The NM House voted on a tax package changing personal income tax. How would yours change?

SANTA FE — The New Mexico House voted 48-21 to adopt a tax package that proponents say would reform the state’s tax system.

Derrick Lente, D-Sandia Pueblo, who proposed changes to the income tax bracket, said this year’s tax omnibus was written to be “unveto-able.” He later clarified the bill was insulated from line-item vetoes but could be vetoed as a whole.

Last year, Gov. Michelle Lujan Grisham struck down large portions of the tax package, including a 20% alcohol tax increase and changes to the personal income tax rates — much like the ones on the table today.

The liquor tax increase is not included in this year’s version of the tax package, but there are still standalone measures to change the tax brewing in the Roundhouse.

The Senate will also have a say on the final tax package.

Here are some of the highlights of the tax omnibus.

New income tax brackets: As a tax reform measure, the omnibus bill would create additional tax brackets and reduce taxes for the lowest-income New Mexicans.

A floor substitute proposed a flat 1% income tax for all New Mexicans, regardless of income. Proponents of the alternate version said it put money back into the pockets of New Mexicans; critics said it could force budget cuts and impact government employees such as teachers and law enforcement.

Wildfire credit: A new addition to the tax package is a credit for people whose houses were destroyed by wildfires from 2021 and 2023. The credit would cover house building costs up to $50,000. The credit comes after a lawsuit was filed against the Federal Emergency Management Agency alleging the agency has delayed the distribution of funding to people impacted by the Calf Canyon/Hermits Peak Fire.

Rural health care practitioner credit: More health care practitioners — including pharmacists, registered nurses, midwives, social workers, mental health counselors and physical therapists — who provide services in rural areas would be eligible for the rural health care practitioner credit.

Deductions for kindergarten, accessible housing: New Mexicans paying for private pre-kindergarten and child care services would be eligible for tax deductions under the tax package. People on Medicaid would be able to deduct costs of making their homes more accessible for their disabilities.

Industrial Revenue Bonds for energy storage: The bill would allow energy storage facilities to qualify for industrial revenue bonds, which offer tax benefits to companies that want to purchase or build new facilities to incentivize development.

One such company recently announced plans to build in Albuquerque. In January, Sun Lasso Energy Center announced it planned to build a battery energy storage facility in the southwest area of the city.