SANTA FE – New Mexico reduced corporate income tax rates as part of a 2013 package of tax cuts.
But state lawmakers may revisit the topic as part of a new tax study underway this year.
A panel of legislative leaders on Monday approved up to $30,000 that would be available if a state consultant, Ernst & Young, is willing to add corporate income taxes to the analysis it’s doing.
“I think it’s integral to the whole study,” state Sen. Carlos Cisneros, D-Questa, said. “Without it, questions are going to linger.”
No particular proposal for changing corporate income taxes emerged Monday, though several lawmakers said they’d like the system evaluated as part of the study.
Ernst & Young, one of the largest professional services firms in the world, was hired earlier this month to evaluate New Mexico’s complex system of gross receipts and personal income taxes. The firm has a $400,000 contract, with its final report expected in December.
The company’s work will include developing a model that allows legislators to analyze the impact on revenue if they change tax rates, close exemptions or make other changes to the tax code.
The Legislative Council, a bipartisan group that includes the House speaker, Senate president pro tem and other leaders, voted overwhelmingly Monday to authorize an extra $30,000 for Ernst & Young if the company adds corporate incomes taxes to its analysis.
But lawmakers also said they didn’t want to hold up the firm’s work and it isn’t clear whether the firm will do the extra analysis for $30,000. That was just an estimate suggested by a staff member.
Gov. Susana Martinez, a Republican, has pushed repeatedly to simplify New Mexico’s gross receipts tax system as a way to improve the business environment. But proposals crafted by Rep. Jason Harper, R-Rio Rancho, failed to make it out of the Legislature during this year’s regular and special sessions.
Senate Minority Leader Stuart Ingle, R-Portales, was the lone “no” vote toward authorizing the extra money. The confidentiality rules, he said, surrounding corporate income taxes would make it difficult for the consultant to develop an accurate report.
The 2013 tax package, passed in the final minutes of that year’s legislative session, called for the state’s top corporate income tax rate to drop from 7.6 percent to 5.9 percent over a five-year period.