ALBUQUERQUE, N.M. (KRQE) – A new bill, House Bill 367, would lower the Gross Receipts Tax rate statewide by a quarter of a percent. The bill would also create a tax deduction for some business-to-business services. However, it faced a lot of opposition in the committee on Friday, February 17.
House Bill 367 is estimated to give $235 million in recurring tax relief for New Mexican businesses and consumers. The tax deduction in this bill would mean less money for local and state governments.
“The new deduction is estimated to reduce general fund revenue by a range of 63 to 93 million per year and reduce local government revenue by a range of 42 to 63 million dollars per year,” said Representative of Rio Arriba, Derrick Lente. Lente presented this bill to the House Taxation and Revenue Committee for one of the sponsors, a Representative of Rio Rancho, Jason Harper.
Harper argues this bill will be beneficial for small businesses, allowing them to pay less in taxes. He also argues the Gross Receipts Tax is regressive, meaning lower-income families end up spending more of their income on taxes than wealthier ones.
While some were in support of this bill, many officials from small communities around New Mexico voiced their opposition. “I stand in opposition. I think it’s a great bill until you get to the point where it starts to take away money from our small communities,” said Jeff Carr, Mayor of Eagle Nest. Carr stated, “we have a budget of 1.9 million. 100 dollars makes a difference to us. And that’s the only issue that I have, and I wish we could maybe amend this bill or do something with it to fix that issue.”
A lobbyist for the City of Santa Fe estimates this tax decrease would cost them $5 million. The chief financial officer for the City of Albuquerque also said this change could equal an unsustainable loss of up to $37 million for the city.
The bill is backed by the governor. It was tabled in the House Taxation and Revenue Committee.
