New Mexico

State & Local Taxes in 2015

 

New Mexico Tax Code Features

Progressive Features

• Graduated personal income tax structure

• Provides a 10 percent refundable Earned Income Tax Credit (EITC)

• Provides a refundable low-income tax credit

• Sales tax base excludes groceries

Regressive Features

• Provides an income tax exclusion equal to at least half of capital gains income

• Fails to provide a property tax “circuit breaker” credit for low-income non-elderly taxpayers

Tax Changes Enacted in 2013 & 2014

• Enacted single sales factor apportionment

• Reduced Corporate income tax rate from 7.6 to 5.9 percent

• Limits the tax avoidance opportunities available to some “big box” retailers through the adoption of mandatory combined reporting for those companies

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, New Mexico has the 17th most unfair state and local tax system in the country. States with regressive tax structures have negative tax inequality indexes, meaning that incomes are less equal in those states after state and local taxes than before (See Ap­pendix B for state-by-state rankings and more details).

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