New Mexico has allocated $1.1 billion in tax expenditures benefiting its residents in Fiscal Year 2025, according to the New Mexico Taxation & Revenue Department's newly released 2025 Tax Expenditure Report. These expenditures, which include credits, deductions, and exemptions, represent 48% of all tax expenditures in the state. They are designed to support families, healthcare, and economic development through the tax code rather than direct spending.
The report indicates that under Governor Lujan Grisham's administration, these measures have significantly aided families in overcoming poverty. "Taxation and Revenue is incredibly proud to release the 2025 Tax Expenditure Report, which highlights New Mexico’s commitment to improve the lives of New Mexicans," said Stephanie Schardin Clarke, Secretary of the Taxation and Revenue Department.
The largest single expenditure was a gross receipts tax (GRT) deduction on retail food sales amounting to $397 million. Following this was the Child Income Tax Credit, which provided around $139 million to parents in FY25. This credit offers up to $622 per qualifying child and was claimed by 257,526 taxpayers.
Healthcare accounted for 32% of tax expenditures at $743 million. The most significant expenditure within this category was a GRT deduction on prescription drugs, oxygen, and medical cannabis totaling $275 million.
Additional benefits from tax expenditures support economic development, specialized industries, environment conservation, and renewable energy initiatives. The report also mentions that some current expenditures will expire within five years unless renewed.
The full report is accessible on the department's website under the "Publications" section.
Information from this article can be found here.
