HOUSE BILL 365

54th legislature - STATE OF NEW MEXICO - first session, 2019

INTRODUCED BY

Miguel P. Garcia

 

 

 

 

 

AN ACT

RELATING TO TAXATION; MODIFYING THE PERSONAL INCOME TAX BRACKETS AND RATES; INCREASING THE LOW-INCOME COMPREHENSIVE TAX REBATE; REPEALING AN OUTDATED VERSION OF SECTION 7-2-7 NMSA 1978 (BEING LAWS 2005 (1ST S.S.), CHAPTER 3, SECTION 2).

 

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) 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, [2008] 2020:

          A. For married individuals filing separate returns:

     If the taxable income is:       The tax shall be:

Not over [$4,000] $5,500              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                          $384 plus 4.9% of    

excess over $12,000]

Over $5,500 but not over $11,000      $94.00 plus 3.2% of

                                      excess over $5,500

Over $11,000 but not over $16,000     $270 plus 4.7% of

                                      excess over $11,000

Over $16,000 but not over $36,000     $505 plus 4.9% of

                                      excess over $16,000

Over $36,000 but not over $56,000     $1,485 plus 5.5% of

                                      excess over $36,000

Over $56,000 but not over $75,000     $2,585 plus 6.0% of

                                      excess over $56,000

Over $75,000 but not over $125,000    $3,725 plus 6.5% of

                                      excess over $75,000

Over $125,000 but not over $175,000   $6,975 plus 6.9% of

                                      excess over $125,000

Over $175,000                         $10,425 plus 7.9% of

                                      excess over $175,000.

          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%] 1.3% of taxable                                       income

Over $8,000 but not over $16,000      [$136] $104 plus [3.2%]                                       2.8% of excess over                                        $8,000

Over $16,000 but not over $24,000     [$392] $328 plus [4.7%]                                       4.3% of excess over                                        $16,000

Over $24,000 but not over $55,000     [$768] $672 plus 4.9% of

                                      excess over $24,000

Over $55,000 but not over $85,000     $2,191 plus 5.2% of

                                      excess over $55,000

Over $85,000 but not over $115,000    $3,751 plus 5.9% of

                                      excess over $85,000

Over $115,000 but not over $150,000   $5,521 plus 6.5% of

                                      excess over $115,000

Over $150,000 but not over $250,000   $7,796 plus 6.9% of

                                      excess over $150,000

Over $250,000                         $14,696 plus 7.9% of

                                      excess over $250,000.

          C. For surviving spouses and married individuals filing joint returns:

     If the taxable income is:       The tax shall be:

Not over $8,000                       1.3% of taxable income

Over $8,000 but not over $16,000      $104 plus 3.0% of

                                      excess over $8,000

Over $16,000 but not over $24,000     $344 plus 4.7% of

                                      excess over $16,000

Over $24,000 but not over $55,000     $720 plus 4.9% of

                                      excess over $24,000

Over $55,000 but not over $85,000     $2,239 plus 5.5% of

                                      excess over $55,000

Over $85,000 but not over $115,000    $3,889 plus 5.9% of

                                      excess over $85,000

Over $115,000 but not over $150,000   $5,569 plus 6.5% of

                                      excess over $115,000

Over $150,000 but not over $250,000   $7,934 plus 6.9% of

                                      excess over $150,000

Over $250,000                         $14,834 plus 7.9% of

                                      excess over $250,000.

          [C.] D. 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] $94.00 plus 3.2%                                       of excess over $5,500

Over $11,000 but not over $16,000     [$269.50] $270 plus 4.7%                                       of excess over $11,000

Over $16,000 but not over $36,000     [$504.50] $505 plus 4.9% of excess over $16,000

Over $36,000 but not over $56,000     $1,485 plus 5.5% of

                                      excess over $36,000

Over $56,000 but not over $75,000     $2,585 plus 6.0% of

                                      excess over $56,000

Over $75,000 but not over $125,000    $3,725 plus 6.5% of

                                      excess over $75,000

Over $125,000 but not over $175,000   $6,975 plus 6.9% of

                                      excess over $125,000

Over $175,000                         $10,425 plus 7.9% of

                                      excess over $175,000.

          [D.] E. 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. The tax rebate provided for in this section may be claimed in the amount shown in the following table for any taxable year beginning on or after January 1, 2020:

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   295

 8,000    9,000     70     105    135    170    195   240

 9,000   10,000     65      95    115    145    175   205

10,000   11,000     60      80    100    130    155   185

11,000   12,000     55      70     90    110    135   160

12,000   13,000     50      65     85    100    115   140

13,000   14,000     50      65     85    100    115   140

14,000   15,000     45      60     75     90    105   120

15,000   16,000     40      55     70     85     95   110

16,000   17,000     35      50     65     80     85   105

17,000   18,000     30      45     60     70     80    95

18,000   19,000     25      35     50     60     70    80

19,000   20,000     20      30     40     50     60    65

20,000   21,000     15      25     30     40     50    55

21,000   22,000     10      20     25     35     40    45]

    $0     $770   $186    $248   $310   $372   $433  $495

   770    1,550    209     302    387    480    542   642

 1,550    2,320    209     302    387    480    542   673

 2,320    3,100    209     302    387    480    542   697

 3,100    3,870    209     302    387    480    542   697

 3,870    4,640    209     302    387    480    542   697

 4,640    5,420    209     302    387    480    542   697

 5,420    6,190    209     302    387    480    550   697

 6,190    6,970    209     302    387    480    550   697

 6,970    7,740    194     294    372    472    550   697

 7,740    8,510    178     271    356    457    550   666

 8,510    9,290    163     240    325    403    488   635

 9,290   10,840    139     201    263    341    426   573

10,840   12,390    124     178    224    279    348   457

12,390   13,930    108     163    209    263    302   372

13,930   15,480    101     147    178    224    271   317

15,480   17,030     93     124    155    201    240   286

17,030   18,580     85     108    139    170    209   248

18,580   20,130     77     101    132    155    178   217

20,130   21,670     77     101    132    155    178   217

21,670   23,220     70      93    116    139    163   186

23,220   24,770     62      85    108    132    147   170

24,770   26,320     54      77    101    124    132   163

26,320   27,870     46      70     93    108    124   147

27,870   29,410     39      54     77     93    108   124

29,410   30,960     31      46     62     77     93   101

30,960   32,510     23      39     46     62     77    85

32,510   34,060     15      31     39     54     62    70.

          E. If a taxpayer's modified gross income is zero, the taxpayer may claim a credit in the amount shown in the first row of the table appropriate for the taxpayer's number of exemptions.

          F. The tax rebates provided for in this section may be deducted from the taxpayer's New Mexico income tax liability for the taxable year. If the tax rebates exceed the taxpayer's income tax liability, the excess shall be refunded to the taxpayer.

          G. For purposes of this section, "dependent" means "dependent" as defined by Section 152 of the Internal Revenue Code [of 1986], as that section may be amended or renumbered, but also includes any 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."

     SECTION 3. REPEAL.--That version of Section 7-2-7 NMSA 1978 (being Laws 2005 (1st S.S.), Chapter 3, Section 2) is repealed.

     SECTION 4. EFFECTIVE DATE.--The effective date of the provisions of this act is January 1, 2020.

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