SANTA FE — One of the busiest shopping days of the year will come with its own tax break under legislation signed by Gov. Susana Martinez.
Martinez estimated the bill — co-sponsored by House Majority Whip Doreen Gallegos, D-Las Cruces, and Sen. Steven Neville, R-Aztec — will result in about $3 million in tax relief.
The legislation, House Bill 79, creates a gross receipts tax deduction for retail sales at small, local businesses on the Saturday after Thanksgiving. Supporters call it “Small Business Saturday.”
The tax break means shoppers won’t have to pay gross receipts taxes on their purchases that day, though there are restrictions.
The tax deduction is good for up to $500 in purchases at businesses that employ 10 people or fewer. New Mexico must also be the primary place of business for the store, and it can’t be a national franchise.
Clothing, jewelry, toys, sports equipment, furniture, home electronics and a variety of other retail items are eligible for the tax deduction.
Nonpartisan analysts working for the Legislative Finance Committee suggested the bill isn’t sound tax policy.
They said the proposal failed to meet any of the LFC’s 11 principles for good tax policy and effective tax breaks — such as keeping the tax base broad and vetting the measure during the interim between legislative sessions.
The tax break will be in place this year and next. It will expire after that unless lawmakers renew it.
“Since taking office, helping New Mexico families and small businesses keep more of their hard-earned money has always been one of my top priorities,” Martinez said Friday in a written statement.