HB 213 — LIQUOR TAXES & DEFINITIONS

en td 17d i = = o h (d) any gross receipts or sales taxes w l n] db 18,d i a º e imposed by an Indian nation, tribe or pueblo;

provided that the =r i = 19r t e w d m a ln o tax is approved, if approval is required by federal law or id a e r 20 regulation, by the secretary of the interior of the United a t m m: 21 States;

andb providede further that the gross receipts or sales d rs eº 22o taxt imposedn by= the.227168.5AIC IndianFebruary nation,5, tribe2024 or(8:14pm) pueblo provides a c e s k 23m reciprocale exclusion- for5 gross- receipts,e salesa orn gross e ad nr be 24l receipts-basedu excise[ taxesA imposedd regulation, by the statesecretary orof itsthe uinterior [of politicalthe subdivisions;United States;

.227168.5and -provided 5further -that (e)the anygross typereceipts ofor time-pricesales differential;tax imposed by the Indian nation, tribe or pueblo provides a reciprocal exclusion for gross receipts, sales or gross receipts-based excise taxes imposed by the state or its political subdivisions;

(e) any type of time-price differential;

When the sale of property or service is made under any type of charge, conditional or time-sales contract or h the leasing of property is made under a leasing contract, the u » r seller or lessor may elect to treat all receipts, excluding any t h g e l i type of time-price differential, under such contracts as gross h r i s receipts as and when the payments are actually received.

If h , e h the seller or lessor transfers the seller's or lessor's t u g e b l e e , gh interest in any such contract to a third person, the seller or en td 17d i = = o h lessor shall pay the gross receipts tax upon the full sale or w l n] db 18,d i a º r leasing contract amount, excluding any type of time-price =e r = 19t ae lw differential."d im a en ro 20differential." SECTIONd 3.m :

Sectionb 7-17-2r NMSAe 1978t (beingº Lawso 1966,t an t= m.227168.5AIC February 5, 2024 (8:14pm) s k m 21e Chapter- 49,6 Section- 2,e asa amended)n ise amendedd tor read:e l u [ A d SECTION 3.

dSection r7-17-2 eNMSA 221978 "7-17-2.(being Laws 1966, Chapter 49, Section 2, as amended) is amended to read:

DEFINITIONS.--As"7-17-2. used in the Liquor Excise Tax c e s k 23 Act:

eDEFINITIONS.--As aused nin bthe 24Liquor A.Excise Tax Act:

"alcoholicA. beverages" means distilled or u [ rectified spirits, potable alcohol, brandy, whiskey, rum, gin, .227168.5 - 6 - aromatic bitters or any similar beverage, including blended or fermented beverages, dilutions or mixtures of one or more of the foregoing containing more than one-half of one percent alcohol by volume, but "alcoholic beverages" does not include medicinal bitters;

"alcoholic beverages" means distilled or rectified spirits, potable alcohol, brandy, whiskey, rum, gin, aromatic bitters or any similar beverage, including blended or fermented beverages, dilutions or mixtures of one or more of the foregoing containing more than one-half of one percent alcohol by volume, but "alcoholic beverages" does not include medicinal bitters;

"beer" means an alcoholic beverage obtained by the fermentation of any infusion or decoction of barley, malt and hops or other cereals in water and includes porter, h beer, ale and stout;

g o t hr [C.] D.

"cider" means an alcoholic beverage made g e i k from the normal alcoholic fermentation of the juice of sound, h r i s ripe apples or pears that contains not less than one-half of h , t, one percent of alcohol by volume and not more than eight and e u g e b l e e h one-half percent of alcohol by volume;

en td 17d i = = o h [D.] E.

"department" means the taxation and revenue w l n] db 18,d i a º e department, the secretary of taxation and revenue or any =r i = 19r t e w d m a ln o employee of the department exercising authority lawfully id am e: r 20 delegated to that employee by the secretary;

ab e d s º o t mn = .227168.5AIC February 5, 2024 (8:14pm) s k m 21e [E.- 7 - e a n e d r e l u [ A d delegated to that employee by the secretary;

"fortified[E. wine" means wine containing more d r e 22 than fourteen percent alcohol by volume when bottled or c e s k 23 packaged by the manufacturer, but "fortified wine" does not e a n b 24 include:

u"fortified [wine" (1)means wine thatcontaining ismore sealedthan orfourteen cappedpercent alcohol by corkvolume .227168.5when -bottled 7or -packaged closureby andthe agedmanufacturer, twobut years"fortified orwine" more;does not include:

(1) wine that is sealed or capped by cork closure and aged two years or more;

"person" includes, to the extent permitted by law, a federal, state or other governmental unit or subdivision h or an agency, department, institution or instrumentality g o t hr thereof;

g e i k H.

"retailer" means a person having a place of h r i s business in New Mexico who sells, offers for sale or possesses h , t, for the purpose of selling alcoholic beverages in New Mexico;

e u g e b l e e h [H.] I.

"small winegrower" means a winegrower who en td 17d i = = o h produces less than one million five hundred thousand liters of w l n] db 18,d i a º e wine in a year;

=r i = 19r t e w d m a ln [I.]o J.[I.

"spirituous] liquors"J. means alcoholic i a e r 20 beverages, except fermented beverages such as wine, beer, cider a t m m 21 and ale;

d"spirituous rliquors" emeans 22alcoholic [J.d m :

"wholesaler"b meanse ad persons holdingº ao licenset cn e= s.227168.5AIC kFebruary 235, issued2024 under(8:14pm) Sections 60-6A-1k NMSAm 1978e or- a8 person- selling e a n be 24d alcoholicr beveragese thatl were not purchased from a person u [ holdingA ad licensebeverages, issuedexcept underfermented Sectionbeverages 60-6A-1such NMSAas 1978;]wine, .227168.5beer, -cider 8and -ale; K.

[J.

"wholesaler" means a person holding a license issued under Section 60-6A-1 NMSA 1978 or a person selling alcoholic beverages that were not purchased from a person holding a license issued under Section 60-6A-1 NMSA 1978;] K.

IMPOSITION AND RATE OF LIQUOR EXCISE TAX-- h EXEMPTION.-- g o t hr A.

There is imposed on a [wholesaler][wholesaler ] retailer who g e i k sells alcoholic beverages on which the tax imposed by this h r i s section has not been paid an excise tax, to be referred to as h , t, the "liquor excise tax", at the following rates [on][on ] of the e u g e b l e e h price paid for alcoholic beverages sold by the retailer:

en td 17d i = = o h [(1) on spirituous liquors, except as provided w l n] db 18,d i a º e in Paragraph (9) of this subsection, one dollar sixty cents =r i = 19r t e w d m a ln o ($1.60) per liter;

id a e r 20 (2) on beer, except as provided in a t m m: 21 Paragraph (5) of this subsection, forty-one cents ($.41) per d r e 22 gallon;

cb e d s kº 23o (3)t onn wine,= except.227168.5AIC asFebruary provided5, in2024 Paragraphs(8:14pm) s k m e - 9 - e a n be 24d (4)r ande (6)l u [ A d (2) on beer, except as provided in Paragraph (5) of this subsection, forty-fiveforty-one cents ($.45)($.41) per ugallon; [ liter;

.227168.5(3) -on 9wine, -except as provided in Paragraphs (4) onand fortified(6) wine,of onethis dollarsubsection, fiftyforty-five cents ($1.50)($.45) per liter;

(4) on fortified wine, one dollar fifty cents ($1.50) per liter;

h (6) on wine manufactured or produced by a u » r small winegrower and sold in this state, provided that proof is t h g e l i furnished to the department that the wine was manufactured or h r i s produced by a small winegrower:

h , e h (a) ten cents ($.10) per liter on the t u g e b l e e , gh first eighty thousand liters sold;

en td 17d i = = o h (b) twenty cents ($.20) per liter on w l n] db 18,d i a º r each liter sold over eighty thousand liters but not over nine =e r = 19t e w d m a ln o hundred fifty thousand liters;

and id a e r 20 (c) thirty cents ($.30) per liter on a t m m: 21 each liter sold over nine hundred fifty thousand liters but not d r e 22 over one million five hundred thousand liters;

cb r e st kº 23o (7)t onn cider,= except.227168.5AIC asFebruary provided5, in2024 Paragraph(8:14pm) s k m e - 10 - e a n be 24d (8)r ofe thisl subsection,u forty-one[ A d (c) thirty cents ($.41)($.30) per gallon;liter on each liter sold over nine hundred fifty thousand liters but not over one million five hundred thousand liters;

u(7) [ (8) on cidercider, manufacturedexcept oras producedprovided byin aParagraph .227168.5(8) -of 10 - small winegrower and sold in this state,subsection, provided that proof is furnished to the department that the cider was manufactured or produced by a small winegrower, eight cents ($.08) per gallon on the first thirty thousand barrels sold, twenty-eight cents ($.28) per gallon for all barrels sold over thirty thousand barrels but less than sixty thousand barrels and forty-one cents ($.41) per gallongallon; for sixty thousand or more barrels sold;

and(8) (9) on spirituouscider liquors manufactured or produced by a craftsmall distillerwinegrower licensedand pursuantsold toin Sectionthis 60-6A-6.1state, NMSA 1978, provided that proof is providedfurnished to the department that the spirituouscider liquorswas were manufactured or produced by a craftsmall distiller,winegrower, for products up to ten percent alcohol by volume, eight cents ($.08) per litergallon foron the first twothirty hundred fifty thousand litersbarrels soldsold, and twenty-eight cents ($.28) per litergallon for theall nextbarrels two hundred fifty thousand liters e t 17 sold and for products over tenthirty percentthousand alcoholbarrels bybut volume,less wthan lsixty n d 18 thirty-two cents ($.32) per liter on the first one hundred = = 19 a l seventy-five thousand litersbarrels sold and sixty-fiveforty-one cents ($.65)($.41) i a e r 20 per litergallon onfor thesixty nextthousand twoor hundredmore thousandbarrels literssold; sold.

and (9) on spirituous liquors manufactured or produced by a craft distiller licensed pursuant to Section h 60-6A-6.1 NMSA 1978, provided that proof is provided to the u » r department that the spirituous liquors were manufactured or t mh g e l i produced by a craft distiller, for products up to ten percent h r i s alcohol by volume, eight cents ($.08) per liter for the first h , e h two hundred fifty thousand liters sold and twenty-eight cents t u g e b l e e , gh ($.28) per liter for the next two hundred fifty thousand liters n d d i = = o h sold and for products over ten percent alcohol by volume, l ] b ,d i a º r thirty-two cents ($.32) per liter on the first one hundred e r = t e w d m 21a B.n o seventy-five thousand liters sold and sixty-five cents ($.65) d m :

Theb volume of wine transferred from one d r e 22t winegrowerº too anothert winegrowern for= processing,.227168.5AIC bottlingFebruary or5, c2024 e(8:14pm) s k 23m storagee and- subsequent11 return- to the transferor shall be e a n be 24d excludedr pursuante tol Sectionu 7-17-6[ NMSAA 1978d fromper theliter taxableon uthe [next volumetwo ofhundred winethousand ofliters thesold. transferee.

Wine transferred from an .227168.5 - 11 - initial winegrower to a second winegrower remains a tax liability of the transferor, provided that if the wine is transferred to the transferee for the transferee's use or for resale, the transferee then assumes the liability for the tax due pursuant to this section.

C.

A transfer of wine from a winegrower to a wholesaler for distribution of the wine transfers the liability for payment of the liquor excise tax to the wholesaler upon the sale of the wine by the wholesaler.] (1) on each serving of spirituous liquors, four percent;

(2) on each serving of wine, three percent;

and (3) on each serving of beer or cider, two percent.

The liquorvolume exciseof taxwine shalltransferred notfrom one winegrower to another winegrower for processing, bottling or storage and subsequent return to the transferor shall be imposedexcluded onpursuant eto tSection 177-17-6 alcoholicNMSA beverages1978 soldfrom bythe ataxable retailervolume if:of wine of the transferee.

wWine ltransferred nfrom dan 18initial (1)winegrower theto retailera issecond awinegrower microbrewer,remains a smalltax =liability =of 19the atransferor, lprovided winegrowerthat if the wine is transferred to the transferee for the transferee's use or afor craftresale, distillerthe licensedtransferee pursuantthen toassumes Sectionthe iliability afor ethe rtax 20due 60-6A-6.1pursuant NMSAto 1978;this section.

aC. t m m 21 (2) the alcoholic beverage is manufactured or d r e 22 produced by the retailer;

andA ctransfer eof swine kfrom 23a (3)winegrower to a wholesaler for distribution of the alcoholicwine beveragetransfers isthe soldliability onfor payment of the eliquor aexcise ntax bto 24the retailer'swholesaler premises."upon uthe [sale SECTIONof 5.the wine by the wholesaler.] (1) on each serving of spirituous liquors, h four percent;

[NEWg MATERIAL]o ALCOHOLt ANDhr SUBSTANCE(2) USEon HARMSeach .227168.5serving -of 12wine, -three ALLEVIATIONpercent; FUND.-- A.

g e i k and h r i s (3) on each serving of beer or cider, two h , t, percent.

e u g e b l e e h B.

The liquor excise tax shall not be imposed on n d d i = = o h alcoholic beverages sold by a retailer if:

l ] b ,d i a º e (1) the retailer is a microbrewer, a small r i = r t e w d m a n o winegrower or a craft distiller licensed pursuant to Section d m :

b e d s º o t n = .227168.5AIC February 5, 2024 (8:14pm) s k m e - 12 - e a n e d r e l u [ A d 60-6A-6.1 NMSA 1978;

(2) the alcoholic beverage is manufactured or produced by the retailer;

and (3) the alcoholic beverage is sold on the retailer's premises." SECTION 5.

[NEW MATERIAL ] ALCOHOL AND SUBSTANCE USE HARMS ALLEVIATION FUND.-- A.

The department of finance and administration shall administer the fund, and money in the fund HHHCº is subject to appropriation by the legislature for alcohol and substance use harms prevention, treatment and recovery services to individuals throughout New Mexico, including on h lands of Indian nations, tribes and pueblos.pueblos.»HHHC HHHCºmay be g o t hr expended only as provided in this section.

g e i k B.

MoneyFifty percent of money in the fund shallis besubject expendedto h r i s appropriation by warrantthe oflegislature to support, and match federal h , t, e u g funds for, the secretarystate medicaid program for the purpose of financee b l e e h providing alcohol and administrationsubstance pursuantuse harms prevention, treatment n d d i = = o h and recovery services to vouchersindividuals signedthroughout byNew theMexico, secretaryl or] theb secretary's,d authorizedi representative.a º e r i = r including on lands of Indian nations, tribes and pueblos;

t e w d m a n o provided that, for fiscal year 2027, five hundred thousand d m :

b e d s º o t n = .227168.5AIC February 5, 2024 (8:14pm) s k m e - 13 - e a n e d r e l u [ A d dollars ($500,000) is appropriated to the Indian affairs department for expenditure in fiscal years 2027 through 2032 to contract for services with an entity with expertise in equity- based research to study the effects of tax policy on alcohol and substance use across demographics in New Mexico, including race, gender, sexuality, age and socioeconomic background.

The department shall report its progress to the appropriate interim legislative committees by November 1 of 2028 through 2031 and its final findings by November 1, 2032.

C.

Forty percent of money in the fund is appropriated to the local government division of the department of finance and administration to make annual distributions to counties based on the ten-year average of alcohol-related injuries and deaths in each county.

The division shall determine the amount of each distribution as of the end of each fiscal year and shall make the distributions on or before h November 1 of each year.

Any unexpended or unencumbered u » r t h balance of a distribution to a county shall not revert to any g e l i fund.

h r i s D.

Ten percent of money in the fund is appropriated h , e h t u g to the Indian affairs department to make annual distributions e b l e e , gh to municipalities, counties and Indian nations, tribes and n d d i = = o h l ] b ,d pueblos for culturally relevant alcohol and substance use i a º r e r = disorder services and programs for Native American populations t e w d m a n o d m :

b r e t º o t n = .227168.5AIC February 5, 2024 (8:14pm) s k m e - 14 - e a n e d r e l u [ A d in New Mexico.

The department shall determine the amount of each distribution as of the end of each fiscal year and shall make the distributions on or before November 1 of each year.»HHHC HHHCºB.»HHHC HHHCºE.»HHHC Money in the fund shall be expended by warrant of the secretary of finance and administration pursuant to vouchers signed by the secretary or the secretary's authorized representative.

TEMPORARY PROVISION--TRANSFER OF FUNDS.--Any e t 17 unexpended and unencumbered balance in the local DWI grant fund w l n d 18 shall be transferred to the alcohol and substance use harms = = 19 a l alleviation fund.

i a e r 20 SECTION 7.

REPEAL.--Sections 7-17-6, 7-17-9, 7-17-11 and a t m m 21 11-6A-1 through 11-6A-6 NMSA 1978 (being Laws 1984, Chapter 85, d r e 22 Section 4, Laws 1966, Chapter 49, Section 7, Laws 1969, Chapter c e s k 23 80, Section 1, Laws 1993, Chapter 65, Sections 1 through 5 and eh a n b 24 Laws 1997, Chapter 182, Section 2, as amended) are repealed.

u [» r SECTION 8.

EFFECTIVE DATE.--The effective date of the .227168.5t -h 13g -e l ik provisions of this act is July 1, 2025.

h r i ts - 1415 - 4h 6, 8e 10h 12t 14u 16g e tb 17l we le , gh n d 18d i = = 19o ah l i] ab e,d ri 20 a tº m m 21 d r e 22r c= t e sw kd 23m e a n bo 24d um [: .227168.5

b r e t º o t n = .227168.5AIC February 5, 2024 (8:14pm) s k m e e a n e d r e l u [ A d