October 28, 2003
Dems' Proposal Would Increase Taxes, Fees on Liquor, Motor Vehicles
By Barry Massey
The Associated Press
SANTA FE Taxes on beer, wine and liquor would more than double or triple, the tax on diesel would go up a nickle-a-gallon and New Mexicans would pay a third more to register their cars and trucks under a proposal by Senate Democrats.
Senate Majority Leader Manny Aragon, D-Albuquerque, and other lawmakers unveiled the wide-ranging tax measure on Tuesday during a special session of the Legislature.
The proposal would create new tax breaks for businesses sought by Gov. Bill Richardson and lower taxes on lower- and some middle-income New Mexicans. However, the measure also would increase a host of taxes and fees to provide additional money for state and local governments and help pay for highway construction.
Among its provisions:
Double or triple the tax on various alcoholic drinks. The tax on beer would increase from 41 cents a gallon to $1.48, for example. The tax on wine would increase from 45 cents a liter to $1.13.
Increase the tax on diesel or so-called special fuels to 23 cents a gallon from 18 cents.
Increase the excise tax paid on purchases of cars and trucks to 4 percent from 3 percent.
Raise by about one-third the yearly registration fees for motorcycles, cars, trucks and other motor vehicles.
Double the surcharge on rental cars and short-term leased vehicles; from $2 a day to $4 a day.
Increase a tax on oil production; the Oil and Gas Emergency School Tax rate on oil would increase to 4 percent from 3.15 percent.
Reduce taxes for lower income and some middle income New Mexicans. A current income tax rebate would be expanded and the personal exemption would be increased for lower and middle-income taxpayers.
Provide tax relief for health care providers so they don't have to pay the gross receipts tax on reimbursements from managed care companies and some Medicaid payments.
Create a new credit for companies creating "high wage" jobs.
Provide a deduction from gross receipts taxes and compensating taxes for research and development by small businesses.
Exempt new gas-electric hybrid vehicles and alternative fuel vehicles from the motor vehicle excise tax.
The Taxation and Revenue Department had not released an analysis of the 188-page tax package to determine how much money would be generated by the proposed increases.
Richardson declined comment on the measure. The governor called the special legislative session to have lawmakers consider tax changes as well as increase penalties for sex offenses and help finance his plan for road and transportation projects.
The Democratic governor has outlined a series of tax breaks and tax cuts that he wants some of them included in the Senate proposal but he has kept his distance from proposals that would raise taxes or fees.
However, the governor has said he's willing to consider an increase in the liquor tax.