The House approved a tax omnibus bill, HB 252, on a 48-to-21 vote on Wednesday.
The bill is similar to the 2023 tax omnibus that legislators said was gutted by line-item vetoes from Gov. Michelle Lujan Grisham.
Bill sponsor Rep. Derrick Lente, D-Sandia Pueblo, said the bill could not be line-item vetoed because it did not include tax rebates.
“If you recall, last year’s bill was vetoed by the governor… and kept a lot of initiatives that we didn’t support but she did,” Lente said.
The tax omnibus includes a number of tax changes, including energy storage tax deductions, personal income tax restructuring by increasing the amount of tax brackets, adjusting tax rates, and changing income ranges within each bracket, rural healthcare practitioner tax credit, fire recovery tax credits, corporate income tax changes, angel investment tax credit, capital gains deduction, Medicaid home modification gross receipts tax deduction and childcare provider GRT deduction.
Rep. James Townsend proposed a house floor substitute for HB 252 which would lower the personal income tax rate to a flat one percent for all filers. Townsend said this would put $1.75 billion into the economy and it also removed the corporate income tax structure while leaving the bill otherwise intact.
Lente called the substitute unfriendly.
“Basic calculations right now look like this proposal would cost this tax package a little over $2 billion. So it goes from $200 million to $2 billion,” Lente asked Townsend.
Townsend replied that his calculations were that his proposal would cost almost $2 billion.
The House tabled the substitute on a 44-25 vote following a protracted debate.
Lente said that House and Senate members met to discuss the tax bill last week. Earlier, legislators said this was to avoid any last-minute chaos with the hefty bill.
The 2023 tax omnibus bill went through several versions between the House and Senate and related committees before being sent to Gov. Michelle Lujan Grisham, where she line-item vetoed the bill in ways that angered some, leading one legislator to file suit.
Rep. Miguel Garcia, D-Albuquerque, filed a petition for a writ of mandamus against Lujan Grisham due to the extent to her line-item vetoes in last year’s tax omnibus bill.
No hearings are set in that case, with nothing filed in it since January.