The bill also entails significant repeals of various tax regulations and credits that have existed under multiple acts, such as the Estate Tax Act and several job credits related to economic incentives. This could lead to a more streamlined tax code but raises concern among advocates of local economic initiatives who may see the removal of such credits as potentially harmful to small businesses and job growth. Both the immediate reduction in corporate and individual tax burdens and the repealing of older tax structures suggest a move towards simplification of the tax system in New Mexico.
Senate Bill 105, introduced by William E. Sharer, focuses on comprehensive tax reform in New Mexico. The bill proposes amendments to the income tax brackets as defined in the Income Tax Act and the Corporate Income and Franchise Tax Act. One of its notable aspects is the reduction of several tax rates, including the gross receipts tax, governmental gross receipts tax, compensating tax, leased vehicle gross receipts tax, and gaming tax applicable to manufacturers. In addition, it introduces a slight increase to the bingo and raffle tax, indicating a shift in the state's approach to gambling-related taxes.
There are several points of contention that have surfaced during discussions surrounding SB105. Critics of the bill worry that the removal of tax credits could adversely affect businesses and employment opportunities in the state, particularly for small businesses that rely on these incentives to thrive. Additionally, the transition away from certain taxes may lead to decreased funding in specific sectors, raising concerns over the implications for public services and infrastructure development. The debate emphasizes the balance needed between reducing taxation and ensuring adequate funding for state needs.