Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Wirth
LAST UPDATED
ORIGINAL DATE 2/5/2025
SHORT TITLE Local News Printer Tax Credit
BILL
NUMBER Senate Bill 111
ANALYST Gray
REVENUE*
(dollars in thousands)
Type FY25 FY26 FY27 FY28 FY29
Recurring or
Nonrecurring
Fund
Affected
PIT and
CIT
$0 ($1,000.0) ($1,000.0) ($1,000.0) ($1,000.0) Recurring General Fund
Parentheses ( ) indicate revenue decreases.
*Amounts reflect most recent analysis of this legislation.
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
TRD $0 $47.8 $0 $47.8 Nonrecurring General Fund
TRD $0 $85.6 $85.6 $171.2 Recurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Relates to Senate Bill 110
Sources of Information
LFC Files
Agency Analysis Received From
Taxation and Revenue Department (TRD) New Mexico Attorney General (NMAG)
SUMMARY
Synopsis of Senate Bill 111
Senate Bill 111 (SB111) creates a refundable tax credit for businesses that provide newspaper
printing services for news organizations. The credit would be based on the number of and wages
paid to the employees of the printer.
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns, or June 20, 2025, if enacted. The bill applies to tax years 2025 through
2029. Senate Bill 111 – Page 2
FISCAL IMPLICATIONS
Analysis from the Taxation and Revenue Department (TRD) estimates SB111 will reduce
recurring general fund revenue by $1 million beginning in FY26. The agency assumes annual
claims will be greater than the aggregate cap. Methods are discussed below.
This bill creates or expands a tax expenditure. Estimating the cost of tax expenditures is difficult.
Confidentiality requirements surrounding certain taxpayer information create uncertainty, and
analysts must frequently interpret third-party data sources. The statutory criteria for a tax
expenditure may be ambiguous, further complicating the initial cost estimate of the fiscal impact.
Once a tax expenditure has been approved, information constraints continue to create challenges
in tracking the real costs (and benefits) of tax expenditures.
Methods. TRD uses Bureau of Labor Statistics’ Quarterly Census of Employment and Wages
(QCEW) to estimate the number of employees per establishment who would be eligible for the
contemplated credit. The analysis estimates there are 752 employees and 119 establishments for
a ratio of 6.3 employees per establishment. The agency then assumes 35 percent of all
establishments have five employees or more, for an assumed 262 employees and 42 employers.
If all these employees were eligible for the $5,000 per employee credit, the total cost would be
$1.3 million, which exceeds the $1 million aggregate cap.
Operating budget. TRD notes this bill will increase the agency’s administrative and IT costs
on both a recurring and nonrecurring basis. Fiscal year 2026 costs are estimated by the agency to
be $133.4 thousand, with a recurring impact of $85.6 thousand thereafter.
SIGNIFICANT ISSUES
The bill defines a local news printer as an entity that:
- Provides manufacturing, production, and printing services for printing newspapers for a
local news organization,
- Has been engaged in the business of providing local news printer services for five years,
- Employs at least five employees, and.
- Is not a publicly traded business.
The bill defines a local news organization as an entity that:
- Provides a print or digital publication that engages professionals who regularly gather,
prepare, collect, photograph, record, direct the recording of, produce, write, edit, report or
publish news or information that concerns state or local events or other matters of public
interest for distribution through reporting activities;
- Pays at least one individual through employment or contract;
- Discloses its ownership, or, if a nonprofit, declares itself in federal filings, and does not
receive more than 10 percent of its receipts from political action committees or other
political entities;
- Is not a publicly traded entity or owned by a publicly traded entity; and
- For print publications:
o Has published one print publication per month over the previous 36 months and Senate Bill 111 – Page 3
holds a valid periodical permit or has 30 percent of its content dedicated to state
or local news;
- For digital-only entities:
o Has published at least four originally produced stories about the state or local
communities per week over the previous 36-month period and has at least 50
percent of its digital audience in New Mexico.
Analysis from the Office of the Attorney General (NMAG) notes the definitions of local news
organizations under SB111 require the organization to have produced content for three years
prior. In the related SB110, the organizations are required to have produced content for two years
prior. It is unclear whether this is intentional, but policymakers may wish to consider the policy
impacts.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
This bill relates to Senate Bill 110, creates a refundable tax credit for local news organizations
equal to 30 percent of the company’s annual wages.
TECHNICAL ISSUES
TRD notes several technical issues:
On pages 2 and 8, Sections 1(C) and 2(C) do not state when the taxpayer needs to apply
for the tax credit. [TRD] recommends adding the following on page 2, line 19 and page 7,
line 21: “A taxpayer shall apply for certification of the eligibility for the tax credit from
the department on the forms and in the manner prescribed by the department no later than
one year following the end of the calendar year in which the wages were paid.”
If the intent of the bill is to only apply to W-2 wage earning employees and not 1099
contractors, it may be prudent to clarify that in the bill. The bill uses “employ” and
“wages” but then includes in the definition of local news organization, in Sections
1(J)(1)(b), on page 4, lines 14-16 and 2(H)(1)(b), on page 9, lines 18-20, “pays at least
one individual, either through employment or by contract…” Also, section 1(J)(4), on
page 6, and section 2(H)(4), on page 12, state that wages are paid through “the
organization's payroll system.” It is not clear if the credit will include contractors who
may not be paid through the payroll system. Tax & Rev recommends removing in
Section 1(J)(1)(b), line 14 “, either” and on line 15 “or by contract.”
Similarly, in Section 2(H)(1)(b), remove on line 18 “, either” and on line 19 “or by
contract.” [TRD] recommends that wages should be replaced with the word
“compensation” in the following sections: Section 1(B) page 2, line 2; Section 1(J)(4),
page 6, lines 22 and 24 and page 7, line 2; Section 2(B) page 7, line 19; and Section
2(H)(4), page 12, lines 1, 3, and 6.
OTHER SUBSTANT IVE ISSUES
In assessing all tax legislation, LFC staff considers whether the proposal is aligned with
committee-adopted tax policy principles. Those five principles:
Adequacy: Revenue should be adequate to fund needed government services. Senate Bill 111 – Page 4
Efficiency: Tax base should be as broad as possible and avoid excess reliance on one tax.
Equity: Different taxpayers should be treated fairly.
Simplicity: Collection should be simple and easily understood.
Accountability: Preferences should be easy to monitor and evaluate
In addition, staff reviews whether the bill meets principles specific to tax expenditures. Those
policies and how this bill addresses those issues:
Tax Expenditure Policy Principle Met? Comments
Vetted: The proposed new or expanded tax expenditure was vetted
through interim legislative committees, such as LFC and the Revenue
Stabilization and Tax Policy Committee, to review fiscal, legal, and
general policy parameters.
Targeted: The tax expenditure has a clearly stated purpose, long-term
goals, and measurable annual targets designed to mark progress toward
the goals.
Clearly stated purpose
Long-term goals
Measurable targets
Transparent: The tax expenditure requires at least annual reporting by
the recipients, the Taxation and Revenue Department, and other relevant
agencies
Accountable: The required reporting allows for analysis by members of
the public to determine progress toward annual targets and determination
of effectiveness and efficiency. The tax expenditure is set to expire unless
legislative action is taken to review the tax expenditure and extend the
expiration date.
Public analysis
Expiration date
Effective: The tax expenditure fulfills the stated purpose. If the tax
expenditure is designed to alter behavior – for example, economic
development incentives intended to increase economic growth – there are
indicators the recipients would not have performed the desired actions
“but for” the existence of the tax expenditure.
Fulfills stated purpose ?
Passes “but for” test
Efficient: The tax expenditure is the most cost-effective way to achieve
the desired results.
?
Key: Met Not Met ? Unclear
BG/rl/hg/sgs