This bill proposes a comprehensive overhaul of the taxation framework in New Mexico, primarily by repealing the Working Families Tax Credit and introducing the Earned Income Tax Credit (EITC). The EITC will enable eligible individuals to receive a tax credit based on their earned income, with specific percentages and phaseout amounts determined by the number of qualifying children. Additionally, a new Foster Parent and Guardian Income Tax Credit is established, offering a credit of $250 per month for each month a taxpayer serves as a foster parent or guardian, with a maximum annual credit of $3,000. The bill also amends tax provisions for health care practitioners, allowing deductions for coinsurance paid by patients.

Moreover, the bill revises the liquor excise tax structure, implementing new tax rates based on the alcohol by volume of products sold. It sets specific tax rates for lower-alcohol products and higher-alcohol products, while clarifying tax liability for wine transfers. The distribution of net receipts from the liquor excise tax is also outlined, allocating funds to various programs, including a new Tribal Alcohol Harms Alleviation Fund aimed at supporting alcohol harm prevention and treatment services on Indian lands. The bill includes a delayed repeal of certain sections effective January 1, 2031, and specifies that the new provisions will apply to taxable years beginning on or after January 1, 2026.

Statutes affected:
introduced version: 7-2-18.15
TR substitute: 7-1-10, 7-31-2, 7-31-4, 7-31-7, 7-31-8, 7-31-26, 7-2-18.15
Final Version: 7-2-18.15, 7-9-93, 7-17-5, 7-1-6.40