A massive tax bill passed by the New Mexican legislature with fairly bipartisan support in the last days of the New Mexico legislative session is still being mulled over by Gov. Michelle Lujan Grisham.
“This tax package reflects New Mexican values with measures to help working families make ends meet, help local businesses, and support teachers, healthcare workers, and veterans,” the bill's sponsor, State Rep. Lente, (D-Sandia Pueblo), chair of the House Taxation and Revenue Committee, said in a news release. “I am enormously proud of our House Taxation and Revenue Committee for making responsible investments while keeping a hopeful eye to the future and for taking such a transparent and bipartisan approach to creating this package.”
New Mexico House Bill 547 is an omnibus tax bill that would provide $500 and $1,000 rebate checks to taxpayers later this year. The initial bill would have given $300 to single taxpayers and $600 to married couples filing jointly. This isn’t as much as the $750 and $1,500 rebate checks given to single and married couples in 2022, which stated support for giving this year as well.
Rep. Larry Scott, R-Hobbs, proposed an amendment to the bill that would change some of the bill and get rid of part of the gross receipt tax, which would have protected small businesses some more. Others said that doing so would devastate local municipal budgets.
The final copy of the bill would include income tax cuts for all New Mexicans; reduce the capital gains tax break; flatten the corporate Income Tax to 5.9%; expands the income threshold for tax rebates; increases the Child Income Tax Credit; gives various tax support for teachers and parents; expands the Rural Healthcare Practitioner Tax Credit; creates an electric vehicle income tax credit of $2,500 for every electric vehicle purchased; creates refundable tax credits for geothermal power generation; and provides a tax exemption for military retirement pay for armed services retirees or their surviving spouses, the Albuquerque Journal reported.
Grisham reportedly hasn’t signed the omnibus tax package because she’s concerned about the long-term effects the bill could have, as New Mexico has had a lot of new money pumped into it because of the burgeoning oil and gas industry, but relying on that could lead to volatility. She urged the legislative body to scale back the bill and changes were made, such as a clause where the tax cuts will be undone if future revenue dips below a certain level and decreasing the gross receipt tax.
It is possible that if Grisham vetoes this bill, she could call for a special legislative session to pass a slimmed-down version of the bill.
The initial version of the bill was not entirely popular with conservatives, who spoke out against things such as reducing the capital gains deduction and flat corporate income tax rate. It passed the House 50-18, with seven Republicans voting for it, according to an opinion column in the Carlsbad Current Argus. Changes were later made as it went through the New Mexico Senate.