Revised tax package making late-night surge at the Capitol

A retooled package that includes several tax breaks sought by Gov. Susana Martinez was approved by a Senate committee tonight and could move quickly as the clock ticks towards tomorrow’s adjournment.

The omnibus tax bill — it contains six pieces — would likely decrease state taxes over the next five years while increasing the tax burden on cities and counties.

Specifically, the legislation would gradually lower the state’s top-end corporate income tax rate from 7.6 percent to 5.9 percent. Martinez has proposed decreasing the rate to 4.9 percent.

In addition, the tax package would tighten the qualifications for two existing tax incentives that have cost the state more money in foregone tax revenue than originally estimated.

Here are the other three pieces:

* A provision that would change the way some big, out-of-state companies file their corporate taxes. This “combined reporting” approach would include an exemption for some “big box” retailers.

* A change to “single factor sales,” which would allow companies to base their income taxes entirely on their New Mexico sales.

* The phased-in repeal of the provision that protects cities and counties from losing gross receipts tax revenue. New Mexico began paying the “hold harmless” distributions to municipalities in 2004, when the state removed the sales tax from food and medical items.

Senate Finance Committee Chairman John Arthur Smith, D-Deming, said he has been working on the retooled tax package for the last four days.

“It’s been a collective effort,” he said.

The bill could be taken up for consideration by the full Senate at some point tonight.

Check back later for more updates.