SB 425 — DEPT. OF DEFENSE SATELLITE GROSS RECEIPTS

SENATEAN BILLACT 425RELATING 54THTO LEGISLATURETAXATION; - STATEOFNEWMEXICO- FIRST SESSION, 2019 INTRODUCED BY George K.

MunozEXTENDING 6THE 8GROSS 10RECEIPTS ANTAX ACTDEDUCTION RELATINGFOR CERTAIN RECEIPTS DERIVED FROM THE SALE OF GOODS AND SERVICES TO TAXATION;THE UNITED STATES DEPARTMENT OF DEFENSE RELATED TO DIRECTED ENERGY OR SATELLITES.

EXTENDING7 THEBE GROSSIT RECEIPTSENACTED TAXBY DEDUCTION FOR CERTAIN RECEIPTS DERIVED FROM THE SALELEGISLATURE OF GOODS AND SERVICES TO THE UNITEDSTATE STATES DEPARTMENT OF DEFENSENEW RELATEDMEXICO: 14 TO DIRECTED ENERGY OR SATELLITES.

16SECTION BE1. IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

eSection t7-9-115 17NMSA SECTION1978 1.(being Laws 2015 (1st S.S.), Chapter 2, Section 9) is amended to read:

Section"7-9-115. 7-9-115 NMSA 1978 (being Laws 2015 w l n d 18 (1st S.S.), Chapter 2, Section 9) is amended to read:

=DEDUCTION--GROSS =RECEIPTS 19TAX--GOODS "7-9-115.AND SERVICES FOR THE DEPARTMENT OF DEFENSE RELATED TO DIRECTED ENERGY AND SATELLITES.-- A.

DEDUCTION--GROSSPrior RECEIPTSto TAX--GOODSJanuary AND1, a2031, lreceipts ifrom the sale by a equalified rcontractor 20of SERVICESqualified FORresearch THEand DEPARTMENTdevelopment OFservices DEFENSEand RELATEDqualified TOdirected DIRECTEDenergy aand tsatellite-related minputs mmay 21be ENERGYdeducted ANDfrom SATELLITES.--gross dreceipts rwhen esold 22pursuant A.to a contract with the United States department of defense.

Prior to January 1, [2021 ] 2031, receipts from c e s k 23 the sale by a qualified contractor of qualified research and e a n b 24 development services and qualified directed energy and u [ satellite-related inputs may be deducted from gross receipts .213008.1 when sold pursuant to a contract with the United States department of defense.

A taxpayer allowed a deduction pursuant to this SB 425 Page 1 section shall report the amount of the deduction separately in a manner required by the department.

e e 17 Beginning in 2017 and each year thereafter that the deduction e e n d 18 is in effect, the department and the economic development = = l ] 19 department shall present the annual report to the revenue a l r i 20 stabilization and tax policy committee and the legislative t e a t finance committee with an analysis of the effectiveness and m m 21 e d r e 22 cost of the deduction and whether the deduction is performing c e r c 23 the purpose for which it was created.

e a n b 24 E.

u [ (1) "directed energy" means a system, .213008.1 - 2 - including related services, that enables the use of the frequency spectrum, including radio waves, light and x-rays;

SB 425 Page 2 (3) "qualified contractor" means a person other than an organization designated as a national laboratory by act of congress or an operator of national laboratory facilities in New Mexico;

(4) "qualified directed energy and satellite-satellite-related related inputs" means inputs supplied to the department of e e 17 defense pursuant to a contract with that department entered e e n d 18 into on or after January 1, 2016;

= = l ] 19 (5) "qualified research and development a l r i 20 services" means research and development services related to t e a t directed energy or satellites provided to the department of m m 21 e d r e 22 defense pursuant to a contract with that department entered c e r c 23 into on or after January 1, 2016;

and e a n b 24 (6) "satellite" means composite systems u [ assembled and packaged for use in space, including launch .213008.1 - 3 - vehicles and related products and services." SECTION 2.

-SB 4425 -Page 63 825 10 12 14 16 e e 17 e e n d 18 = = l ] 19 a l r i 20 t e a t m m 21 e d r e 22 c e r c 23 e a n b 24 u [ .213008.1