NEW MEXICO (KRQE) – A tax reform bill that is almost 70 pages long just passed the House Tax and Revenue Committee. The bill cuts down the amount taxpayers could see in cash rebates, lowers New Mexico’s Gross Receipts Tax, and offers some new tax credits worth thousands.
Originally, the governor said she wanted to see tax rebates of up to $1,500 for some tax filers. House Bill 547 puts rebates at $300 for single filers and $600 for joint filers. Representative Derrick Lente (D-Rio Arriba, Sandoval, San Juan) says the governor is not on board with this decrease. However, he says keeping the rebates at that high level would have depleted the budget.
House Bill 547 is a mammoth bill that includes: increasing the Child Income Tax credit; restructuring personal income tax rates by cutting tax breaks for the wealthy; flattening the Corporate Income Tax to make sure big companies pay their fair share toward public services; increasing the alcohol excise tax; and lowering the Gross Receipts Tax (GRT) from 5% to 4.5%, and then by another 0.25% after July 2024 to help small businesses.
“Like our state budget, our tax package reflects New Mexican values. This bill will make New Mexico’s tax code more equitable; provide relief for working families; ease the tax burdens on small businesses, veterans, and seniors; and support our efforts to combat climate change and transition justly to a clean energy future,” Lente says.
The bill creates tax credits worth thousands of dollars for buying electric vehicles and putting solar panels on your home. House Bill 547 also includes property tax exemptions for veterans and tax exemptions for Military Retirement Pay. It creates a new GRT deduction for childcare assistance and gives tax credits to rural healthcare providers.
Speaker of the House Javier Martinez says this is the most pro-business tax package he’s seen this session; however, critics disagree. “We do not need tax increases; we have an over $3 billion budget surplus, a workforce shortage, a healthcare access crisis, and we lost population last year. We need to compete for jobs, talent, and business growth. Instead, this legislation tells all of that to go elsewhere,” says Terri Cole, president and CEO of the Greater Albuquerque Chamber of Commerce.
The bill passed on a 9 to 5 vote. It will head to the House Floor Wednesday, Mar. 8.