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F I S C A L I M P A C T R E P O R T
SPONSOR Picraux
ORIGINAL DATE
LAST UPDATED
2/11/06
HB 487
SHORT TITLE Payment of Estate Taxes in Art Donations
SB
ANALYST Earnest
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY06
FY07
None
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
LFC Files
Responses Received From
Taxation and Revenue Department (TRD)
SUMMARY
Synopsis of Bill
House Bill 487 amends the Art Acceptance Act to allow taxpayers, or their descendents, to do-
nate art in lieu of estate taxes to any state museum, cultural center or monument. Current law
allows such donations only to the museum of New Mexico.
FISCAL IMPLICATIONS
HB 487 has no fiscal impact on the state under current law.
SIGNIFICANT ISSUES
New Mexico’s estate tax rate is tied to federal tax law. The repeal of the federal estate tax credit
in 2005 effectively eliminated estate taxes in New Mexico. The federal tax legislation repealing
the estate tax credit in 2005 and the federal estate tax by 2010 will sunset in 2011. Unless ex-
tended, the federal estate tax estate tax credit will be reinstated at 2001 tax rates.
Eighteen states have either decoupled their estate tax laws from the federal tax code or enacted
new laws to continue taxing estates upon transfer to descendents or heirs.