Gov. Michelle Lujan Grisham said Wednesday that a statewide cut in gross receipts taxes will be on her agenda when the Legislature meets in January.
She made the announcement during an economic development event Wednesday in Albuquerque. The first-term Democratic governor is running for reelection and has been battling criticism over her handling of the pandemic and economic fallout among businesses across the state.
The proposal would trim New Mexico’s gross receipts tax rate by 0.25%, putting the rate at under 5%. The governor’s office said the proposed reduction would save New Mexicans an estimated $145 million annually.
Supporters also say it would help ease the pyramiding that results from the state’s tax policies.
“Cutting gross receipts taxes for the first time in decades will put more money in the pockets of New Mexico families and businesses,” Lujan Grisham said in a statement. “We have the tools to continue building long-lasting economic success — we just have to be bold enough to use them.”
Lawmakers are expected to be under less pressure when they meet to set spending priorities and hash out the budget in January, as New Mexico is expected to be flush with cash.
New Mexico Taxation and Revenue Cabinet Secretary Stephanie Schardin Clarke said since New Mexico recently expanded its gross receipts tax to include internet sales, that new revenue source paves the way to lower the gross receipts tax rate. She said reducing the rate also adds a competitive advantage for New Mexico businesses.
Source: Associated Press