Bipartisan bill to cut gross receipt tax unanimously tabled

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SANTA FE, N.M. – There was a lot of debate around a certain tax cut that was unanimously tabled at the Roundhouse this weekend.

Republican state Rep. and bill sponsor Jason Harper told KOB 4 Sunday that most tax based bills get tabled after the first read, but he is hopeful it will make a comeback when legislators put together a larger tax package.

“Going into committee I felt really good, it was bipartisanly supported, the governor is on board. I have been working this issue for six, seven years and I believe this is going to be the year that it is going to happen,” said state Rep. Jason Harper. 

House Bill 367 would reduce the gross receipts tax by a quarter percent, but it would also make a big change to the tax code. The bill would also reduce pyramiding taxes that impact small businesses the most.

“A gross receipts tax says when I go to buy a phone it’s taxed, but a gross receipts tax says when it is designed, it is taxed, when you buy the materials it’s taxed, when you assemble it’s taxed, when you send it to the distributor it’s taxed. So it pyramids, and that tax compounds on top of each other and makes it much higher,” said Harper. 

But those taxes don’t just go to the state, they also go towards the city and county, and those local leaders pushed back on this bill.

“The bill sounds like it has a good basis that we can agree on but the concern of rural New Mexico cities is the impact on local revenues.”

After much discussion the bill was unanimously tabled over the concerns heard from cities and counties. But Harper says his colleges could amend the bill to also help local governments.

“If there is a time now to pull those tricks out of the sleeve it will be now and consider you the modest magician,” said state Rep. Derrick J. Lente. “We are working right now with the governor and the tax secretary on what is the right approach, so we can do something amazing to help small businesses, at the same time make sure we are not negatively impacted cities and counties.”

In the next week or two, the Taxation and Revenue Committee will be putting together a larger tax package made up of tabled tax bills. Harper says he’s confident his bill will be included in some form. 

Food at grocery stores isn’t taxed in New Mexico, but this proposal could impact most of what people buy.

State lawmakers have one more month to make that decision.