The bill proposes a significant change to the individual income tax structure in New Mexico by establishing a flat income tax rate of zero percent for all taxable years beginning on or after January 1, 2026. This amendment replaces the existing tiered tax rates that apply to various income brackets, effectively eliminating personal income tax for residents. The bill also modifies the language regarding taxpayer returns, stating that while personal income tax returns are not required, individuals who are required to file a federal income tax return may choose to file a state return.

Additionally, the bill specifies that residents or individuals who elect to file a return must do so by the due date of their federal income tax return. The provisions of this act will take effect on January 1, 2026, aligning with the implementation of the new zero percent tax rate. Overall, this legislation aims to simplify the tax process for individuals in New Mexico while reducing their tax burden.

Statutes affected:
introduced version: 7-2-7, 7-2-12