,return or an amended einsurance rpremium =tax treturn ethat wshows da estatelesser tax return,liability anthan amendedthe specialoriginal fuelreturn exciseconstitutes taxthe return,filing mof a nclaim ofor drefund mfor :the difference in tax due shown on the original and amended returns.

b r e t º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 18 - e a n e d r e l u [ A d [or] an amended oil and gas tax return or an amended insurance premium tax return that shows a lesser tax liability than the original return constitutes the filing of a claim for refund for the difference in tax due shown on the original and amended returns.

The director of the [alcohol and gaming ] alcoholic beverage control division of the regulation and licensing department shall not allow the transfer, assignment, lease or sale of any liquor license pursuant to the provisions of the Liquor Control Act until the director receives written h notification from the secretary or secretary's delegate that:

g o (1) the licensee or any person authorized to t hr g e i k use the license is not a delinquent taxpayer as [defined ] h r i s provided in Section 7-1-16 NMSA 1978 only with respect to the h , t, liquor excise tax or the gross receipts tax;

or eSFC/STBTC/SB u147 g e b l (2) the transferee, assignee, buyer or lesseePage e19 elessee h n d d i = = o h has entered into a written agreement with the secretary or l ] b ,d i a º e secretary's delegate in which the transferee, assignee, buyer r i = r t e w d or lessee has assumed full liability for payment of all taxes mdue aor nthat omay dbecome mdue :from the licensee with respect to the liquor excise tax or the gross receipts tax.

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 19 - e a n e d r e l u [ A d SFC/STBTC/SB 147 due or [which ] that may become due from [engaging in business authorized by the liquor license] the licensee with respect to the liquor excise tax or the gross receipts tax.

The director of the [alcohol and gaming ] alcoholic beverage control division of the regulation and licensing department shall not allow the renewal of any liquor license pursuant to the provisions of the Liquor Control Act until the director receives notification from the secretary or secretary's delegate that on a certain date:

(1) [there is no assessed tax liability from engaging in business authorized by the liquor license or, if there is assessed tax liability, the licensee is not a delinquent taxpayer] the licensee is not a delinquent taxpayer as provided in Section 7-1-16 NMSA 1978 only with respect to the liquor excise tax or the gross receipts tax;

and (2) there are no unfiled tax returns due from h [engaging in business authorized by the liquor license ] the g o licensee with respect to the liquor excise tax or the gross t hr g e i k receipts tax." h r i s SECTION 7.

Section 7-2-5.5 NMSA 1978 (being Laws 1995, h , t, Chapter 42, Section 1) is amended to read:

e u g e b l e e h "7-2-5.5.

EXEMPTION--EARNINGS BY INDIANS, THEIR INDIAN n d d i = = o h SPOUSES AND INDIAN DEPENDENTS ON INDIAN LANDS.--Income earned lby ]a bmember ,dof i a ºNew eMexico byfederally recognized Indian SFC/STBTC/SB 147 nation, tribe, band or pueblo, the member's spouse or Page 20 dependent, who is a member of a New Mexico federally recognized Indian nation, rtribe, iband =or rpueblo, tis eexempt wfrom dstate mincome atax nif othe tribe,income bandis earned from work performed within and the member, spouse or pueblo,dependent [hisis ]domiciled within the boundaries of the Indian member's spouseor the spouse's reservation or dependent,pueblo dgrant mor :within the boundaries of land defined as "Indian country" pursuant to 18 U.S.C.

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 20 - e a n e d r e l u [ A d who is a member of a New Mexico federally recognized Indian nation, tribe, band or pueblo, is exempt from state income tax if the income is earned from work performed within and the member, spouse or dependent [lives ] is domiciled within the boundaries of the Indian member's or the spouse's reservation or pueblo grant or within the boundaries of [lands held in trust by the United States for the benefit of the member or spouse or his nation, tribe, band or pueblo, subject to restriction against alienation imposed by the United States] land defined as "Indian country" pursuant to 18 U.S.C.

h B.

"apportioned net income" or "apportioned net g o loss" means net income allocated and apportioned to New Mexico t hr g e i k pursuant to the provisions of the Corporate Income and h r i s Franchise Tax Act or the Uniform Division of Income for Tax h , t, Purposes Act, but excluding from the sales factor any sales e u g e b l that represent intercompany transactions between members of the e e h n d d i = = o h filing group;

l ] b ,d i a º e C.

"base income" means the federal taxable income rSFC/STBTC/SB i147 = r t e w d or the federal net operating loss of a corporation for the mPage 21 taxable year calculated pursuant to the Internal Revenue Code, after special deductions provided in Sections 241 through 249 of the Internal Revenue Code but without any deduction for net operating losses, as if the corporation filed a nfederal otax dreturn mas :a separate domestic entity, modified as follows:

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 21 - e a n e d r e l u [ A d SFC/STBTC/SB 147 taxable year calculated pursuant to the Internal Revenue Code, after special deductions provided in Sections 241 through 249 of the Internal Revenue Code but without any deduction for net operating losses, as if the corporation filed a federal tax return as a separate domestic entity, modified as follows:

[and ] (c) the amount of any deduction, other than for premiums, for amounts paid directly or indirectly to a commonly controlled entity that is exempt from corporate income tax pursuant to Section 7-2A-4 NMSA 1978;

and h (d) for taxable years beginning on or g o after January 1, 2023, an amount equal to the amount of credit t hr g e i k claimed and allowed for that year pursuant to Section 7-3A-10 h r i s NMSA 1978 with respect to the distributed net income of a h , t, pass-through entity;

e u g e b l e e h (2) subtracting from that income:

n d d i = = o h (a) income from obligations of the lSFC/STBTC/SB ]147 b ,d i a º e United States net of expenses incurred to earn that income;

rPage i22 =(b) rother tamounts ethat wthe dstate (b)is otherprohibited amountsfrom thattaxing because of the laws or constitution of this state isor mthe aUnited nStates onet dof many :related expenses;

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 22 - e a n e d r e l u [ A d prohibited from taxing because of the laws or constitution of this state or the United States net of any related expenses;

and (4) for a taxpayer that conducts a lawful business pursuant to the laws of this state, excludes an amount equal to any expenditure that is eligible to be claimed as a h federal income tax deduction but is disallowed pursuant to g o Section 280E of the Internal Revenue Code, as that section may t hr g e i k be amended or renumbered;

h r i s D.

"captive real estate investment trust" means a hSFC/STBTC/SB ,147 t, corporation, trust or association taxed as a real estate ePage u23 g e b l investment trust pursuant to Section 857 of the Internal e e h n d d i = = o h Revenue Code, the shares or beneficial interests of which are l ] b ,d i a º e not regularly traded on an established securities market;

r i = r t e w d provided that more than fifty percent of any class of mbeneficial interests or shares of the real estate investment trust are owned directly, indirectly or constructively by the taxpayer during all or a npart oof dthe mtaxpayer's :taxable year;

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 23 - e a n e d r e l u [ A d SFC/STBTC/SB 147 beneficial interests or shares of the real estate investment trust are owned directly, indirectly or constructively by the taxpayer during all or a part of the taxpayer's taxable year;

h (a) a common parent corporation included g o in a group of corporations described in Paragraph (1) of this t hr g e i k subsection;

and h r i s (b) included in a group of corporations hSFC/STBTC/SB ,147 t, described in Paragraph (2) of this subsection;

ePage u24 g e b l e e h F.

"consolidated group" means the group of entities n d d i = = o h properly filing a federal consolidated return under the l ] b ,d i a º e Internal Revenue Code for the taxable year;

r i = r t e w d G.

"corporation" means corporations, joint stock mcompanies, areal nestate otrusts dorganized mand :operated under the Real Estate Trust Act, financial corporations and banks, other business associations and, for corporate income tax purposes, partnerships and limited liability companies taxed as corporations under the Internal Revenue Code;

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 24 - e a n e d r e l u [ A d companies, real estate trusts organized and operated under the Real Estate Trust Act, financial corporations and banks, other business associations and, for corporate income tax purposes, partnerships and limited liability companies taxed as corporations under the Internal Revenue Code;

"filing group" means a group of corporations properly included in a return pursuant to Section 7-2A-8.3 NMSA 1978 for a particular taxable year;

(1) the amount of net loss properly reported to New Mexico for taxable years beginning January 1, 2013 and h prior to January 1, 2020 as part of a timely filed original gSFC/STBTC/SB o147 return, or an amended return for those taxable years filed tPage hr25 g e i k prior to January 1, 2020, to the extent such loss can be h r i s attributed to one or more corporations that are properly h , t, included in the taxpayer's return for the first taxable year e u g e b l beginning on or after January 1, 2020;

e e h n d d i = = o h (2) reduced by:

l(a) ]adding bback ,ddeductions ithat awere ºtaken eby (a)the addingcorporation backor deductionscorporations thatfor wereroyalties ror iinterest =paid rto tone eor wmore drelated takencorporations, bybut only to the corporationextent orthat corporationssuch foradjustment royaltieswould ornot mcreate a nnet oloss dfor msuch :related corporations;

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 25 - e a n e d r e l u [ A d SFC/STBTC/SB 147 interest paid to one or more related corporations, but only to the extent that such adjustment would not create a net loss for such related corporations;

or hSFC/STBTC/SB 147 (2) the combined base income and losses of gPage o26 corporations that are part of a filing group that is computed t hr g e i k after eliminating intercompany income and expense in a manner h r i s consistent with the consolidated filing requirements of the h , t, Internal Revenue Code and the Corporate Income and Franchise e u g e b l e e h Tax Act;

n d d i = = o h N.

"net operating loss carryover" means the l ] b ,d i a º e apportioned net loss properly reported on an original or r i = r t e w d amended tax return for taxable years beginning on or after mJanuary a1, n2020 oby dthe mtaxpayer: :

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 26 - e a n e d r e l u [ A d January 1, 2020 by the taxpayer:

(a) the amount of the net operating loss carryover attributed to an entity that has left the filing group, computed in a manner consistent with the SFC/STBTC/SB 147 consolidated filing requirements of the Internal Revenue Code Page 27 and applicable regulations, as if the taxpayer were filing a consolidated return;

and h (b) the amount of net operating loss g o deductions properly taken by the taxpayer;

t hr g e i k O.

"net operating loss deduction" means the portion h r i s of the net operating loss carryover that may be deducted from h , t, the taxpayer's apportioned net income under the Internal e u g e b l Revenue Code as of January 1, 2018 for the taxable year in e e h n d d i = = o h which the deduction is taken, including the eighty percent l ] b ,d i a º e limitation of Section 172(a) of the Internal Revenue Code as of r i = r t e w d January 1, 2018 calculated on the basis of the taxpayer's mapportioned anet nincome; o d m :

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 27 - e a n e d r e l u [ A d SFC/STBTC/SB 147 apportioned net income;

"related corporation" means a corporation that is under common ownership with one or more corporations but SFC/STBTC/SB 147 that is not included in the same tax return;

Page 28 S.

"return" means any tax or information return, including a water's-edge or worldwide combined return, a h consolidated return, a declaration of estimated tax or a claim u » r for refund, including any amendments or supplements to the t h g e return, required or permitted pursuant to a law subject to l i h r i s administration and enforcement pursuant to the Tax h , e h Administration Act and filed with the department by or on t u g e b l behalf of any person;

e e , gh n d d i = = o h T.

"secretary" means the secretary of taxation and l ] b ,d i a º r revenue or the secretary's delegate;

e r = t e w d U.

"separate year return" means a properly filed moriginal or amended return for a ntaxable oyear dbeginning mon :or after January 1, 2020 by a taxpayer reporting a loss, a portion of which is claimed as part of the net operating loss carryover by another taxpayer in a subsequent return period;

b r e t º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 28 - e a n e d r e l u [ A d original or amended return for a taxable year beginning on or after January 1, 2020 by a taxpayer reporting a loss, a portion of which is claimed as part of the net operating loss carryover by another taxpayer in a subsequent return period;

"state or local bond" means a bond issued by a state other than New Mexico or by a local government other than one of New Mexico's political subdivisions, the interest from which is excluded from income for federal income tax SFC/STBTC/SB 147 purposes under Section 103 of the Internal Revenue Code, as Page 29 that section may be amended or renumbered;

"taxable year" means the calendar year or fiscal h year upon the basis of which the net income is computed under g o the Corporate Income and Franchise Tax Act and includes, in the t hr g e i k case of the return made for a fractional part of a year under h r i s the provisions of that act, the period for which the return is h , t, made;

e u g e b l Z.

"taxpayer" means any corporation or group of e e h n d d i = = o h corporations filing a return pursuant to Section 7-2A-8.3 NMSA l ] b ,d i a º e 1978 subject to the taxes imposed by the Corporate Income and r i = r t e w d Franchise Tax Act;

mAA. a n o d m :

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 29 - e a n e d r e l u [ A d SFC/STBTC/SB 147 AA.

and (2) economically interdependent with one SFC/STBTC/SB 147 another as demonstrated by the following factors:

Page 30 (a) centralized management;

h (1) corporations that are exempt from g o corporate income tax pursuant to Section 7-2A-4 NMSA 1978;

and t hr g e i k (2) corporations wherever organized or h r i s incorporated that have less than twenty percent of their h , t, property, payroll and sales sourced to locations within the e u g e b l e e h United States, following the sourcing rules of the Uniform n d d i = = o h Division of Income for Tax Purposes Act;

and l ] b ,d i a º e CC.

"worldwide combined group" means all members of r i = r t e w d a unitary group, except members that are exempt from corporate mincome atax npursuant oto dSection m7-2A-4 :NMSA 1978, irrespective of the country in which the corporations are incorporated or conduct business activity." SECTION 9.

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 30 - e a n e d r e l u [ A d income tax pursuant to Section 7-2A-4 NMSA 1978, irrespective of the country in which the corporations are incorporated or conduct business activity." SECTION 9.

"buying" or "selling" means a transfer of property for consideration or the performance of service for SFC/STBTC/SB 147 consideration;

Page 31 B.

"disclosed agency" means [an agent receiving money on behalf of a principal if the agent or the agent's h principal disclosed the agency relationship to a third party g o from which the agent receives money, or if the third party t hr g e i k otherwise has actual knowledge that the agent receives money on h r i s behalf of the principal] a person receiving money from a third h , t, party on behalf of another if the person receiving the money, e u g e b l or the person on whose behalf the money is received, disclosed e e h n d d i = = o h the relationship to the third party from whom the person l ] b ,d i a º e receives money, or if the third party otherwise has actual r i = r t e w d knowledge that the person to whom the money is paid receives mthe amoney non obehalf dof manother; :

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 31 - e a n e d r e l u [ A d SFC/STBTC/SB 147 the money on behalf of another ;

SFC/STBTC/SB 147 (2) participation in progress reviews, Page 32 briefings, consultations and conferences conducted by the performer of services;

(4) inspection of preliminary prototypes h developed by the performer of services;

or g o (5) similar activities;

t hr g e i k G.

"lease" or "leasing" means an arrangement h r i s whereby, for a consideration, the owner of property grants h , t, another person the exclusive right to possess and use the e u g e b l e e h property for a definite term;

n d d i = = o h H.

"licensing" or "license" means an arrangement l ] b ,d i a º e whereby, for a consideration, the owner of property grants r i = r t e w d another person a revocable, non-exclusive right to use the mproperty; a n o d m :

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 32 - e a n e d r e l u [ A d property;

"manufactured home" means a movable or portable housing structure for human occupancy that exceeds either a width of eight feet or a length of forty feet constructed to be towed on its own chassis and designed to be installed with SFC/STBTC/SB 147 or without a permanent foundation;

Page 33 K.

"manufacturing service" means the service of combining or processing components or materials owned by h another, but does not include construction services;

g o electric power generation;

processing of natural resources, t hr g e i k including hydrocarbons;

or the processing or preparation of h r i s meals for immediate consumption;

h , t, M.

"marketplace provider" means a person who e u g e b l facilitates the sale, lease or license of tangible personal e e h n d d i = = o h property or services or licenses for use of real property on a l ] b ,d i a º e marketplace seller's behalf, or on the marketplace provider's r i = r t e w d own behalf, by:

m(1) alisting nor oadvertising dthe msale, :lease or license, by any means, whether physical or electronic, including by catalog, internet website or television or radio broadcast;

band e(2) deither sdirectly ºor oindirectly, tthrough nagreements =or .225709.1AICarrangements Februarywith 28,third 2023parties (7:47pm)collecting sSFC/STBTC/SB k147 mpayment efrom -the 33customer -and etransmitting athat npayment eto dPage r34 ethe lseller, uregardless [of Awhether d SFC/STBTC/SB 147 (1) listing or advertising the sale,marketplace leaseprovider orreceives license,compensation by any means, whether physical or electronic,other includingconsideration byin catalog,exchange internetfor websitethe ormarketplace televisionprovider's orservices; radio broadcast;

and (2) either directly or indirectly, through agreements or arrangements with third parties collecting payment from the customer and transmitting that payment to the seller, regardless of whether the marketplace provider receives compensation or other consideration in exchange for the marketplace provider's services;

(1) an individual, estate, trust, receiver, h cooperative association, club, corporation, company, firm, u » r partnership, limited liability company, limited liability t h g e partnership, joint venture, syndicate or other entity, l i h r i s including any gas, water or electric utility owned or operated h , e h by a county, municipality or other political subdivision of the t u g e b l state;

or e e , gh n d d i = = o h (2) a national, federal, state, Indian or l ] b ,d i a º r other governmental unit or subdivision, or an agency, e r = t e w d department or instrumentality of any of the foregoing;

mP. a n o d m :

b r e t º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 34 - e a n e d r e l u [ A d P.

(3) licenses, including licenses of digital goods, but not including the licenses of copyrights, SFC/STBTC/SB 147 trademarks or patents;

and Page 35 (4) franchises;

(3) developing a new or improved product, process or system with new or improved function, performance, reliability or quality, whether or not the new or improved product, process or system is offered for sale, lease or other h transfer;

g o (4) developing new uses or applications for an t hr g e i k existing product, process or system, whether or not the new use h r i s or application is offered as the rationale for purchase, lease h , t, or other transfer of the product, process or system;

e u g e b l (5) developing analytical or survey activities e e h n d d i = = o h incorporating technology review, application, trade-off study, l ] b ,d i a º e modeling, simulation, conceptual design or similar activities, r i = r t e w d whether or not offered for sale, lease or other transfer;

or m(6) adesigning nand odeveloping dprototypes mor :SFC/STBTC/SB 147 integrating systems incorporating the advances, developments Page 36 or improvements included in Paragraphs (1) through (5) of this subsection;

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 35 - e a n e d r e l u [ A d SFC/STBTC/SB 147 (6) designing and developing prototypes or integrating systems incorporating the advances, developments or improvements included in Paragraphs (1) through (5) of this subsection;

"Service" includes construction activities and all tangible personal property that will become an ingredient or component part of a h construction project.

That tangible personal property retains g o its character as tangible personal property until it is t hr g e i k installed as an ingredient or component part of a construction h r i s project in New Mexico.

Sales of tangible personal property h , t, that will become an ingredient or component part of a e u g e b l e e h construction project to persons engaged in the construction n d d i = = o h business are sales of tangible personal property;

and l ] b ,d i a º e T.

"use" or "using" includes use, consumption or r i = r t e w d storage other than storage for subsequent sale in the SFC/STBTC/SB 147 ordinary mcourse aof nbusiness oor dfor muse :solely outside this Page 37 state." SECTION 10.

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 36 - e a n e d r e l u [ A d course of business or for use solely outside this state." SECTION 10.

(a) any receipts from sales of tangible h personal property handled on consignment;

g o (b) the total commissions or fees t hr g e i k derived from the business of buying, selling or promoting the h r i s purchase, sale or lease, as an agent or broker on a commission h , t, or fee basis, of any property, service, stock, bondSFC/STBTC/SB or147 ebond uor g e b l security;

ePage e38 h n d d i = = o h (c) amounts paid by members of any l ] b ,d i a º e cooperative association or similar organization for sales or r i = r t e w d leases of personal property or performance of services by such morganization; a n o d m :

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 37 - e a n e d r e l u [ A d SFC/STBTC/SB 147 organization;

(e) amounts received by a New Mexico florist from the sale of flowers, plants or other products that are customarily sold by florists where the sale is made pursuant to orders placed with the New Mexico florist that are filled and delivered outside New Mexico by an out-of-stateout-of- state florist;

and 2) the charges for mobile h telecommunications services are billed by or for a customer's u » r home service provider and are deemed provided by the home t h g e service provider.

For the purposes of this section, "home l i h r i s service provider", "mobile telecommunications services", h , e h "customer" and "place of primary use" have the SFC/STBTC/SB 147 meanings given t u g e b l in the federal Mobile Telecommunications Page 39 Sourcing Act;

and e(g) ereceipts ,collected ghby na dmarketplace dprovider iengaging =in =business oin hthe (g)state receiptsfrom collectedsales, byleases aand marketplacelicenses lof ]tangible bpersonal ,dproperty, isales aof ºlicenses rand providersales engagingof inservices businessor inlicenses thefor stateuse fromof sales,real leasesproperty ethat rare =sourced tto ethis wstate d and licensesare offacilitated tangibleby personalthe property,marketplace salesprovider on behalf of licensesmarketplace msellers, aregardless nof owhether dthe mmarketplace :sellers are engaging in business in the state;

b r e t º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 38 - e a n e d r e l u [ A d and sales of services or licenses for use of real property that are sourced to this state and are facilitated by the marketplace provider on behalf of marketplace sellers, regardless of whether the marketplace sellers are engaging in business in the state;

(b) SFCºNew [New Mexico gross receipts tax, governmental gross receipts taxtax, and leased vehicle gross receipts tax]»SFC SFCºNew Mexico gross receipts tax, governmentaland gross receipts tax SFCºand»SFC , leased vehicle gross receipts tax»SFC SFCºand cannabis excise tax»SFCtax SFCº all excise taxes imposed by the state and political subdivisions of the state»SFC payable on transactions for the reporting period;

(d) any gross receipts or sales taxes h imposed by an Indian nation, tribe or pueblo;

provided that the g o tax is approved, if approval is required by federal law or t hr g e i k regulation, by the secretary of the interior of the United h r i s States;

and provided further that the gross receipts or sales h , t, tax imposed by the Indian nation, tribe or pueblo provides a eSFC/STBTC/SB u147 g e b l e e h reciprocal exclusion for gross receipts, sales or gross nPage d40 d i = = o h receipts-based excise taxes imposed by the state or its l ] b ,d i a º e political subdivisions;

r i = r t e w d m a n o (e) any type of time-price differential;

d(f) mamounts :received solely on behalf of another in a disclosed agency capacity;

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 39 - e a n e d r e l u [ A d SFC/STBTC/SB 147 (f) amounts received solely on behalf of another in a disclosed agency capacity;

If the seller or lessor transfers the seller's or lessor's interest in any such contract to a third person, the seller or lessor shall pay the gross receipts tax upon the full sale or h leasing contract amount, excluding any type of time-price g o differential." t hr g e i k SECTION 11.

Section 7-9-14 NMSA 1978 (being Laws 1969, h r i s Chapter 144, Section 7, as amended) is amended to read:

hSFC/STBTC/SB ,147 t, "7-9-14.

EXEMPTION--COMPENSATING TAX--GOVERNMENTAL ePage u41 g e b l e e h AGENCIES--INDIANS.-- n d d i = = o h A.

Except as otherwise provided in this subsection, l ] b ,d i a º e there is exempted from the compensating tax the use of property r i = r t e w d m a n o and services by the United States or the state of New Mexico or dany mgovernmental :unit or subdivision, agency, department or instrumentality thereof.

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 40 - e a n e d r e l u [ A d any governmental unit or subdivision, agency, department or instrumentality thereof.

EXEMPTION--GROSS RECEIPTS AND COMPENSATING TAX--TAX--FUEL.--Exempted FUEL.--Exempted from the gross receipts and compensating tax are the receipts from selling and the use of gasoline, special fuel or alternative fuel on which the tax imposed by Section 7-13-3, [7-16-3 or ] 7-16A-3 or 7-16B-4 NMSA 1978 [or the h Alternative Fuel Tax Act] has been paid and not refunded." gSFC/STBTC/SB o147 SECTION 13.

Section 7-9-41.6 NMSA 1978 (being Laws 2020 tPage hr42 g e i k (1st S.S.), Chapter 4, Section 3) is amended to read:

h r i s "7-9-41.6.

EXEMPTION--GROSS RECEIPTS--CERTAIN HEALTH CARE h , t, PROVIDERS FROM CERTAIN FEDERAL [CORONAVIRUS AID, RELIEF, AND e u g e b l e e h ECONOMIC SECURITY ACT] PAYMENTS.--Exempted from the gross n d d i = = o h receipts tax are receipts of health care providers, other than l ] b ,d i a º e hospitals licensed by the department of health, from payments r i = r t e w d by:

mA. a n o d m :

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 41 - e a n e d r e l u [ A d SFC/STBTC/SB 147 A.

DEDUCTION--GROSS RECEIPTS--GOVERNMENTAL GROSS RECEIPTS--SALES TO MANUFACTURERS AND MANUFACTURING SERVICE h PROVIDERS.-- u » r A.

Receipts from selling tangible personal propertySFC/STBTC/SB t147 hproperty g e may be deducted from gross receipts or from Page 43 governmental gross l i h r i s receipts if the sale is made to a person engaged in the h , e h business of manufacturing who delivers a nontaxable transaction t u g e b l certificate to the seller or provides alternative evidence e e , gh n d d i = = o h pursuant to Section 7-9-43 NMSA 1978.

The buyer [delivering l ] b ,d i a º r the nontaxable transaction certificate] must incorporate the e r = t e w d tangible personal property as an ingredient or component part mof athe nproduct othat dthe mbuyer :is in the business of manufacturing.

b r e t º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 42 - e a n e d r e l u [ A d of the product that the buyer is in the business of manufacturing.

provided that a manufacturer or SFC/STBTC/SB 147 manufacturing service provider delivering a nontaxable transactionPage h44 transaction certificate or alternative evidence with respect to the u » r qualified equipment shall not claim an investment credit t h g e pursuant to the Investment Credit Act for that same equipment.

l i h r i s D.

The purpose of the deductions provided in this h , e h section is to encourage manufacturing businesses to locate in t u g e b l New Mexico and to reduce the tax burden, including reducing e e , gh n d d i = = o h pyramiding, on the tangible personal property that is consumed l ] b ,d i a º r in the manufacturing process and that is purchased by e r = t e w d manufacturing businesses in New Mexico.

mE. a n o d m :

b r e t º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 43 - e a n e d r e l u [ A d SFC/STBTC/SB 147 E.

SFC/STBTC/SB 147 G.

Page 45 (1) "manufacturing consumable" means tangible personal property, other than qualified equipment or an h ingredient or component part of a manufactured product, that is u » r incorporated into, destroyed, depleted or transformed in the t h g e process of manufacturing a product, including electricity, l i h r i s fuels, water, manufacturing aids and supplies, chemicals, gases h , e h and other tangibles used to manufacture a product;

t u g e b l (2) "manufacturing operation" means a plant e e , gh n d d i = = o h operated by a manufacturer or manufacturing service provider l ] b ,d i a º r that employs personnel to perform production tasks to produce e r = t e w d goods, in conjunction with machinery and equipment;

and m(3) a"qualified nequipment" omeans dmachinery, mequipment :and tools, including component, repair, replacement and spare parts thereof, that are used directly in the manufacturing process of a manufacturing operation.

b r e t º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 44 - e a n e d r e l u [ A d (3) "qualified equipment" means machinery, equipment and tools, including component, repair, replacement and spare parts thereof, that are used directly in the manufacturing process of a manufacturing operation.

DEDUCTION--GROSS RECEIPTS TAX--GOVERNMENTAL SFC/STBTC/SB 147 GROSS RECEIPTS TAX--SALES TO GOVERNMENTAL AGENCIES.-- Page 46 A.

Unless contrary to federal law, the deduction h provided by this subsection does not apply to:

g o (1) receipts from selling metalliferous t hr g e i k mineral ore;

h r i s (2) receipts from selling tangible personal h , t, property that is or will be incorporated into a metropolitan e u g e b l redevelopment project created under the Metropolitan e e h n d d i = = o h Redevelopment Code;

l(3) ]receipts bfrom ,dselling iconstruction amaterial, ºexcluding etangible (3)personal receiptsproperty, fromwhether sellingremovable constructionor rnon-removable, ithat =is ror twould ebe wclassified dfor material,depreciation excludingpurposes tangibleas personalthree-year property, whetherfive-year mproperty, aseven-year nproperty oor dten-year mproperty, :including indirect costs related to the asset basis, by Section 168 of the Internal Revenue Code of 1986, as that section may be amended or renumbered;

bor e(4) dthat sportion ºof othe treceipts nfrom =performing .225709.1AIC February 28, 2023 (7:47pm) s k m e - 45 - e a n"service" ethat dreflects rthe evalue lof utangible [ A d SFC/STBTC/SB 147 removablepersonal orproperty non-removable,utilized that is or wouldproduced bein classifiedperformance for depreciation purposes as three-year property, five-year property, seven-year property or ten-year property, including indirect costs related to the asset basis, by Section 168 of thesuch InternalPage Revenue47 Codeservice. of 1986, as that section may be amended or renumbered;

or (4) that portion of the receipts from performing a "service" that reflects the value of tangible personal property utilized or produced in performance of such service.

Receipts from selling tangible personal property, or from selling licenses to use digital goods for the purpose of loaning those digital goods to the public, for any purpose to an Indian tribe, nation or pueblo or a governmental unit, subdivision, agency, department or instrumentality thereof for use on Indian reservations or pueblo grants may be h deducted from gross receipts or from governmental gross u » r receipts.

t h g e C.

When a seller, in good faith, deducts receipts l i h r i s for tangible personal property or licenses to use digital goods h , e h for the purpose of loaning those digital goods to the public t u g e b l sold to the state or a governmental unit, subdivision, agency, e e , gh n d d i = = o h department or instrumentality thereof, after receiving written l ] b ,d i a º r assurances from the buyer's representative that the property e r = t e w d sold is not construction material, the department shall not massert in a nlater oassessment dor maudit :of the seller that the receipts are not deductible pursuant to Paragraph (3) of Subsection A of this section." SECTION 16.

b r e t º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 46 - e a n e d r e l u [ A d assert in a later assessment or audit of the seller that the receipts are not deductible pursuant to Paragraph (3) of Subsection A of this section." SECTION 16.

If on a taxable transaction taking place on SFC/STBTC/SB 147 tribal land a qualifying gross receipts, sales or similar tax Page 48 has been levied by the tribe, the amount of the tribe's tax may be credited against gross receipts tax due this state or its political subdivisions pursuant to the Gross Receipts and Compensating Tax Act and a local option gross receipts tax on the same transaction.

The amount of the credit shall be equal to the lesser of seventy-five percent of the tax imposed by the tribe on the receipts from the transaction or seventy-five percent of the revenue produced by the sum of the rate of tax imposed pursuant to the Gross Receipts and Compensating Tax Act and the total of the rates of local option gross receipts taxes h imposed on the receipts from the same transaction.

g o Notwithstanding any other provision of law to the contrary, the t hr g e i k amount of credit taken and allowed shall be applied h r i s proportionately against the amount of the gross receipts tax h , t, and local option gross receipts taxes and against the amount of e u g e b l distribution of those taxes pursuant to Section 7-1-6.1 NMSA e e h n d d i = = o h 1978.

l ] b ,d i a º e B.

A qualifying gross receipts, sales or similar r i = r t e w d tax levied by the tribe shall be limited to a tax that:

m(1) ais nsubstantially osimilar dto mthe :gross receipts tax imposed by the Gross Receipts and Compensating Tax Act;

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 47 - e a n e d r e l u [ A d SFC/STBTC/SB 147 (1) is substantially similar to the gross receipts tax imposed by the Gross Receipts and Compensating Tax Act;

[(3)SFC/STBTC/SB is147 levied(3) onprovides thea taxablecredit transactionagainst atthe atribe's ratePage not49 greatertax thanequal to the totallesser of thetwenty-five grosspercent receiptsof the tax rateimposed andby localthe optiontribe grosson the receipts from the transactions or twenty-five percent of the tax ratesrevenue imposedproduced by thisthe statesum andof itsthe politicalrate subdivisionsof locatedtax withinimposed pursuant to the exteriorGross boundariesReceipts and Compensating Tax Act and the total of the tribe;rates of the local option gross receipts taxes imposed on the receipts from the same transactions;

(4)]and (3)(4) providesis asubject credit against the tribe's tax equal to thea lessercooperative ofagreement twenty-fivebetween percent of the tax imposed by the tribe onand the receiptssecretary fromentered theinto transactions or twenty-five percent of the tax revenue produced by the sum of the rate of tax imposed pursuant to theSection Gross9-11-12.1 ReceiptsNMSA and1978 Compensating Tax Act and thein totaleffect ofat the ratestime of the localtaxable htransaction. option gross receipts taxes imposed on the receipts from the g o same transactions;

andC. t hr g e i k [(5)] (4) is subject to a cooperative h r i s agreement between the tribe and the secretary entered into h , t, pursuant to Section 9-11-12.1 NMSA 1978 and in effect at the e u g e b l e e h time of the taxable transaction.

nFor dpurposes dof ithe =tax =credit oallowed hby C.this section:

For(1) purposes"pueblo" ofmeans the taxPueblo creditof allowedAcoma, byCochiti, thisIsleta, lJemez, ]Laguna, bNambe, ,dPicuris, iPojoaque, aSandia, ºSan eFelipe, section:San Ildefonso, San Juan, Santa Ana, Santa Clara, Santo Domingo, Taos, Tesuque, Zia or Zuni or the nineteen New Mexico pueblos acting collectively;

r i = r t e w d (1) "pueblo" means the Pueblo of Acoma, m a n o d m :

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 48 - e a n e d r e l u [ A d Cochiti, Isleta, Jemez, Laguna, Nambe, Picuris, Pojoaque, Sandia, San Felipe, San Ildefonso, San Juan, Santa Ana, Santa Clara, Santo Domingo, Taos, Tesuque, Zia or Zuni or the nineteen New Mexico pueblos acting collectively;

and (3) "tribe" means a pueblo, the Jicarilla Apache Nation or the Mescalero Apache Tribe." SFC/STBTC/SB 147 SECTION 17.

Section 7-12-9.1 NMSA 1978 (being Laws Page 50 2006, Chapter 91, Section 7, as amended) is amended to read:

The department may charge a license fee of up to h one hundred dollars ($100) for each manufacturer's or g o distributor's license issued or renewed.

t hr g e i k D.

An application for a license or renewal of a h r i s license shall be submitted on a form determined by the h , t, department and shall include:

e u g e b l (1) the name and address of the applicant and:

e e h n d d i = = o h (a) if the applicant is a firm, l ] b ,d i a º e partnership or association, the name and address of each of its r i = r t e w d members;

or m(b) if the applicant is a ncorporation, othe dname mand :address of each of its officers;

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 49 - e a n e d r e l u [ A d SFC/STBTC/SB 147 (b) if the applicant is a corporation, the name and address of each of its officers;

and (3) any other information the department may SFC/STBTC/SB 147 require.

Page 51 E.

(1) the applicant [owes five hundred dollars ($500) or more in delinquent cigarette taxes] is a delinquent h taxpayer pursuant to Section 7-1-16 NMSA 1978 only with respect g o to the cigarette tax or the gross receipts tax or has unfiled t hr g e i k tax returns due with respect to the cigarette tax or the gross h r i s receipts tax;

h , t, (2) the applicant has had a manufacturer's or e u g e b l e e h distributor's license revoked by the department or any other n d d i = = o h state within the past two years;

l ] b ,d i a º e (3) the applicant is convicted of a crime r i = r t e w d related to contraband cigarettes, stolen cigarettes or mcounterfeit astamps; n o d m :

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 50 - e a n e d r e l u [ A d counterfeit stamps;

or (5) the applicant is a manufacturer and SFC/STBTC/SB 147 imports cigarettes into the United States that are in Page 52 violation of 19 U.S.C.

As used in this section, "applicant" includes a person or persons owning, directly or indirectly, in the aggregate, more than ten percent of the ownership interest in the business holding or applying for a license pursuant to the h Cigarette Tax Act." g o SECTION 18.

Section 7-14-6 NMSA 1978 (being Laws 1988, t hr g e i k Chapter 73, Section 16, as amended) is amended to read:

h r i s "7-14-6.

EXEMPTIONS FROM TAX.-- h , t, A.

A person who acquires a vehicle out of state e u g e b l thirty or more days before establishing a domicile in this e e h n d d i = = o h state is exempt from the tax if the vehicle was acquired for l ] b ,d i a º e personal use.

r i = r t e w d B.

A person applying for a certificate of title for m a nvehicle oregistered din manother :state is exempt from the tax if the person has previously registered and titled the SFC/STBTC/SB 147 vehicle in New Mexico and has owned the vehicle continuously Page 53 since that time.

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 51 - e a n e d r e l u [ A d SFC/STBTC/SB 147 a vehicle registered in another state is exempt from the tax if the person has previously registered and titled the vehicle in New Mexico and has owned the vehicle continuously since that time.

A person is exempt from the tax if the person is a bona fide resident of New Mexico who served in the armed h forces of the United States and who suffered, while serving in g o the armed forces or from a service-connected cause, the loss or t hr g e i k complete and total loss of use of:

h r i s (1) one or both legs at or above the ankle;

or h , t, (2) one or both arms at or above the wrist.

e u g e b l e e h F.

A person who acquires a vehicle for subsequent n d d i = = o h lease shall be exempt from the tax if:

l ] b ,d i a º e (1) the person does not use the vehicle in any r i = r t e w d manner other than holding it for lease or sale or leasing SFC/STBTC/SB 147 or mselling ait nin othe dordinary mcourse :of business;

bPage e54 d(2) sthe ºlease ois tfor n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 52 - e a nterm eof dmore rthan esix lmonths; u [ A d selling it in the ordinary course of business;

(2) the lease is for a term of more than six months;

and (4) the vehicle does not have a gross vehicle weight of over twenty-six thousand pounds.pounds.” SECTION 19.

[G.

From July 1, 2004 through June 30, 2009, vehicles that are gasoline-electric hybrid vehicles with a United States environmental protection agency fuel economy rating of at least twenty-seven and one-half miles per gallon are eligible for a one-time exemption from the tax at the time of the issuance of the original certificate of title for the vehicle.]" SECTION 19.

For the purpose of providing funds for the construction, maintenance, repair and reconstruction of this h state's public highways, a use fee, to be known as the "trip g o tax", is imposed [in lieu of registration fees and the weight t hr g e i k distance tax on the] on each trip made in this state by the h r i s registrant, owner or operator of a foreign-based commercial h , t, motor carrier vehicle and is in lieu of registration fees and e u g e b l the weight distance tax that would otherwise be imposed on the e e h n d d i = = o h trip on a registrant, owner or operator of any foreign-basedforeign- lbased ] b ,d i a º e commercial motor carrier vehicle that is:

r i = r t e w d (1) not registered in this state under minterstate aregistration; n o d m :

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 53 - e a n e d r e l u [ A d SFC/STBTC/SB 147 interstate registration;

(3) not subject to a valid reciprocity SFC/STBTC/SB 147 agreement;

Page 55 (4) not registered as a foreign commercial motor carrier vehicle under short-term registration;

(5) not registered under an allocation of one-one-way way rental fleet vehicles;

(1) when the gross vehicle weight or h combination gross vehicle weight exceeds twelve thousand pounds g o but does not exceed twenty-six thousand pounds, seven cents t hr g e i k ($.07) a mile for mileage to be traveled on the public highways h r i s within New Mexico, measured from the point of entering the h , t, state to the point of destination or place of leaving the e u g e b l e e h state;

n d d i = = o h (2) when the gross vehicle weight or l ] b ,d i a º e combination gross vehicle weight exceeds twenty-six thousand r i = r t e w d pounds and does not exceed fifty-four thousand pounds, twelve mcents ($.12) a nmile ofor dmileage mto :be traveled on the public highways within New Mexico, measured from the point of entering the state to the point of destination or place of leaving the state;

bSFC/STBTC/SB e147 d(3) swhen ºthe ogross tvehicle nweight =or .225709.1AICPage February56 28,combination 2023gross (7:47pm)vehicle sweight kexceeds mfifty-four ethousand -pounds 54and -does enot aexceed nseventy-two ethousand dpounds, rfifteen e l u [ A d cents ($.12)($.15) a mile for mileage to be traveled on the public highways within New Mexico, measured from the point of entering the state to the point of destination or place of leaving the state;

(3) when the gross vehicle weight or combination gross vehicle weight exceeds fifty-four thousand pounds and does not exceed seventy-two thousand pounds, fifteen cents ($.15) a mile for mileage to be traveled on the public highways within New Mexico, measured from the point of entering the state to the point of destination or place of leaving the state;

h (1) trips by a single vehicle or a fleet of g o vehicles for the purpose of:

t hr g e i k (a) custom harvesting operations;

or h r i s (b) the transportation of goods or h , t, passengers between the state and Mexico;

or e u g e b l (2) any vehicle that is unable to declare at e e h n d d i = = o h the time of entering the state the point of destination or l ] b ,d i a º e place of leaving the state.

r i = r t e w d D.

Prepaid trip permits established pursuant to mSubsection aC nof othis dsection mshall :be sold in increments of SFC/STBTC/SB 147 no less than fifty dollars ($50.00).

bAny eportion dnot sused ºPage o57 tprior nto =one .225709.1AICyear Februaryfrom 28,the 2023date (7:47pm) s k m e - 55 - e a n e d r e l u [ A d SFC/STBTC/SB 147 Subsection C of thisissuance section shall not be soldrefundable. in increments of no less than fifty dollars ($50.00).

Any portion not used prior to one year from the date of issuance shall not be refundable.

An operator of a motor vehicle registered in this state and subject to the weight distance tax shall display a weight distance tax identification permit issued for that h vehicle to an enforcement officer of the department of public u » r safety upon demand of that employee and when the vehicle passes t h g e through a port of entry.

l i h r i s B.

The department may suspend or decline to renew a h , e h weight distance tax identification permit for a motor vehicle t u g e b l if the owner or operator of the vehicle does not comply with e e , gh n d d i = = o h the provisions of the Weight Distance Tax Act or if the owner l ] b ,d i a º r or operator is a delinquent taxpayer as provided in Section e7-1-16 rNMSA =1978 tonly ewith wrespect dto 7-1-16the NMSAweight 1978distance onlytax or the gross receipts tax or if there are SFC/STBTC/SB 147 unfiled tax returns due with respect to the weight distance taxPage m58 atax nor othe dgross mreceipts :tax.

b r e t º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 56 - e a n e d r e l u [ A d or the gross receipts tax or if there are unfiled tax returns due with respect to the weight distance tax or the gross receipts tax.

The premium tax is imposed at a rate of three and three-thousandths percent of the gross premiums and membership and policy fees received or written by a taxpayer or, with respect to a taxpayer that is an h insured that procures, continues or renews insurance with a g o nonadmitted insurer, paid by the taxpayer, on insurance or t hr g e i k contracts covering risks within the state during the preceding h r i s calendar year.

The premium tax shall not be imposed on self-self-insured h , t, insured groups or on return premiums, dividends paid or e u g e b l credited to policyholders or contract holders and premiums e e h n d d i = = o h received for reinsurance on New Mexico SFC/STBTC/SB 147 risks.

lPage ]59 b ,d i a º e B.

For a taxpayer that is an insurer lawfully rorganized ipursuant =to rthe tlaws eof wthe dRepublic organizedof pursuantMexico, the premium tax shall apply solely to the lawstaxpayer's ofgross premium receipts from insurance policies issued by the Republictaxpayer in New Mexico that cover residents of Mexico,New theMexico mor aproperty nor orisks dprincipally mdomiciled :or located in New Mexico.

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 57 - e a n e d r e l u [ A d SFC/STBTC/SB 147 premium tax shall apply solely to the taxpayer's gross premium receipts from insurance policies issued by the taxpayer in New Mexico that cover residents of New Mexico or property or risks principally domiciled or located in New Mexico.

For purposes of this subsection, "gross premiums" shall include any additional h amount charged the insured, including policy fees, risk u » r purchasing group fees and inspection fees;

but "premiums" shall t h g e not include any additional amount charged the insured for l i h r i s local, state or federal taxes;

or h , e h examination fees, if any.

For a surplus SFC/STBTC/SB 147 lines policy issued to t u g e b l an insured whose home state is Page 60 New Mexico and where only a e e , gh n d d i = = o h portion of the risk is located in New Mexico, the entire l ] b ,d i a º r premium tax shall be paid in accordance with this section.

e r = t e w d E.

In addition to the premium tax, except as mprovided in Subsection F of this section, a nhealth oinsurance dpremium msurtax :is imposed at a rate of three and seventy-five hundredths percent of the gross health insurance premiums and membership and policy fees received by the taxpayer on hospital and medical expense incurred insurance or contracts;

b r e t º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 58 - e a n e d r e l u [ A d provided in Subsection F of this section, a health insurance premium surtax is imposed at a rate of three and seventy-five hundredths percent of the gross health insurance premiums and membership and policy fees received by the taxpayer on hospital and medical expense incurred insurance or contracts;

If an act of the United States congress is signed into law that imposes the annual fee on health insurance providers pursuant to Section 9010 of the federal Patient Protection and Affordable Care Act, or that imposes a substantially similar fee on the same class of taxpayers, the h rate of the health insurance premium surtax shall be decreasedSFC/STBTC/SB g147 odecreased at a rate equal to the rate of the annual fee Page 61 imposed;

provided t hr g e i k that the rate of the health insurance premium surtax shall not h r i s be less than one percent.

A reduction in the health insurance h , t, premium surtax pursuant to this subsection shall go into effect e u g e b l on the later of the effective date of the imposition of the e e h n d d i = = o h federal annual fee or ninety days after the congressional act l ] b ,d i a º e imposing the federal annual fee is signed into law.

r i = r t e w d G.

A tax is imposed at a rate of nine-tenths mpercent on the net premiums, as defined in the Group Self- Insurance Act, received or written by a nself-insured ogroup dwithin mthe :state during the preceding calendar year.

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 59 - e a n e d r e l u [ A d SFC/STBTC/SB 147 percent on the net premiums, as defined in the Group Self- Insurance Act, received or written by a self-insured group within the state during the preceding calendar year.

CREDIT--MEDICAL INSURANCE POOL ASSESSMENTS.--TheASSESSMENTS.-- The assessment for any New Mexico medical insurance pool member pursuant to Section 59A-54-10 NMSA 1978 shall be allowed as a fifty percent credit on the tax return for that member and a seventy-five percent credit on the tax return for that member for the assessments attributable to pool policyholders that receive premiums, in whole or in part, through the federal Ryan White [CARE ] Comprehensive AIDS Resources Emergency Act of 1990, the Ted R.

Montoya hemophilia program SFC/STBTC/SB 147 at the university h of New Mexico health sciences center, the Page 62 children's medical u » r services bureau of the public health division of the department t h g e of health or other program receiving state funding or l i h r i s assistance.

That portion of credit that exceeds a member's h , e h premium tax liability in the taxable period in which the credit t u g e b l is claimed shall not be refunded and shall not be carried e e , gh n d d i = = o h forward to subsequent taxable periods." l ] b ,d i a º r SECTION 23.

Section 7-42-4 NMSA 1978 (being Laws 2021 e r = t e w d (1st S.S.), Chapter 4, Section 46) is amended to read:

m"7-42-4. a n o d m :

b r e t º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 60 - e a n e d r e l u [ A d "7-42-4.

SFC/STBTC/SB 147 (3) if Paragraphs (1) and (2) of this Page 63 subsection do not apply, the location indicated by an address for the purchaser available from the business records of the cannabis retailer that are maintained in the ordinary course of h business;

provided that use of the address does not constitute g o bad faith;

t hr g e i k (4) if Paragraphs (1) through (3) of this h r i s subsection do not apply, the location for the purchaser h , t, obtained during consummation of the sale, including the address e u g e b l of a purchaser's payment instrument if no other address is e e h n d d i = = o h available;

provided that use of this address does not l ] b ,d i a º e constitute bad faith;

or r i = r t e w d (5) if Paragraphs (1) through (4) of this msubsection do not apply, including a ncircumstance oin dwhich mthe :cannabis retailer is without sufficient information to apply those standards, the location from which the cannabis product is shipped or transmitted." SECTION 24.

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 61 - e a n e d r e l u [ A d SFC/STBTC/SB 147 subsection do not apply, including a circumstance in which the cannabis retailer is without sufficient information to apply those standards, the location from which the cannabis product is shipped or transmitted." SECTION 24.

(1) commercial cannabis activity and SFC/STBTC/SB 147 licensing related to commercial cannabis activity;

Page 64 (2) the medical cannabis program, except for the medical cannabis registry;

and (3) all aspects of cannabis relating to h cannabis training and education programs.

g o B.

The division shall follow the provisions of the t hr g e i k Uniform Licensing Act when licensing or permitting the h r i s following:

h , t, (1) cannabis consumption areas;

e u g e b l e e h (2) cannabis couriers;

n d d i = = o h (3) cannabis manufacturers;

l ] b ,d i a º e (4) cannabis producer microbusinesses;

r i = r t e w d m a n o (5) cannabis producers;

d(6) mcannabis :research laboratories;

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 62 - e a n e d r e l u [ A d (6) cannabis research laboratories;

The division shall include a clear designation on all licenses and permits that indicates whether the SFC/STBTC/SB 147 license or permit is for medical cannabis activity, Page 65 commercial cannabis activity or both or for cannabis training and education programs.

h E.

A license is valid for twelve months from the g o date the license is issued and may be renewed annually, except t hr g e i k that a license issued for a cannabis training and education h r i s program is valid until terminated by the licensee or suspended h , t, or revoked by the division.

e u g e b l F.

The director shall not renew a license issued e e h n d d i = = o h pursuant to the provisions of the Cannabis Regulation Act until l ] b ,d i a º e the director receives notification from the secretary of r i = r t e w d taxation and revenue or the secretary's designee that on a mcertain adate: n o d m :

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 63 - e a n e d r e l u [ A d SFC/STBTC/SB 147 certain date:

and (2) there are no unfiled tax returns due [from engaging in business authorized by the license] with respect to the cannabis excise tax or the gross receipts SFC/STBTC/SB 147 tax.

Page 66 G.

Except for verification of age, the division shall not require licensees to request information from consumers or impose any residency requirement upon consumers h for the purchase of cannabis products pursuant to the g o commercial cannabis activity authorized by the Cannabis t hr g e i k Regulation Act.

The division may require licensees to request h r i s information from consumers for the purchase of cannabis h , t, products pursuant to the medical cannabis program, which may e u g e b l e e h include the presentation of legal identification issued by an n d d i = = o h authorized governmental entity or other documents as required l ] b ,d i a º e by the medical cannabis program.

r i = r t e w d I.

Except as otherwise provided in the Cannabis mRegulation Act, the division shall not limit the number of licensed premises a nlicensee omay doccupy mor :operate under a license.

bMultiple elicensees dmay soccupy ºa osingle tlicensed npremises, =and .225709.1AICthe Februarydivision 28,shall 2023not (7:47pm)place sany krestriction mor eprohibition -on 64the -number eof alicensees noccupying ea dsingle rlicensed epremises lor uon [the Anumber dof Regulationlicensed Act,premises theof divisiona shallSFC/STBTC/SB not147 limitcannabis theestablishment numberexcept ofas licensedotherwise premisesspecifically aPage licensee67 mayprovided occupyfor orby operatethe underCannabis aRegulation license.Act.

Multiple licensees may occupy a single licensed premises, and the division shall not place any restriction or prohibition on the number of licensees occupying a single licensed premises or on the number of licensed premises of a cannabis establishment except as otherwise specifically provided for by the Cannabis Regulation Act.

Licensees are specifically allowed to conduct other licensed activities, including activities pursuant to the h Hemp Manufacturing Act, except for sales of alcoholic g o beverages.

t hr g e i k K.

A person properly licensed and in good standing h r i s pursuant to the Lynn and Erin Compassionate Use Act on the h , t, effective date of the Cannabis Regulation Act may continue to e u g e b l operate under that license for medical cannabis until e e h n d d i = = o h comparable licenses for commercial cannabis activity are l ] b ,d i a º e available.

The division shall determine when retail sales of r i = r t e w d commercial cannabis products begin, but no later than April 1, m2022. a n o d m :

bA efacility dof ssuch ºa olicensee, tupon nissuance =of .225709.1AICthe Februaryapplicable 28,cannabis 2023establishment (7:47pm)license, sshall kconstitute mlicensed epremises -of 65the -licensee eand athe nlicensee eshall dbe rSFC/STBTC/SB e147 lentitled uto [continued Aand duninterrupted SFC/STBTC/SBoperations 147of 2022.the Page 68 licensed premises.

A facility of such a licensee, upon issuance of the applicable cannabis establishment license, shall constitute licensed premises of the licensee and the licensee shall be entitled to continued and uninterrupted operations of the licensed premises.

(1) require all cannabis establishment licensees to ensure that at least ten percent of their cannabis h in stock on a monthly basis is designated for sale to qualified u » r patients, primary caregivers and reciprocal participants;

t h g e (2) initially take reasonable measures to l i h r i s expeditiously incentivize increased production of cannabis h , e h plants to remedy a shortage of cannabis supply in the medical t u g e b l cannabis program;

e(3) eafter ,having ghfirst nexhausted dmeasures dto iincrease =production =of ocannabis hplants (3)to afteraddress havingthe firstshortage exhaustedof measurescannabis tosupply lin ]the bmedical ,dcannabis iprogram, aexclude ºcommercial rcannabis increaseactivity productionfrom the scope of cannabisnew plantslicenses issued to addressinitial theapplicants shortagefor ea rvertically =SFC/STBTC/SB t147 eintegrated wcannabis destablishment, ofcannabis producer, Page 69 integrated cannabis supplymicrobusiness, incannabis theproducer medicalmicrobusiness or cannabis program,manufacturer excludelicense, mwhich limitation shall be in force for a nperiod oof dat mleast :six months;

b r e t º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 66 - e a n e d r e l u [ A d commercial cannabis activity from the scope of new licenses issued to initial applicants for a vertically integrated cannabis establishment, cannabis producer, integrated cannabis microbusiness, cannabis producer microbusiness or cannabis manufacturer license, which limitation shall be in force for a period of at least six months;

As used in this section, "shortage of cannabis supply in the medical cannabis program" means that the average number of cannabis plants in production in the medical cannabis h program per qualified patient after the effective date of the g o Cannabis Regulation Act is substantially less than the average t hr g e i k number of cannabis plants in production in the medical cannabis h r i s program per qualified patient as of the effective date of the h , t, Cannabis Regulation Act, where:

e u g e b l (1) the average number of cannabis plants in eSFC/STBTC/SB e147 h n d d i = = o h production after the effective date of the Cannabis RegulationPage l70 ]Regulation b ,d i a º e Act is measured over a period of three consecutive months;

and r(2) ithe =average rnumber tof ecannabis wplants din (2)production as of the averageeffective numberdate of cannabisthe plantsCannabis inRegulation mAct is measured over a nperiod oof dthree mconsecutive :months immediately preceding the effective date of the Cannabis Regulation Act.

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 67 - e a n e d r e l u [ A d SFC/STBTC/SB 147 production as of the effective date of the Cannabis Regulation Act is measured over a period of three consecutive months immediately preceding the effective date of the Cannabis Regulation Act.

INSURANCE INDEPENDENTLY PROCURED--DUTY TO [REPORT ] FILE RETURNS.-- A.

Each insured who in this state procures or continues or renews insurance with a nonadmitted insurer on a risk located or to be performed in whole or in part in this h state, other than insurance procured through a surplus lines u » r licensee pursuant to Chapter 59A, Article 14 NMSA 1978 shall t h g e [within ninety days after the date such insurance was so l i h r i s procured, continued or renewed, file areturns writtenpursuant reportto of the hInsurance ,Premium eTax hAct. same with the superintendent, upon forms prescribed by the t u g e b l superintendent, showing the name and address of the insured or e e , gh n d d i = = o h insureds, name and address of the insurer, the subject of the l ] b ,d i a º r insurance, a general description of the coverage, the amount of e r = t e w d premium currently charged therefor and such additional m a n o d m :

b r e t º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 68 - e a n e d r e l u [ A d pertinent information as is reasonably requested by the superintendent] file returns pursuant to the Insurance Premium Tax Act.

If an independently procured policy covers SFC/STBTC/SB 147 risks or exposures only partially located or to be performed Page 71 in this state, the taxes, fees and penalties imposed pursuant to the Insurance Code and the Insurance Premium Tax Act shall be computed on the portion of the premium properly attributable to the risks or exposures located or to be performed in this state and reported to the secretary of taxation and revenue.

Section 61-28B-8 NMSA 1978 (being Laws 1999, h Chapter 179, Section 8, as amended) is amended to read:

g o "61-28B-8.

QUALIFICATIONS FOR A CERTIFICATE AS A t hr g e i k CERTIFIED PUBLIC ACCOUNTANT.-- h r i s A.

An applicant for a certificate shall complete h , t, the application form provided by the board and demonstrate to e u g e b l the board's satisfaction that the applicant:

e e h n d d i = = o h (1) is of good moral character and lacks a l ] b ,d i a º e history of dishonest or felonious acts;

and r i = r t e w d (2) meets the education, experience and mexamination arequirements nof othe dboard. m :

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 69 - e a n e d r e l u [ A d SFC/STBTC/SB 147 examinationB. requirements of the board.

B.The board may refuse to grant a certificate on Page 72 the ground that the applicant failed to satisfy the requirement of good moral character.

The board may refuse to grant a certificate on the ground that the applicant failed to satisfy the requirement of good moral character.

The examination for certification shall be offered continuously via a computer-based testing system at a designated testing center and shall test an applicant's knowledge of the subjects of accounting and auditing and other h related subjects as prescribed by the board.

The board shall g o prescribe the method of applying for the examination and the t hr g e i k dissemination of scores, and it shall rely on the American h r i s institute of certified public accountants for the grading of h , t, the examination.

The board may use all or any part of the e u g e b l e e h uniform certified public accountant examination services of the n d d i = = o h national association of state boards of accountancy to perform l ] b ,d i a º e administrative services with respect to the examination.

The r i = r t e w d board or its designee shall report all eligibility and score mdata ato nthe onational dcandidate mSFC/STBTC/SB :147 database, and it shall, to the extent possible, provide that Page 73 the passing scores are uniform with passing scores of other states.

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 70 - e a n e d r e l u [ A d data to the national candidate database, and it shall, to the extent possible, provide that the passing scores are uniform with passing scores of other states.

Credit for any section passed shall be valid for eighteen months from the [actual ] date the [applicant took that section ] passing score is released to the applicant, without having to attain a minimum score on any failed test section and without regard to whether the applicant has taken other test sections.

An applicant must pass all four test sections within a continuous eighteen-month period, which begins on the date that the first [section passed is taken] passing scores are released to the applicant.

h F.

An applicant shall be given credit for g o examination sections passed in another state if such credit t hr g e i k would have been given in New Mexico.

h r i s G.

The board may waive or defer requirements of h , t, this section regarding the circumstances in which sections of e u g e b l the examination must be passed, upon a showing that, by reason e e h n d d i = = o h of circumstances beyond the applicant's control, the applicantSFC/STBTC/SB l147 ]applicant b ,d i a º e was unable to meet the requirement.

rPage i74 = r t e w d H.

An applicant for initial issuance of a certified mpublic aaccountant ncertificate oshall dshow mthat :the applicant has had at least one year of experience.

b e d s º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 71 - e a n e d r e l u [ A d SFC/STBTC/SB 147 public accountant certificate shall show that the applicant has had at least one year of experience.

Laws 2007, h Chapter 204, Section 7;

Laws u » r 2011, Chapter 89, Section 1;

t h g e Laws 1998, Chapter 97, Section 3;

Laws 1994, Chapter 115, l i h r i s Section 2;

Laws 2007, Chapter h , e h 204, Section 8;

Laws 2012, t u g e b l Chapter 55, Section 2;

Laws SFC/STBTC/SB 147 1995, Chapter 89, Section 8;

Laws e e , gh n d d i = = o h 1969, Chapter 144, Section Page 75 9;

l ] b ,d i a º r Laws 2007, Chapter 45, Section 6;

Laws 2018, Chapter 62, e r = t e w d Section 1;

Laws 2010, Chapter 77, Section 1 and Laws 2010, mChapter a78, nSection o1; d m :

b r e t º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e - 72 - e a n e d r e l u [ A d Chapter 78, Section 1;

The effective date of the provisions of Sections 1 through 12 and 14 through 28 of this act is July 1, 2023.

The effective date of the provisions of Section 13 of this act is the first day of the month following the date this act takes effect.

-SFC/STBTC/SB 73147 -Page h76 u25 » r t h g e l i h r i s h , e h t u g e b l e e , gh n d d i = = o h l ] b ,d i a º r e r = t e w d m a n o d m :

b r e t º o t n = .225709.1AIC February 28, 2023 (7:47pm) s k m e e a n e d r e l u [ A d