Governor to propose tax credit for small businesses
Posted at: 01/15/2013 10:00 PM
| Updated at: 01/15/2013 10:15 PM
By: Maria Guererro, KOB Eyewitness News 4
One of Governor Susana Martinez’s goals this session is to make New Mexico more business-friendly. She’s proposing a tax credit to help small businesses grow and get New Mexicans back to work.
Even with more than four decades of success, Frontier and Golden Pride owner Larry Rainosek still remembers his struggles starting out. "We definitely had times when payroll was just barely we could meet it so we had to be prepared to take advantage of whatever savings we could get," Rainosek said.
Small businesses like Frontier could be getting a new incentive to expand. Governor Susana Martinez is proposing to give every small businesses in the state a $1,000 tax credit for every job created and retained over the next two years.
"I would think this would encourage outside employers (outside the state) and look at New Mexico for that because that would be significant. Now, can the state afford that," asks Rainosek.
"It's a tax credit so basically the state loses that much in revenue. And the question would be what would the state otherwise do with the money," asks Allen Parkman, professor emeritus of
Parkman expects the legislature to debate whether the funds should be used instead in infrastructure and capital projects, which also create jobs.
Parkman adds, if it passes it may end up being more of a paperwork burden for small businesses than the kick start they need.
"We want to see that we keep things as simple as possible for the small business," said Rainosek.
Another concern the professor brings up is it depends on how the bill is written.
For example, if the law starts July 1, a business owner could layoff workers in June then rehire them in July and get the $1,000 tax credit without actually adding any new jobs.