Wednesday, March 22, 2023
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You Get a Tax Break, and You Get a Tax Break!

New Legislation Bills Propose Tax Changes for Health Care, Low Income and Land Owners


Each year, legislators propose updates, amendments and/or completely new bills to incorporate into the New Mexico tax plan. In the 2021 legislative session, there are four such bills to watch ranging from health care practitioners to low-income earners and even landowners. To most people these bills, if passed, will not have too much of an impact in our daily lives or tax preparations. To those, however, on the lower and upper ends of the tax brackets, you might be in luck. Each of these bills is currently pre-filed in the House, which means that the next step would be to send them to committees once the legislature starts.

A Thank You For Rural Health Workers

House Bill 45, which is sponsored by State Rep. Miguel P. Garcia (D-Bernalillo), proposes that health care practitioners who provide health care services in rural and underserved areas of New Mexico receive a tax credit of up to $5,000. In order to qualify, a health care practitioner must have worked 2,080 hours at a practice site located in a rural and underserved area. Health care practitioners who provided at least 1,040 hours of service in these areas can qualify for half of the credit amount.

A Few Bucks Back For Low-Income Families

House Bill 42, which is sponsored by State Rep. Christine Chandler (D-Los Alamos), proposes that low-income residents and families making up to $36,000 may claim a tax rebate for a portion of state and local taxes. Current low-income rebates cap out at $450. This law would increase that to $700. Not a gamechanger, but every bit helps.

Exempting Social Security from State Taxes

New Mexico remains one of only 13 states that taxes social security benefits as income. That costs the average senior $700 per year according to a legislative report. Each year, Republican and Democratic legislators introduce competing measures to give seniors some relief (there were at least 6 different versions last year alone), but none has ever made it to full debate or vote. This year, Republicans are first out of the gate with House Bill 49, which is sponsored by State Representatives Cathrynn N. Brown (R-Eddy), Rebecca Down (R-Grant), and Gail Armstrong (R-Catron). It proposes an exemption from income tax for anyone receiving Social Security. Watch for other proposals from Democrats which are likely to provide broader exemptions based on age (65+) instead of just social security. With new leaders in House and Senate budget and tax committees, bill sponsors (and seniors) are hopeful 2021 will be the year.

A Handout For Developers

House Bill 26, sponsored by G. Andres Romero (D-Bernalillo), proposes that greenfields in special tax districts are exempt from certain taxes. A greenfield area is defined as an area that consists of land, the majority of which has not been previously developed and is not served by municipal or county public infrastructure. Supporters will say that this type of incentive makes New Mexico more attractive to out-of-state companies looking to invest big in the Land of Enchantment (hello, Netflix) and help spark development. Opponents will call it a giveaway to developers who shouldn't be treated differently than local mom and pop businesses who do have to pay when they expand and this only applies to undeveloped land, encouraging sprawl not infill in urban cores like Downtown Albuquerque. Oh, and the proposed Santolina development on the westside would be a big beneficiary. Watch for the sparks to fly about this one.


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