The bill would be a complete change to the New Mexico tax system. It would repeal virtually all the taxes in the state and replace them with a two percent consumption tax. Municipalities and counties would be allowed to add up to one percent in GRT increases.
The bill’s sponsor, Sen. Bill Sharer, R-Farmington, hailed the bill’s passage.
“It will be just easier to understand and compute. You know what you buy, sell and rent. Simply add 2% for the state’s cut rather than the over 8% tax that is charged now in some cities. We won’t need to charge those high taxes once the special interest credits, deductions and exemptions are eliminate,” Sharer said in a statement.
Legislation that would have examined the effectiveness of all tax credits was vetoed by both former governor Bill Richardson and current governor Susana Martinez. Martinez instructed her office to create a tax expenditure budget, but critics said it was not as encompassing as they wished and had items missing.
The bill now moves on to the Senate Corporations Committee where it could face a tougher hearing. It would then need to navigate the Senate Public Affairs Committee and the Senate Finance Committee before passage — a tall task, even in a 60-day session.