SENATE BILL

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Michael Padilla

AN ACT

RELATING TO TAXATION; CREATING A GROSS RECEIPTS TAX DEDUCTION FOR THE SALE OF CONSTRUCTION MATERIALS AND LABOR USED FOR THE DEVELOPMENT OF AFFORDABLE HOUSING MULTIFAMILY RESIDENTIAL HOUSING PROJECTS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

     "[NEW MATERIAL] DEDUCTION--GROSS RECEIPTS--SALE OF CONSTRUCTION MATERIALS AND LABOR USED FOR THE DEVELOPMENT OF AFFORDABLE HOUSING MULTIFAMILY RESIDENTIAL HOUSING PROJECTS.--

          A. Prior to July 1, 2033, receipts from selling construction materials and labor may be deducted from gross receipts if:

                (1) the construction materials and labor are being used for the purpose of developing multifamily residential housing;

                (2) the housing units being developed will be affordable housing; and

                (3) the construction materials and labor are sold to a qualifying grantee pursuant to the Affordable Housing Act.

          B. The deduction provided by this section shall be included in the tax expenditure budget pursuant to Section 7-1-84 NMSA 1978, including the annual aggregate cost of the deduction.

          C. As used in this section:

                (1) "affordable housing" means multifamily residential housing primarily for persons or households of low or moderate income;

                (2) "building" means a structure capable of being renovated or converted into affordable housing or a structure that is to be demolished and is located on land that is donated and upon which affordable housing will be constructed;

                (3) "low or moderate income" means a household in which the current annual income is at or below eighty percent of the area median income for the geographic area in which the household is located, adjusted for family size, as determined by the United States department of housing and urban development; and

                (4) "multifamily residential housing" means any building or portion thereof that is primarily occupied, or is designed or intended to be primarily occupied, as a residence by more than three households. "Multifamily residential housing" includes congregate housing and transitional or temporary housing for homeless persons."

     SECTION 2. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2026.

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