Liquor tax bill advances at Roundhouse after removal of local breweries, distilleries

SANTA FE — A push to deter heavy drinking in New Mexico by levying a new 6% surtax on alcohol sales was diluted Monday by a House committee, which then narrowly voted narrowly to advance the bill.

Amid pleas from retailers, the House Taxation and Revenue Committee voted to exempt local breweries, wine-growers and distilleries from the proposed tax increase.

But an attempt to also exempt restaurants failed on a tie vote, before the committee voted 6-4 to advance the legislation, House Bill 417, to the House floor.

The Monday hearing featured stirring testimony from both opponents and supporters of the proposed tax hike during a hearing that stretched for nearly four hours.

Jennie Wei, a doctor at the Gallup Indian Medical Center and leader of a local alcohol task force, told legislators about treating patients in their 20s who were dying of alcohol-related illnesses.

“We’re facing a public health emergency here in New Mexico and I’m not talking about a new deadly virus — this is one we’ve been fighting for decades,” Wei said.

But Carol Wight of the New Mexico Restaurant Association said the bill would hurt local eateries, while arguing the state should not impose tax increases at the time of a revenue surplus.

“This tax would significantly burden our industry,” Wight said.

The measure debated Monday marks New Mexico lawmakers’ latest attempt to adjust the state’s liquor tax rates in an attempt to curb problem drinking.

In addition to the proposed 6% surtax on alcohol sales, the legislation would change how New Mexico distributes the liquor tax revenue it collects.

Instead of some of that money flowing into the state’s general fund, it would be split between a local alcohol treatment fund and a new tribal prevention fund.

New Mexico’s total number of alcohol-related deaths recently declined for two consecutive years, falling from 2,274 such deaths in 2021 to 1,896 alcohol-related deaths in 2023, according to state Department of Health data.

However, New Mexico still had the nation’s highest per capita rate of alcohol-related deaths in 2022, with 42.7 deaths per 100,000 people, per Kaiser Family Foundation data. Hawaii and New Jersey had the nation’s lowest rates.

New Mexico Taxation and Revenue Secretary Stephanie Schardin Clarke said it would likely take the agency until January 2026 — if not longer — to implement the tax changes if approved.