Legislature must fix 'devastating' consequences of House Bill 6 - Albuquerque Journal

Legislature must fix ‘devastating’ consequences of House Bill 6

As we have written and spoken about in the past, House Bill 6 was passed by the New Mexico Legislature in 2019, but it did not go into effect until 2021. The bill’s basic goal was for internet sales to be taxed by the gross-receipts tax (GRT), which was a great change in terms of providing additional financial support to local communities.

However, the bill includes a provision that has had a devastating effect on Carlsbad and Hobbs. This provision changed taxes to be levied based on destination sourcing rather than origin-based sourcing. The reason it has such a negative impact on Carlsbad and Hobbs directly is because of the energy (oil and gas) sector. For example, an office and shop may be located in Carlsbad, but all the work out of that business is performed outside the city limits. Under the new law, the tax would be paid where the work takes place, resulting in Carlsbad receiving nothing in GRT distribution.

We tried unsuccessfully at last year’s legislative session to get a bill through, but it died at the end of the 30-day session. We have been working hard all year meeting with legislators to educate them on this bill and its devastating effects on our community.

We recently completed a comprehensive review covering five years of GRT’s from Fiscal Year 2018 through projected Fiscal Year 2023. The review includes GRT taxes distributed to the city, county and state.

In FY 2018, the state of N.M. received approximately 75% of the total GRT collected for Carlsbad and Eddy County. Carlsbad received 16% and Eddy County received 9% of the total. In FY 2023, we project that the state of NM will receive 80% of the GRT collected for Carlsbad and Eddy County (a 5% increase). Carlsbad is expected to receive 8% (a reduction of half compared to the 2018 average) and Eddy County is expected to receive 12%. As you can see, Carlsbad suffered the greatest financial loss because of HB6, with the larger portion going to the state. On a yearly basis, Carlsbad is expected to lose upwards of $18 million in GRT revenue distributions, which Carlsbad relies upon to provide all essential services.

Companies that are paying gross-receipts taxes in Eddy County, but whose office is located in Carlsbad, still receive all the essential services provided by the city. Some examples are roads and road maintenance, the library, museum, water and sewer, recreational facilities, fire protection, and police protection, just to name a few.

In fact, over the past five years, Carlsbad’s share of responsibilities and costs have continued to increase – even as we are projected to receive half of the percentage of GRT allocation that we received prior to HB6.

We are not just sitting back accepting these devastating effects in Carlsbad. We are going back to the upcoming January 2023 state legislative session to attempt to resolve this problem. We hope to work with all legislators. Our staunchest allies in this struggle are Sen. Gay Kernan and Rep. Cathrynn Brown. They are working hard to revise HB6, along with Rep. Jim Townsend, Rep. Larry Scott, Sen. David Gallegos, Rep. Randy Pettigrew, and Sen. Ron Griggs.

All we are asking is that we be treated fairly. Carlsbad deserves its rightful share of gross-receipts tax revenue distributions.

Home » Opinion » Guest Columns » Legislature must fix ‘devastating’ consequences of House Bill 6

Insert Question Legislature form in Legis only stories




Albuquerque Journal and its reporters are committed to telling the stories of our community.

• Do you have a question you want someone to try to answer for you? Do you have a bright spot you want to share?
   We want to hear from you. Please email yourstory@abqjournal.com

taboola desktop

ABQjournal can get you answers in all pages

 

Questions about the Legislature?
Albuquerque Journal can get you answers
Email addresses are used solely for verification and to speed the verification process for repeat questioners.
1
Santa Fe student selected to magazine's Junior Council
Arts
Viviana Garcia-Vélez, 11, chosen out of ... Viviana Garcia-Vélez, 11, chosen out of hundreds of applicants by weekly youth news publication The Week Junior.
2
Xeric Garden Club to host lecture
Arts
The Xeric Garden Club of Albuquerque ... The Xeric Garden Club of Albuquerque will hosting Laurel Ladwig as she speaks on the topic 'Share Space with Wildlife with a Backyard Refuge.'
3
SITE Santa Fe awarded National Endowment for the Arts ...
Arts
The grant will support the upcoming ... The grant will support the upcoming exhibition, 'Going With the Flow: Art, Actions and Western Waters,' opening on April 14.
4
The nitty gritty of Roth IRA conversions
ABQnews Seeker
Roth IRAs offer many benefits over ... Roth IRAs offer many benefits over traditional IRAs. I have written previous articles, encouraging readers to build their Roth IRAs through contributions or conversions. ...
5
Laguna Pueblo starts work on affordable housing project
ABQnews Seeker
The Laguna #3 affordable housing development, ... The Laguna #3 affordable housing development, which is set to complete in mid-2024, will be able to house 20 families.
6
'More like a home' than a hospital: Presbyterian's new ...
ABQnews Seeker
Departments and floors of the $170 ... Departments and floors of the $170 million tower will be opening on a weekly basis over the next two months.
7
Los Lunas seeks more funds for I-25 project
ABQnews Seeker
The village is about $51M short ... The village is about $51M short of fully funding the $141M phase
8
New cannabis delivery service enters ABQ market
ABQnews Seeker
Priscotty made its first delivery earlier ... Priscotty made its first delivery earlier this month
9
Sandia Area Federal Credit Union names new CFO
ABQnews Seeker
The announcement was made on Tuesday The announcement was made on Tuesday