In what could be the most memorable legislation of Michelle Lujan Grisham’s term as governor of New Mexico, she announced on Wednesday she will pursue a statewide cut in the gross receipts tax rate, the first such proposed cut in 40 years.
Speaking at an economic development conference, Lujan Grisham proposed a 0.25 percent reduction in the gross receipts tax rate as part of the legislative agenda for the upcoming 2022 session. "Big news: today I announced our plan to cut gross receipts taxes for the first time in 40 years, saving New Mexico families and businesses $145 million annually, or about $1.5 billion over 10 years," Lujan Grisham tweeted
The reduction would lower the statewide rate to 4.875%.
A release from the governor’s office said according to the Taxation and Revenue Department, the state of New Mexico had not decreased its gross receipts tax rate since 1981.
“Cutting gross receipts taxes for the first time in decades will put more money in the pockets of New Mexico families and businesses,” Grisham said in the release. “We have the tools to continue building long-lasting economic success – we just have to be bold enough to use them.”
Taxation and Revenue Cabinet Secretary Stephanie Schardin Clarke pointed out that the cut was made possible after changing what was subjected to the required gross receipts tax by now including internet sales.
“That new revenue source paves the way to lower the gross receipts tax rate for the prosperity of all New Mexicans," Clarke said.