HB 547 would lower taxes, deliver rebates for all New Mexicans, provide relief for working families, and support climate goals
SANTA FE – After conference committee meetings, the House of Representatives and the Senate have now both agreed on amendments to House Bill 547. This marks the legislation’s final step in the legislature, sending it to the Governor’s desk.
Once signed into law by the Governor, HB 547 will provide relief for working families and ease the tax burden on all New Mexicans. It also increases support for drug and alcohol treatment services, advances climate goals, and increases incentives for New Mexico’s film industry to create local jobs and strengthen our economy.
“This tax package reflects New Mexican values with measures to help working families make ends meet, help local businesses, and support teachers, healthcare workers, and veterans,” said bill sponsor Rep. Derrick Lente (D-Sandia Pueblo) who chairs the House Taxation and Revenue Committee. “I am enormously proud of our House Taxation and Revenue Committee for making responsible investments while keeping a hopeful eye to the future and for taking such a transparent and bipartisan approach to creating this package.”
“Through productive conversations with colleagues across the aisle and those in the other chamber, we have built a responsible tax package that decreases the tax burden on New Mexicans and businesses across the state,” said Rep. Jason Harper (R-Rio Rancho).
The measures in the final HB 547 include:
- Cuts Personal Income Tax rates for all New Mexicans.
- Reduces the Capital Gains Tax break that overwhelmingly benefits the state’s highest earners, capping the deduction at $2,500 (with an exception for the sale of New Mexico businesses), bringing our system in-line with other states.
- Flattens the Corporate Income Tax to 5.9%, making companies contribute their fair share toward public services.
- Reduces New Mexico’s overall Gross Receipts Tax rate by 0.5% over the next 5 years
- Expands the qualifying incomes for Low-Income Comprehensive Tax Rebate to assist more families, increases the amount, and adds automatic adjustment for inflation.
- Provides tax rebates to all New Mexicans who paid state income tax in 2021, with $500 for single filers, and $1,000 for joint filers.
Support for Parents and Educators
- Increases the refundable Child Income Tax Credit for New Mexico households who need it most, providing up to $600 more per family and benefitting 350,000 children in our state, which will boost economic opportunities for parents, reduce childhood poverty, and improve outcomes for our kids.
- Doubles the tax credit for parents who adopt a child with special needs.
- Creates a new GRT deduction for childcare assistance through either a licensed childcare assistance program or a for-profit pre-kindergarten provider.
- Establishes a refundable tax credit for school supplies purchased by public school teachers.
- Expands the Rural Healthcare Practitioner Tax Credit to benefit more providers, including pharmacists, registered nurses, social workers, counselors, midwives, and therapists.
- Increases the Alcohol Excise Tax and distributes revenue to the Alcohol Harms Alleviation Fund and other programs to address drug and alcohol use in New Mexico.
Renewable Energy Incentives
- Creates refundable Electric Vehicles Tax Credits for New Mexicans who purchase electric vehicles, $2,500 per vehicle, and up to $4,000 credits for lower income families.
- Establishes large-scale and individual Energy Storage System Tax Credits.
- Creates refundable tax credits for geothermal power generation.
Veterans and Retirees
- Provides a tax exemption, without a sunset, on military retirement pay for armed services retirees or their surviving spouses, up to $10,000 for 2022, increasing to $30,000 in 2024.
The Roundhouse is open to the public for the 2023 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.