SANTA FE – A bipartisan council of legislative leaders agreed Monday to seek proposals for a new study of New Mexico’s tax base – a move aimed at guiding efforts to overhaul the tax system, officials said.
The goal is to pick a company within 30 days to do the work and have the data available by the fall.
Pam Stokes, a staff attorney for the Legislative Council Service, said the study will focus mostly on gross receipts taxes and income taxes, both personal and corporate. She described it as the first of its kind.
The study should give lawmakers better information, Stokes said, on how state revenue would change if the tax code were revised. In other words, if the state were to impose a new tax on an industry – or eliminate taxes on certain transactions – the Legislature would have a solid estimate of the financial impact.
“We’ve never done a study like this before – trying to evaluate our tax structure and figure out what the unknowns are,” Stokes said Monday.
The push to reshape New Mexico’s tax code emerged this year as a serious point of contention between Republican Gov. Susana Martinez and the Legislature, where Democrats hold majorities in both chambers.
Martinez pushed lawmakers to simplify the gross receipts tax system and make the state more friendly to businesses. Democratic legislative leaders, in turn, said they support the concept in general but don’t want to act without fully understanding how the proposed changes would affect state revenue.
In the end, a Martinez-backed proposal to overhaul the tax system failed in a House committee during last week’s special session. But the Legislature approved $400,000 in funding for a tax study.
Sen. William Sharer, a Farmington Republican who pushed for the study, said Monday that he doesn’t want policy proposals from the company that carries out the research, just information that will help lawmakers decide on their own what ideas to pursue.
“These policy discussions should be outside whatever they’re doing,” Sharer said. “This study should just give us raw data.”
The Legislative Council, a group of lawmakers who oversee operations of the Legislature itself, unanimously approved a motion Monday to request proposals from companies interested in the work.