Three years of tax reforms add up for New Mexicans - Albuquerque Journal

Three years of tax reforms add up for New Mexicans

In a little over three years, the administration of Gov. Michelle Lujan Grisham has delivered more than $400 million in permanent tax cuts for New Mexico families and businesses, more than $1.1 billion of fiscally responsible, emergency tax relief to New Mexicans when they needed it most and made transformative investments for our future in education.

Under any metric, the tax burden on everyday New Mexicans is far lower today than when we took office. That’s especially true for middle-class and low-income families.

About 85% of New Mexico seniors will no longer pay state income tax on their Social Security benefits. And nearly 500,000 New Mexico families are already enjoying lower taxes and larger refunds because of expansions to the Working Families Tax Credit and the Low Income Comprehensive Tax Rebate. Military retirees can also now exempt some of their pension from state income tax.

Since 2019, New Mexicans have been able to claim a $4,000 deduction on their state income taxes for all but one dependent, protecting our families from damage done by 2017 federal tax changes. New Mexico families will soon also be able to claim a credit of up to $175 per child, a savings of $74 million, that will help parents pay for the day care they need so they can go to work and school.

And for the first time in 40 years, the state has cut the gross receipts tax. That’s $94 million in tax relief for all New Mexicans, with another $100 million in relief starting next July when the rate falls even further.

We’ve also stepped up to help New Mexicans when they needed it most, providing $1.1 billion of fiscally responsible, non-recurring relief through rebates in the last two years. The restaurant industry was also able to take advantage of $51 million in tax breaks during the worst of the pandemic. Desperately needed hospital nurses will receive a $1,000 refundable credit when they file their 2022 taxes.

The tax climate for businesses is also better today than it was in 2018. To fight dreaded tax pyramiding and support local business, we’ve created a new deduction for business services sold to manufacturers. The film industry knows it has a trusted partner in New Mexico, thanks in part to improvements to the structure and administration of New Mexico’s leading-edge film production tax credit.

The unfair advantage that large, out-of-state, internet sellers had over New Mexico’s local businesses ended in 2019 when remote sales became subject to the gross receipts tax. That change, along with the legalization of adult-use cannabis, has broadened and diversified our tax base.

These accomplishments together amount to the most significant improvement to our tax code in decades, making it fairer and more competitive. All the while, our property tax remains amongst the lowest in the nation. And with all of that, our fiscal house is stronger than ever. Operating reserves are at historic highs, a new endowment ensures stability for early childhood education, and all New Mexicans can obtain first-rate higher education without going into student loan debt through the newly established Opportunity Scholarship.

The tax code we are building is fairer, more effective, and protects critical services for decades to come. It is advancing families, communities and our economy today and tomorrow.

 

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