Lawmakers are agreed that New Mexico needs comprehensive tax reform...and that's where the agreement ends. It is unlikely that they will do a complete tax overhaul during the Special Session. However, if they're going to balance the budget, the state will need to find additional revenue...which means additional taxes.
On May 17, the Albuquerque Journal reported three options are being considered:
- Pass HB 412 now, keep the tax rates high for one year and then consider lowering the rate
- Work on tax reform during the interim and address the proposal in January 2018
- Hold a 90-day study of the tax system and enact changes fall 2017
On May 19, the Albuquerque Journal reported that another suggestion to generate revenue is being considered:
- Gross receipts tax on retail sales made online
- "Some new tax liability on nonprofit hospitals. The idea would be to treat nonprofit hospitals more like their for-profit counterparts."
The Governor favors HB 412, which will impact low income New Mexicans the hardest, increasing their need for nonprofit services at the same time that it makes it harder for nonprofits to provide those services. See one page info sheet by NM Voices for Children.
A new version of HB 412 will be proposed during the Special Session; it is over 400 pages and won't be seen until Wednesday. House Speaker Brian Egolf said "that it simply isn't reasonable to pass a tax overhaul this week." The Governor has commented several times on "closing tax loopholes," which translates to nonprofits losing their state tax exempt status.
New Mexico Thrives will continue to monitor developments.