Federal tax overhaul contributes to delay in state’s tax model

SANTA FE – The federal tax overhaul signed into law last month has contributed to the delay in establishing a new computer model to help the Legislature analyze changes to state tax law.

The model is designed to examine changes to both New Mexico’s gross receipts tax system and personal income taxes – the latter of which is heavily affected by recent federal changes, said Raúl Burciaga, director of the Legislative Council Service, which staffs the Legislature.

Ernst & Young, an international firm, has a $400,000 contract to produce the computer model and a report evaluating the strengths and weaknesses of New Mexico’s tax system.

The company provided a draft of the gross receipts tax model in December and an updated version more recently.

Burciaga said this week that developing the model has required exchanging an incredible amount of data among state agencies, legislative staff and Ernst & Young. Economists inside and outside the state government are also involved in the work.

“It’s a complex process and all parties want to ensure functionality and reliability,” Burciaga said in a written statement.

Republican Gov. Susana Martinez has made overhauling New Mexico’s tax system a priority for the session. But she and Democrats have been at odds over how much – and what – to change.

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