The Roundhouse in Santa Fe. Post file photo
STATE News:
- Bill to eliminate state income tax for many working families now heads to Governor
SANTA FE – After conference committee meetings Friday, the House of Representatives and the Senate both voted to agree on amendments to House Bill 14, a tax bill that would effectively eliminate state income tax for tens of thousands of New Mexico families.
HB 14 increases and expands tax cuts for nearly 400,000 New Mexicans, includes credits for foster parents and guardians, expands a Gross Receipts Tax deduction for healthcare practitioners, and makes a modest increase to taxes on alcoholic beverages, directing funds to address alcohol related harms across New Mexico.
HB 14 would effectively eliminate state income tax for:
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Married couples |
Single individuals |
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with three kids making $70,000 or less |
with three kids making $60,000 or less |
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with two kids making $65,000 or less |
with two kids making $55,000 or less |
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with one kid making $55,000 or less |
with one kid making $40,000 or less |
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with no kids making $30,000 or less |
with no kids making $25,000 or less |
These tax cuts are refundable, so families would receive a refund payment for any credits going beyond the household’s state tax liability.
“In an open and transparent process, members of the House and the Senate came together to reach an agreement on a tax package that will bring relief to New Mexico families who are struggling to keep up with rising costs,” said HB 14 sponsor Rep. Derrick Lente (D-Sandia Pueblo), who serves as Chair of the House Taxation and Revenue Committee. “In the face of economic uncertainty at the federal level, New Mexico is putting more money in the pockets of the public school teachers, police officers, firefighters, and the workers who power our state.”
The amended tax bill now also includes:
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Foster Parent and Guardian Tax Credit: provides financial relief for foster parents and guardians with a refundable $250 per month credit;
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Liquor Excise Tax Increase: raises the liquor excise tax by 20% to generate additional revenue for targeted programs to help address alcohol harms and support treatment; and
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Health Practitioner Coinsurance Deduction: expands the existing Gross Receipts Tax deduction for healthcare providers to include coinsurance payments.
Most of the tax changes in this bill would take effect in fiscal year 2027. HB 14 now heads to the Governor’s desk to be signed into law.
Below is a list of other key affordability legislation passed by the House this session:
- House Bill 6 (Awaiting Governor’s signature): Raises minimum pay for workers on publicly-supported projects
- House Bill 7 (Awaiting Senate floor vote): Provides a head start at financial independence for every child born in New Mexico, by establishing “baby bonds” that would generate interest throughout the individual’s childhood and which could be used for education, housing, entrepreneurship costs, or investment opportunities when the child graduates from high school
- House Bill 22 (Awaiting Senate floor vote): Stops employers from taking credit card fees out of the wages of tipped workers
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Raises minimum teacher salaries by $5,000 and providing a 4% average salary increase for public school personnel;
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Improves food security with $10 million in annual funding for food banks;
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Directs $110 million to targeted housing development with a focus on Bernalillo and Doña Ana counties;
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Makes $45.9 million available to housing providers to focus on specialized housing solutions and a strategic response to homelessness; and
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Delivers $15 billion in state and federal funding for Medicaid and other critical healthcare services.
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- House Bill 69 (Awaiting Governor’s signature): Expands access to the federal Public Service Loan Forgiveness (PSLF) program within New Mexico;
- House Bill 15 (Awaiting Senate floor vote): Strengthens New Mexico’s healthcare workforce, particularly in high-demand fields, by incentivizing New Mexico alumni working in healthcare to return to the state;
- Senate Bill 267 (Awaiting Governor’s signature): Adds new protections for residential renters and applicants for residential rentals, including capping application and late fees and requiring more notice for increasing fees;
- House Bill 91 (Awaiting Governor’s signature): Allows public utilities to implement additional rate structures intended to reduce utility costs for low-income customers. and
- House Bill 47 (Signed by Governor): Increases property tax exemptions for veterans.