House Approves Robust Bipartisan Tax Package
Tax reforms would support local businesses, rural health care providers, and climate goals,
while providing relief to working families and wildfire victims
Santa Fe, N.M. - Today, the House of Representatives passed House Bill 252, the omnibus tax package, with a bipartisan vote of 48-21. The tax package now heads to the Senate.
House Bill 252 would make New Mexico’s tax code more equitable, expand incentives for rural healthcare providers, support local businesses and childcare providers, advance the state’s climate goals, and provide relief to families impacted by wildfires.
“Our tax package is designed to create greater benefits and opportunities for all New Mexicans, especially our working families and small businesses,” said bill sponsor Rep. Derrick Lente (D-Sandia Pueblo), who also serves as Chair of the House Taxation and Revenue Committee. “House Bill 252 also prioritizes our state’s values, with measures that will improve access to healthcare and childcare, support clean energy, and provide support for our friends and neighbors who need it most.”
“In New Mexico, our childcare providers are primarily local businesses that are often owned by women of color,” said Representative Micaela Lara Cadena (D-Mesilla), Vice Chair of the House Taxation and Revenue Committee and co-sponsor of the bill. “Reducing Gross Receipts Tax (GRT) for the folks who care for our littlest ones is good for New Mexico’s working families and our economy.”
“This is a smart, targeted package of reforms that will help us establish a fairer, more progressive tax code, while also spurring economic growth,” said Rep. Christine Chandler (D-Los Alamos). “By reducing taxes on our working families and capping deductions for our highest earners, we can establish a system that is both more equitable and more effective.”
“This bill contains many reforms that are vital to moving New Mexico forward and support the backbone of our economy: our local, small businesses,” said Rep. Jason Harper (R-Rio Rancho). “These reforms encourage those small businesses to grow, while also encouraging more companies to set up shop in New Mexico.”
The measures in House Bill 252 include:
Tax Equity
Brings needed reform to New Mexico’s personal income tax system, decreasing income taxes for all taxpayers, with the greatest cuts for the lowest earners.
Reduces the Capital Gains Tax break that overwhelmingly benefits the state’s highest earners, capping the deduction at $2,500, and brings our system in line with other states.
Healthcare & Childcare
Expands the Rural Healthcare Practitioner Tax Credit to additional health professionals, including those working part-time in underserved rural areas - which would more than double the number of qualifying providers and help recruit practitioners to in-need communities.
Provides a GRT deduction to healthcare providers who facilitate necessary home renovations for those on Medicaid, such as wheelchair ramps and shower bars.
Creates a GRT deduction for licensed childcare and pre-K providers, who currently operate at a deficit, due to the 8-9% GRT charged to them for children receiving state assistance.
Business & Economic Development
Flattens New Mexico’s corporate income tax rate at 5.9%, for businesses with incomes less than $500,000, this would amount to only an estimated $500 more per year.
Applies a single-sales factor apportionment for business income based on the percent of a company’s sales that take place in the state, reducing taxes for New Mexico-based businesses, while ensuring that out-of-state companies pay their fair share.
Extends the qualification deadline for Angel Investment Tax Credits from 2025 to 2030, to encourage investment in New Mexico businesses and provide local businesses with needed startup capital.
Exempts the sale of New Mexico businesses from the proposed capital gains cap, to protect those who invest in local businesses.
Environment
Gives municipalities and counties authority to negotiate Industrial Revenue Bonds (IRB) for energy storage facilities, as they are able to for solar and wind production projects and renewable energy transmission facilities.
Provides a GRT deduction for sales of energy storage equipment to local governments.
Establishes a Fire Recovery Income Tax Credit of up to $50,000, for New Mexicans whose homes were destroyed in recent wildfires.
The Roundhouse is open to the public for the 2024 session. Members of the public can also view floor sessions and committee meetings on the New Mexico Legislature’s Webcasts tab, and provide comment via phone or Zoom as directed on the daily schedule.
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