News
Gross receipts tax bill stumbles over first hurdle in committee
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By Robert Nott, The Santa Fe New Mexican
A bill favored by Gov. Michelle Lujan Grisham that would cut the state’s gross receipts tax to benefit New Mexico’s small businesses has been sent back to the drawing board. Members of the House Taxation and Revenue Committee unanimously voted to temporarily table House Bill 367, which would lower the state’s gross receipts tax rate an additional quarter-percent — from 5% to 4.625% — and create a deduction for a range of services small businesses contract out to other vendors, such as accounting, legal and payroll work. The bill, introduced by Rep. Jason Harper, R-Rio Rancho, was a priority for Lujan Grisham, who announced just a week ago her plan to reduce the gross receipts tax again this year. Last year the state reduced it by ⅛-cent, though that decrease will not go into effect until July 1.
Since the bill was introduced, municipalities have marshaled forces against it, though initial reactions had been initially muted. But on Friday, committee members suggested Harper refashion the bill in the face of opposition from some 20 representatives, lobbyists and mayors from a number of cities who showed up in force.
Their impassioned pleas to stop the bill speaks to the complicated issue of finding ways to cut taxes to help businesses without hurting the communities in which the businesses operate.
HB 367 would deliver “a huge blow” to the state’s largest city, said Sanjay Bhakta, chief financial officer for the city of Albuquerque.