New Mexico State House Passes Bill to Lower Personal Income Taxes and Incentivize Energy Storage Projects

The New Mexico state House recently passed a bill that aims to improve access to healthcare and childcare, support clean energy, and provide support for those in need. The bill, introduced by Democratic state Rep. Derrick Lente, includes several provisions that would reduce personal income taxes for all income tax payers and incentivize the construction of large-scale energy storage projects.

The tax changes would result in annual income tax savings for all income tax payers. For a couple with taxable income of $8,000, the annual income tax would decrease by $16, or 12%, to $136. A wealthier couple with an annual taxable income of $400,000 would save about $553, or 2.8%, on annual taxes of $20,042.

The bill also includes tax credits and deductions aimed at shoring up the medical workforce in remote rural areas and easing the fiscal burden on child care and preschool providers. The proposed changes for businesses would set a flat 5.9% rate for the corporate income tax at companies with less than $500,000 in annual income.

The bill would incentivize the construction of large-scale energy storage projects by reducing local government taxes on the facilities through the use of industrial revenue bonds. This reduction in taxes would make renewable wind and solar energy production more useful and contribute to the state’s clean energy goals.

New Mexico residents who saw their homes destroyed in recent wildfires would be eligible for a new income tax credit. The bill also includes a provision that reduces the cap on capital gains tax exemptions to $2,500, limiting a tax break that overwhelmingly benefits the state’s highest earners.

House Democrats, led by state Rep. Jim Townsend, proposed more aggressive tax cuts in light of an estimated $3.5 billion general fund surplus for the coming fiscal year. However, their amendment suggesting a flat 1% tax on personal income was unsuccessful.

Current rates range from 1.7% on taxable income under $4,000 for individuals to 5.9% on annual income over $157,000. The proposed tax changes would have a significant impact on the state’s economy and the lives of its residents.

The bill now moves to the Senate for consideration. If it is passed, it will be sent to Governor Michelle Lujan-Grisham for her signature. The governor is expected to support the bill, as she has previously expressed her support for reducing taxes and investing in clean energy.

In conclusion, the New Mexico state House has passed a bill that would reduce personal income taxes and incentivize the construction of large-scale energy storage projects. The bill aims to improve access to healthcare and childcare, support clean energy, and provide support for those in need. The tax changes would result in significant savings for all income tax payers and contribute to the state’s clean energy goals. The bill now moves to the Senate for consideration and, if passed, will be sent to Governor Michelle Lujan-Grisham for her signature.