March 13, 2023

House passes omnibus tax bill


By Robert Nott, The Santa Fe New Mexican

The House of Representatives voted 50-18 Sunday evening to approve an omnibus tax policy plan that would provide $500 and $1,000 rebate checks to taxpayers later this year. 

The amended House Bill 547 upped the amount of those rebate checks from an earlier draft that would have offered $300 to single taxpayers and $600 to married couples filing jointly. 

“We heard the public, we heard members of this body and the Senate — we should give [more] money back to the people of New Mexico,” said Rep. Derrick Lente, D-Sandia Pueblo, who introduced HB 547 on the House floor Sunday. 

That amount still falls short of the proposed rebates of $750 for single taxpayers and $1,500 for married couples filing jointly that taxpayers received last year, and which Gov. Michelle Lujan Grisham called for again in her state of the state address in January. 

Members of the Senate Finance Committee have also recommended $500 and $1,000 rebate checks in the operating budget, House Bill 2. 

The change in rebate check amounts speaks to the ever-changing tax and finance policies lawmakers — with input from the governor’s office — deal with in the final days of the legislative session.

When it comes to tax bills, most members of the public not affiliated with a business are most likely to care about the rebates, which, lawmakers have said, can make at least a one-time difference when it comes to shooing away whatever wolves might be at the door.

Otherwise, much of the original content of the bill, first introduced to the House Taxation and Revenue Committee about a week ago, remains.

HB 547 includes an increase in corporate tax deductions, a small increase to the alcohol excise tax to benefit programs addressing alcohol and drug use and a child income tax credit for up to $600 for eligible taxpayers.

It also includes a rural health care practitioner credit of up to $5,000 for some health care professionals, including doctors, and a refundable electric vehicle income tax credit of $2,500 for every electric vehicle purchased. 

In addition, HB 547, a roughly $1.2 billion package, will drop the state’s gross receipts tax by one-half of 1%.

Some House Republicans stood to support a proposed amendment by Rep. Larry Scott, R-Hobbs, that would change some of the structure of the bill and do away with a portion of the gross receipts tax known as pyramiding — a practice in which small businesses pay additional compounding taxes for a range of services like accounting, legal and payroll work.

But Democrats, who outnumber Republicans 45-25 in the House, shot the proposal down. Several said representatives from a number of cities and counties around the state previously argued against eliminating pyramiding, saying the loss in tax revenue would be devastating to their municipal budgets. 

One Democrat questioned a provision of the bill that allows for eligible taxpayers to take credits for using energy storage systems.

Rep. Patty Lundstrom, D-Gallup, told Lente she could not envision going back to her impoverished community and saying, “We got you a tax credit of 40% for the purchase of an energy storage system.”

Then she delivered the not-very-funny punchline: “Oh, I forgot, you don’t have electricity in your home.”

HB 547 now goes to the Senate for consideration.