HB 547 Omnibus Tax Bill considered most of the tax increases proposed throughout the session, but in the end, we were greatly relieved to see no increased Personal Income Taxes (PIT) for anyone. While PIT reductions, tax rebates for 2021 taxpayers and a single sales factor for NM businesses* are positive aspects of this legislation, there are many other significant tax increases and lots of taxpayer money giveaways that we oppose. To name a few, corporate income tax increase for some businesses and a reduction of the capital gains tax deduction** will adversely impact our state. NMBC is not going to pander to the politicians who passed it and say that overall, it was okay. It was not okay to increase any tax when the state had a $3.6 billion surplus and we applaud those legislators who held this conviction and voted ‘No’! Read even more HERE.
*Note: HB 547 adopts single sales factor apportionment for corporate taxes. That would be a welcome benefit to multi-state companies but wouldn’t impact New Mexico’s single-location businesses. Under a single sales factor formula, the share of a corporation’s total profit that a particular state would tax would be based solely on the share of the corporation’s nationwide sales occurring in the state.
**Note: The capital gains deduction in HB 547 permits a 40% deduction on the sale of a New Mexico business up to $1 million in gain but the deduction for any other type of capital gain is capped at $2,500, down from 40% of any gain.