A bill that would provide rebates to tax filers in 2023 passed its first Senate committee on a 10-0 vote on Thursday.
SB 10, Additional 2021 Tax Rebates, faced no opposition in the Senate Tax, Business and Transportation Committee from the public or in committee vote. State Sen. Benny Shendo Jr., D-Jemez Pueblo, is the primary sponsor of the bill.
The bill, if enacted, would provide $750 in tax rebate to single filers and $1,500 in tax rebate to joint filers, head of household and surviving spouse filers who filed tax returns for tax year 2021. The estimated cost for the state is $1 billion for Fiscal Year 2023 and $10 million in Fiscal Year 2024. The funds are nonrecurring and would take advantage of the state’s oil and gas revenue surplus.
Shendo said the purpose of the bill is to help New Mexicans in the face of recent “inflation on gas, food, and help New Mexicans make ends meet.”
The Secretary of Taxation and Revenue Department Stephanie Schardin Clarke spoke as an expert witness and Alexandria Castillo Smith, acting deputy cabinet secretary of New Mexico Human Services Department, said “rebates are particularly important this year,” citing food price increases of 10 percent and that New Mexico as a state has a higher number of individuals receiving SNAP benefits than the national average.
Senate Majority Leader Peter Wirth D-Santa Fe, said he was “not sold yet on the dollar amount,” of the tax rebate but asked why the rebate should go to every tax filer or could the Taxation and Revenue Department “put a means basis in there.”
Clarke said the department already has a structure in place from the 2021 tax rebate and that the department could get this “tax rebate out quickly,” if the same structure is maintained. But she said another reason to have the rebate go to every filer is that “from a state fiscal perspective, New Mexicans’ income levels are fairly low.”
“If we create an income cut off, there just aren’t that many higher income filers in New Mexico,” she said, adding that it would have little effect.
Clarke said that if the bill passes in its current form, the Taxation and Revenue Department are confident they can get the rebates out within 6 to 8 weeks after the bill goes into effect.
State Sen. Craig Brandt, R-Rio Rancho, said both he and some of his constituents have not received the 2021 tax rebate. He questioned if his constituents would receive this one if the bill passes.
Clarke said that he and his constituents should have received their 2021 rebates by now and if they have not, the likely cause is an error in the filing. She recommended Brandt and his constituents call the department to check on their filings.
State Sen. Gay Kernan, R-Hobbs, asked if the Taxation and Revenue Department would need to hire more full-time employees to implement the rebates. Clarke said no and the administrative costs would mostly pay for contractual services. The Human Services Department will receive $25,000 to help “stand up the application program,” technically.
The bill is headed to the Senate Finance Committee next.