Numerous Tax Reform Proposals Expected At Roundhouse
Tax reform is expected to be a hot topic when the 60 day legislative session begins next week. Many lawmakers from both sides of the aisle are already proposing changes to the current tax laws.
The Revenue and Tax Stabilization Interim Committee held half a dozen meetings last year taking an in-depth look at the gross receipts tax, the income tax and how the state funds transportation infrastructure.
Tax reform has been discussed for many years and several lawmakers say now is the time for some major reforms to make the tax structure fairer for New Mexico residents and businesses.
New House Minority Whip Republican Jason Harper of Sandoval says he wouldlike to see changeslike removing the most egregious forms of pyramiding with the Gross Receipts Tax particularly with business-to-business professional services.
“The reason why we say business-to-business is because we recognize that the service sector of our economy is growing and we still want to tax services. We don’t want to take services out of the tax base. It’s just when there is going to be a later step where they’ll be taxes collected, we’ll keep that in our tax base. But when it’s a business-to-business transaction where it’s pyramided, we’re proposing to take that out.”
Harper is also proposing sending 50% of Motor Vehicle Excise Tax to the state road fund, and 50% to local communities through the Transportation Project Fund. It has been done in the past but currently most of the MVET goes to the state general fund.
He also proposes distributing all Liquor Excise Tax revenue to state and county DWI treatment and prevention programs, drug court programs, and to the state as a match for Medicaid expenditures. Harper is also proposing to complete adoption of Single Sales Factor apportionment in the Corporate Income Tax for all industries and not just manufacturing and corporate headquarters as it is now.
The new session opens next Tuesday, January 17th at noon.