HOUSE TAXATION AND REVENUE COMMITTEE SUBSTITUTE FOR
HOUSE BILL 291
55th legislature - STATE OF NEW MEXICO - first session, 2021
AN ACT
RELATING TO TAXATION; ADDING NEW BRACKETS TO THE INCOME TAX; INCREASING AND INDEXING THE LOW-INCOME COMPREHENSIVE TAX REBATE; INCREASING THE AMOUNT OF THE WORKING FAMILIES TAX CREDIT; EXPANDING THE CREDIT TO CERTAIN RESIDENTS WHO ARE INELIGIBLE FOR THE FEDERAL EARNED INCOME TAX CREDIT ON WHICH THE WORKING FAMILIES TAX CREDIT IS BASED; LIMITING THE CAPITAL GAINS DEDUCTION FROM NET INCOME FOR CERTAIN TAXPAYERS; PROVIDING A THREE PERCENT LIMITATION ON INCREASES IN VALUATION OF RESIDENTIAL PROPERTY TO PROPERTY THAT IS OCCUPIED BY THE OWNER AS THE OWNER'S PRINCIPAL PLACE OF RESIDENCE; PROVIDING A TEN PERCENT LIMITATION ON INCREASES IN VALUATION OF RESIDENTIAL PROPERTY THAT IS NOT OCCUPIED BY THE OWNER AS THE OWNER'S PRINCIPAL PLACE OF RESIDENCE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 7-2-7 NMSA 1978 (being Laws 2005, Chapter 104, Section 4, as amended) is amended to read:
"7-2-7. INDIVIDUAL INCOME TAX RATES.--The tax imposed by Section 7-2-3 NMSA 1978 shall be at the following rates for any taxable year beginning on or after January 1, [2021] 2022:
A. For married individuals filing separate returns:
If the taxable income is: The tax shall be:
Not over $4,000 1.7% of taxable income
Over $4,000 but not over $8,000 $68.00 plus 3.2% of excess over $4,000
Over $8,000 but not over $12,000 $196 plus 4.7% of excess over $8,000
Over $12,000 but not over $384 plus 4.9% of excess
[$157,500] $100,000 over $12,000
Over $100,000 but not over $157,500 $4,696 plus 5.5% of excess over $100,000
Over $157,500 but not over $207,500 [$7,513.50] $7,858.50 plus 5.9% of excess over $157,500
Over $207,500 but not over $311,000 $10,808.50 plus 6.2% of
excess over $207,500
Over $311,000 $17,225.50 plus 6.5% of excess over $311,000.
B. For heads of household, surviving spouses and married individuals filing joint returns:
If the taxable income is: The tax shall be:
Not over $8,000 1.7% of taxable income
Over $8,000 but not over $16,000 $136 plus 3.2% of excess over $8,000
Over $16,000 but not over $24,000 $392 plus 4.7% of excess over $16,000
Over $24,000 but not over $768 plus 4.9% of excess
[$315,000] $200,000 over $24,000
Over $200,000 but not over $315,000 $9,392 plus 5.5% of excess over $200,000
Over $315,000 but not over $415,000 [$15,027] $15,717 plus 5.9% of excess over $315,000
Over $415,000 but not over $622,000 $21,617 plus 6.2% of
excess over $415,000
Over $622,000 $34,451 plus 6.5% of excess over $622,000.
C. For single individuals and for estates and trusts:
If the taxable income is: The tax shall be:
Not over $5,500 1.7% of taxable income
Over $5,500 but not over $11,000 $93.50 plus 3.2% of excess over $5,500
Over $11,000 but not over $16,000 $269.50 plus 4.7% of excess over $11,000
Over $16,000 but not over $504.50 plus 4.9% of
[$210,000] $135,000 excess over $16,000
Over $135,000 but not over $210,000 $6,335.50 plus 5.5% of excess over $135,000
Over $210,000 but not over $280,000 [$10,010.50] $10,460.50 plus 5.9% of excess over $210,000
Over $280,000 but not over $415,000 $14,950.50 plus 6.2% of
excess over $280,000
Over $415,000 $22,960.50 plus 6.5% of excess over $415,000.
D. The tax on the sum of any lump-sum amounts included in net income is an amount equal to five multiplied by the difference between:
(1) the amount of tax due on the taxpayer's taxable income; and
(2) the amount of tax that would be due on an amount equal to the taxpayer's taxable income and twenty percent of the taxpayer's lump-sum amounts included in net income."
SECTION 2. Section 7-2-14 NMSA 1978 (being Laws 1972, Chapter 20, Section 2, as amended) is amended to read:
"7-2-14. LOW-INCOME COMPREHENSIVE TAX REBATE.--
A. Except as otherwise provided in Subsection B of this section, any resident who files an individual New Mexico income tax return and who is not a dependent of another individual may claim a tax rebate for a portion of state and local taxes to which the resident has been subject during the taxable year for which the return is filed. The tax rebate may be claimed even though the resident has no income taxable under the Income Tax Act. [A husband and wife] Married individuals who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the tax rebate that would have been allowed on a joint return.
B. No claim for the tax rebate provided in this section shall be filed by a resident who was an inmate of a public institution for more than six months during the taxable year for which the tax rebate could be claimed or who was not physically present in New Mexico for at least six months during the taxable year for which the tax rebate could be claimed.
C. For the purposes of this section, the total number of exemptions for which a tax rebate may be claimed or allowed is determined by adding the number of federal exemptions allowable for federal income tax purposes for each individual included in the return who is domiciled in New Mexico plus two additional exemptions for each individual domiciled in New Mexico included in the return who is sixty-five years of age or older plus one additional exemption for each individual domiciled in New Mexico included in the return who, for federal income tax purposes, is blind plus one exemption for each minor child or stepchild of the resident who would be a dependent for federal income tax purposes if the public assistance contributing to the support of the child or stepchild was considered to have been contributed by the resident.
D. Except as provided in Subsection F of this section, the tax rebate provided for in this section may be claimed in the amount shown in the following table:
Modified gross And the total number
income is: of exemptions is:
But Not 6 or
Over Over 1 2 3 4 5 More
[$ 0 $ 500 $ 120 $ 160 $ 200 $ 240 $ 280 $ 320
500 1,000 135 195 250 310 350 415
1,000 1,500 135 195 250 310 350 435
1,500 2,000 135 195 250 310 350 450
2,000 2,500 135 195 250 310 350 450
2,500 3,000 135 195 250 310 350 450
3,000 3,500 135 195 250 310 350 450
3,500 4,000 135 195 250 310 355 450
4,000 4,500 135 195 250 310 355 450
4,500 5,000 125 190 240 305 355 450
5,000 5,500 115 175 230 295 355 430
5,500 6,000 105 155 210 260 315 410
6,000 7,000 90 130 170 220 275 370
7,000 8,000 80 115 145 180 225 &