All Roll Calls
Yes: 80 • No: 15
New MexicoHB 2182025 Regular SessionHouseWALLET
TAX CHANGES
Sponsored By: Derrick J. Lente (Democratic)
Signed by Governor
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Bill Overview
Analyzed Economic Effects
82 provisions identified: 49 benefits, 14 costs, 19 mixed.
Angel investors get qualifying investment tax credits
Eligible accredited investors get up to 25% of qualified cash-for-equity investments, capped at $62,500 per investment. Investments must be made by December 31, 2030, in businesses meeting New Mexico location, research or manufacturing, and other qualification requirements. Claims cover one investment per round and no more than five businesses per tax year; yearly approvals total $2 million. Applications are due within one year after the investment year, and claims generally within one year after approval. The credit only offsets income tax, unused amounts carry forward five years, and specified related-party compensation disqualifies an investment.
Annual tax credit for adoptive families
Eligible New Mexico taxpayers get a refundable $1,500 yearly credit for each adopted child certified as difficult to place. The child must qualify as their federal tax dependent, and taxpayers cannot be another taxpayer’s dependent. Certification comes from the Children, Youth and Families Department or a licensed child placement agency. Certifications based on impairment or emotional disturbance require a condition that is at least moderately disabling. Eligible married taxpayers filing separately each get half the joint-return credit.
Building owners keep unused tax credits
Individual taxpayers can carry unused 2015 sustainable building credits forward for up to seven consecutive tax years. Building owners must provide the state eligibility certificate and required credit information. Business co-owners claim only their ownership share, and certain related energy credits cannot cover the same system. Married people filing separately, when eligible to file jointly, each receive half the joint credit amount.
Property owners get geothermal heat pump credits
Eligible individual income taxpayers get 30% of geothermal heat pump purchase and installation costs, up to $9,000. Excess credit is refundable. Systems must be bought and installed after May 15, 2024, and before December 31, 2034, on owned New Mexico property. State certification and a nationally accredited installer are required; complete applications receive consideration in order, within a $4 million yearly cap. A system used for the 2021 sustainable building credit cannot also qualify.
Refundable solar tax credits for property owners
Eligible property owners get 10% of certified solar system costs, up to $6,000 per taxpayer per tax year. Excess credit is refundable, and certified credits can be sold or transferred. Systems must be purchased and installed starting March 1, 2020, on qualifying New Mexico property, including leased tribal property. State certification is capped at $30 million yearly beginning in 2024; eligible tax years end before January 1, 2032. Claims are due within 12 months after the installation year, or certification year for the special 2020–2023 allocation.
Rural health practitioners get service tax credits
Eligible health practitioners serving qualifying rural underserved sites get annual income tax credits of up to $5,000 or $3,000. The amount depends on practitioner type, and the full credit requires at least 1,584 service hours. Service of 792 to fewer than 1,584 hours earns half the applicable amount. A New Mexico Department of Health certificate is required, and unused credit carries forward for three consecutive tax years.
Wildfire survivors get home rebuilding tax credits
Eligible taxpayers get up to $50,000 per replacement home after subtracting insurance and other compensation, including federal fire assistance. The original home must have burned in 2021–2023; its replacement must occupy the same New Mexico property and be the taxpayer’s home most of the year. Costs must be incurred from May 15, 2024, through December 31, 2029. Certification applications are due within 12 months after the construction year, and claims within 12 months after certification. Yearly certifications are capped at $5 million; the credit is nonrefundable, with unused amounts carried forward up to three years.
Audited businesses can avoid duplicate taxes
After a department or managed audit, the department can credit gross receipts tax with compensating tax already paid. The business must show that the purchaser timely paid compensating tax on the same property or services. The purchaser must give up the right to a refund of that tax. The credit cannot exceed either the gross receipts tax owed or the compensating tax paid.
Dairy and feedlot owners get biomass credits
Corporate taxpayers owning dairies or feedlots get $5 per wet ton of qualifying manure sent for commercial power or fuel production. Eligibility certificates are required for tax years ending before January 1, 2030. This credit and the agricultural biomass income tax credit share a $5 million yearly certification cap; the same biomass cannot support both. Unused credits carry forward up to three consecutive years. Certificates can be transferred when both parties notify the tax department within 10 days.
Liquor license businesses get temporary deductions
Qualifying liquor license lessors can deduct up to $50,000 of eligible receipts yearly for up to four tax years before 2026. Separately, qualifying dispenser license holders can deduct up to $50,000 of alcoholic-beverage sales receipts per license for 2022–2025. Both require holding the license on June 30, 2021; dispenser licenses require off-premises sales below 50% of total alcohol sales. For lessors, eligible married separate filers each claim half the joint deduction, and partnership or LLC owners claim proportional shares. These amounts reduce the tax base; they are not dollar-for-dollar tax savings.
Small retailers get holiday sales deductions
Before July 1, 2025, eligible small retailers can deduct specified sales on the first Saturday after Thanksgiving. The sales window runs from 12:01 a.m. through midnight, and each qualifying item must cost less than $500. The retailer’s primary business location must be in New Mexico. It must have had no more than 10 employees at any time during the previous fiscal year. Franchise businesses do not qualify.
Families can deduct additional dependents
Eligible filers can deduct $4,000 from New Mexico taxable income for each dependent after the first. You must file jointly or as head of household, and no one else can claim you as a dependent. This deduction applies while the federal personal exemption amount is zero. It lowers taxable income, not your tax bill by $4,000.
Taxpayers gain duplicate-tax and lien protections
The tax department can refund or credit an assessment when someone already paid tax on the same transaction for the taxpayer. A timely refund claim and legal requirements for crediting that earlier payment must be satisfied. Relief can include penalties and interest; the department can require the earlier payer to waive refund rights. Separately, a covered state tax lien ends 10 years after the filing date on its notice. Its taxes, penalties and interest are then treated as paid, and the lien cannot be enforced.
Late filers can lose tax credits
An income tax credit or rebate is lost when first claimed after the law’s deadline. That deadline is the end of the third calendar year after the year the eligible return was initially due. This limit does not apply to the credit for income taxes paid to another state. Specific credits can also have their own claim deadlines.
SNAP application notices for low-income taxpayers
Taxpayers with income within 130% of federal poverty guidelines must receive general SNAP eligibility and application information. The tax department includes it with a refund or another notice. The Health Care Authority must supply the information by January 30 each year. The notice does not enroll anyone or award grocery benefits.
No extra fee for duplicate recordings
You do not owe an extra recording fee for a duplicate instrument when the original is unavailable. You must include the required affidavit. Any fee for recording the original still applies.
Audited taxpayers can offset tax debts
When an audit finds overpayments and underpayments of the same tax across several periods, taxpayers can request an offset. They must file a refund claim. The department must apply overpayments to the earliest underpayments first and refund any remaining balance. An underpayment counts as paid in the later of the overpayment period or the period when credit is applied.
State income tax deadlines match federal deadlines
Covered individuals must file their New Mexico income tax return and pay by their federal return’s due date. This covers residents and people earning income from New Mexico business transactions, property or employment. They must be required to file federally and required to file or pay under state income tax law. People exempt from New Mexico income tax are not covered.
Teachers can deduct classroom supply costs
Licensed public school teachers can deduct qualifying supplies bought for students' educational use. The limit is $500 for tax years beginning in 2024 and $1,000 annually for 2025 through 2028. Teachers claimed as someone else's dependent cannot use this deduction. Computers, certain other electronics, furniture, office equipment, and other listed items do not qualify. The deduction lowers taxable income, not taxes dollar for dollar.
Businesses can use alternative deduction proof
Gross receipts deduction claimants can use alternative proof when they lack a properly completed nontaxable transaction certificate. They must prove the facts supporting the deduction. This option excludes electricity or fuel sellers with the specified tax department agreement covering their energy-sale deduction.
Low-tax businesses get flexible payment timing
The tax secretary can set longer reporting and payment intervals for taxpayers expecting to owe less than $500 monthly. This flexibility requires a rule from the secretary. Intervals cannot exceed one year unless another law allows more time. The amount of tax owed does not change.
Monthly funding for public election programs
The law directs $100,000 each month to the Public Election Fund from the specified state deposits. The money supports the election program, not direct household payments.
New state fund for veterans’ cemeteries
The law creates the Veterans’ State Cemetery Fund in the state treasury. It accepts appropriations, gifts, grants, donations, and optional income tax refund contributions. Money is appropriated to the Veterans’ Services Department to administer the fund. Unspent balances stay in the fund, and no funding amount is specified.
More funding for retiree health care
The Retiree Health Care Fund receives monthly payments equal to one-twelfth of 112% of the previous fiscal year’s total distribution. This increases fund support, not individual retirees’ stated benefit amounts. The law does not change individual eligibility through this provision.
Payment deadlines for hospitals serving Medicaid
The hospital Medicaid-directed payment program and its distribution require federal approval. Managed care organizations must pass payments to hospitals within 15 days of receiving them. For July–December 2024, state rate-increase and quality payments were due March 15 and May 15, 2025, respectively. For 2025 onward, the state must transfer rate-increase funding within 75 days after each quarter. Quality incentive payments are due by May 15 of the following year.
Aircraft businesses get sales tax deductions
Aircraft manufacturers and affiliates can deduct aircraft sales and flight-support, pilot-training and maintenance-training receipts. Businesses can also deduct aircraft-parts sales and maintenance of aircraft or their parts. For these deductions, the existing aircraft deduction identified by the law must be taken first. Sales, maintenance and modifications of commercial or military carriers also qualify when gross landing weight exceeds 10,000 pounds. These deductions lower businesses’ taxable receipts, not household income taxes.
Border trade firms get tax deductions
Qualifying customs brokers and freight forwarders can deduct receipts from operations near the New Mexico-Mexico border. Firms must have first located in New Mexico within 20 miles of a border port during 2016 through 2020. They must employ at least two New Mexico workers. The deduction covers qualifying receipts received during the five years starting on the firm's location date.
Companies get sustainable building improvement credits
Corporate building owners and transferred-credit recipients can claim 2021 sustainable building credits for tax years ending before January 1, 2028. Certified new construction, commercial renovations and energy-saving installations qualify; amounts depend on project type, size and standards. Commercial renovations require buildings at least 10 years old, 20,000 square feet of temperature-controlled space, and 50% energy-cost savings against the stated standard. Yearly category caps range from $250,000 to $2.9 million; unused capacity can shift categories that year, but not years. Certificates can transfer at full value, unused credits carry forward seven years, and specified competing building credits cannot cover the same building.
Companies retain older sustainable building credits
Companies can claim 2015 sustainable building credits for qualifying New Mexico work completed before April 1, 2023. Claims cover tax years ending by December 31, 2024; amounts depend on building type, certification and occupied space. Yearly certificate caps are $1.25 million for commercial buildings, $3.375 million for non-manufactured homes and $375,000 for manufactured housing. Unused credits carry forward up to seven consecutive tax years. State certification is required, and specified building or solar credits cannot also cover the same building or system.
Compliant fuel businesses can avoid bonds
Gasoline taxpayers and special fuel suppliers can request bond exemptions after 24 consecutive months without delinquency under their applicable tax law. Approved exemptions start on the first day of the following month. The tax department can end an exemption after a later delinquency. Termination cannot take effect until at least 10 days after written notice.
Corporate tax deadlines follow federal dates
Covered corporations must file New Mexico corporate returns and pay tax by their federal corporate income tax return deadline. Franchise tax filing and payment deadlines are tied to the corporate income tax payment date for the preceding tax year. These rules change timing, not the amount owed.
Corporations get geothermal heat pump credits
For tax years beginning in 2024 or later, corporations can claim refundable geothermal heat pump credits on property they own. The credit covers up to 30% of purchase and installation costs, capped at $9,000 per taxpayer. Purchase and installation must occur after May 15, 2024, and before December 31, 2034. Systems need state energy department certification and installation by a nationally accredited ground source heat pump installer. Annual certifications are capped at $4 million; the same system cannot also receive the 2021 sustainable-building corporate credit.
Defense research contractors get tax deductions
Before January 1, 2031, qualified contractors can deduct receipts from directed-energy or satellite research services and inputs. Sales must be under Defense Department contracts entered into on or after January 1, 2016. Congressionally designated national laboratories do not qualify. New Mexico national laboratory operators qualify only for receipts unrelated to operating the laboratory.
Employers get credits for high-wage jobs
Eligible employers get a refundable credit of 8.5% of wages, capped at $12,750 per job per qualifying period. It covers an initial 12-month period and up to three more consecutive periods. Jobs must be created before July 1, 2026, and occupied for at least 44 weeks per period. Workers must live in New Mexico at hire or within 180 days. The wage minimum is $60,000 in class H counties and in or within 10 miles of cities with at least 60,000 people; elsewhere, it is $40,000. Employers must qualify under fiscal year 2019 development-training policies and meet employment-growth, worker, transaction, and location requirements. Annual applications are due December 31 of the following calendar year.
Equipment sellers can deduct half their receipts
Sellers can deduct 50% of qualifying receipts from agricultural implements, farm tractors, aircraft, and vehicles not requiring state registration. For agricultural implements, buyers must state in writing that they regularly farm or ranch. Sellers must take the separately specified statutory deduction first, before calculating this deduction.
Equipment tax credits for New Mexico manufacturers
New Mexico manufacturers can claim an investment tax credit for qualified equipment. For equipment subject to compensating tax, the credit equals the equipment’s value times the applicable tax rate. For sales subject to gross receipts tax, it equals the seller’s receipts times applicable state and local rates. If neither tax applies, the credit uses the equipment’s value and the state gross receipts tax rate.
Gasoline taxes fund local transportation needs
The law distributes 10.38% of net gasoline-tax receipts: 90% to municipalities and class H counties, and 10% to counties. Shares follow taxable fuel sales, with the county portion based on sales outside municipalities and applicable pledges and adjustments preserved. That money generally funds roads and bridges; municipalities under 3,000 residents and counties under 4,000 can use general funds. A separate 5.76% municipal distribution uses prior-year taxable gallons, a $417 monthly floor, and a 15% redistribution pool. That pool fills floor shortfalls first, then supports remaining municipalities under 200,000; permitted uses include roads, transportation matches, transit, and emissions inspections.
Geothermal power producers get tax credits
Eligible owners and leaseholders get 1.5 cents per kilowatt-hour generated at qualifying New Mexico geothermal power plants. New plants must begin construction on or after January 1, 2025; existing plants must at least double geothermal generation on or after that date. State energy department certificates are issued in application order, within a combined $5 million annual corporate and individual credit cap. Credits apply to tax years ending before January 1, 2032. Unused credits can carry forward for up to three consecutive years.
Geothermal power projects get tax breaks
Qualifying New Mexico geothermal facilities earn $0.015 per kilowatt-hour for tax years ending before January 1, 2032. New facilities must start construction on or after January 1, 2025; existing facilities must at least double generation starting then. State-certified personal and corporate credits share a $5 million yearly cap, with unused credits carried forward up to three years. Before July 1, 2032, qualifying project sales, leases, services, property and construction costs also receive gross receipts or compensating tax deductions. Gross receipts deductions require a buyer’s tax certificate or approved alternative evidence.
Local governments receive cannabis tax shares
Municipalities receive 33.33% of net cannabis excise tax receipts attributed to businesses within their boundaries. Counties receive the same share from businesses outside municipalities. The state can deduct up to 3% of these distributions for reasonable administration costs. Municipal payments remain subject to statutory distribution adjustments.
Manufacturing suppliers can deduct qualifying sales
Sellers can deduct qualifying manufacturing sales from gross receipts or governmental gross receipts. Component deductions cover goods incorporated into manufactured products and require the buyer’s nontaxable transaction certificate. Manufacturing consumables sold to manufacturers or manufacturing service providers qualify with that certificate or approved alternative evidence. Utility sellers of consumables also need the required tax department agreement and transaction certificate.
Medical sellers get qualifying sales deductions
Sellers can deduct qualifying prescription-drug and medical cannabis sales from gross receipts and governmental gross receipts. Prescription drugs must meet the law’s dispensing, prescription and sales restrictions. Cannabis sales must comply with New Mexico’s medical cannabis law. Licensed Medicare durable medical equipment providers can also deduct oxygen and oxygen-service receipts. These are seller tax deductions, not changes to Medicare coverage or guaranteed customer discounts.
Nonprofit supplemental health plans avoid taxes
Premiums from qualifying supplemental health plans are exempt from New Mexico's insurance premium tax. The insurer must have federal tax-exempt status as a 501(c)(3) nonprofit. The law does not specify whether insurers pass the savings to plan buyers.
Oil producers gain duplicate tax protections
The emergency school tax cannot be levied twice on the same oil or gas product. The production property tax also cannot be levied twice on the same product. Reporting already-taxed products under the emergency school tax remains subject to department rules. The production equipment property tax is the only property tax allowed on equipment used at a production unit. Any additional property tax on that equipment is void.
Rail carriers get locomotive fuel deductions
Common carriers can deduct qualifying locomotive fuel from gross receipts or compensating tax after meeting either investment threshold. One option requires at least $100 million in relevant refueling-facility construction or renovations after July 1, 2011. The other requires at least $50 million in qualifying New Mexico railroad improvements on or after July 1, 2012. Regulator-required corrective work and regular or preventive maintenance do not count toward qualifying infrastructure improvements. Gross receipts deductions require the carrier to give the seller a nontaxable transaction certificate.
Restored oil production gets tax relief
Qualifying restored production of oil, natural gas, and other liquid hydrocarbons is exempt from severance tax for its first 10 production years. The exemption applies when the specified 12-month average West Texas Intermediate oil price is below $24 per barrel.
Some businesses avoid municipal sales taxes
Qualifying business receipts are exempt from supplemental municipal and municipal local-option gross receipts taxes. The business must sit outside the municipality's boundaries on land the municipality owns. The state must also make a gross receipts tax distribution for that land.
Special fuel users can claim refunds
Special fuel tax refunds cover qualifying school-bus, off-road, auxiliary-equipment, and vehicle-mounted non-automotive uses. Eligible use and highway propulsion must draw fuel from the same tank. Vehicles must be registered with the tax department, and users must be registered for gross receipts tax reporting and payment. Users must provide satisfactory proof. Each claim must cover at least 100 gallons and can be filed no more often than quarterly.
Tax deduction for wholesale telecom providers
Providers can deduct receipts from qualifying interstate telecommunications services provided in New Mexico from their interstate telecommunications taxable receipts. The buyer must use the service to provide telephone or telegraph services to the final user. The buyer must also be subject to interstate telecommunications gross receipts tax, gross receipts tax, or compensating tax.
Tax revenue supports local assistance funds
The Small Cities Assistance Fund receives 15% of net compensating-tax receipts; the Small Counties Assistance Fund receives 10%. Both shares are subject to statutory distribution adjustments. Qualifying counties also receive equalization payments each September 15 after imposing or continuing the specified county gross receipts tax. The formula uses population share and the annual sum, minus receipts attributable to a one-eighth-percent county tax. Months without that county tax count as zero receipts, and no payment is made when the result is zero or negative.
Quarterly fees for workers and employers
Beginning January 1, 2026, covered employees owe $2 each quarter, deducted from wages. Employers covered by, or choosing coverage under, the Workers’ Compensation Act also owe $2.30 per covered employee quarterly. The count uses employees covered on the quarter’s last working day. Fees are due by the 25th of the next month. Of the employer fee, $0.30 per employee goes to the uninsured employers’ fund.
Agencies pay refund debt collection fees
Claimant agencies in the Tax Refund Intercept Program must pay an administrative fee equal to 3% of their debts. The tax department uses the fee revenue to run the program. This provision does not impose an additional personal fee on taxpayers.
Alternative fuel distributors pay gallon-based taxes
Distributors pay alternative fuel tax when fuel enters a vehicle's supply tank for use on New Mexico highways. The rate is 13.3 cents per gallon for compressed natural gas and 20.6 cents for liquefied natural gas. Other alternative fuel is taxed at 12 cents per gallon. Payment is triggered by dispensing or delivery into the tank, not acquisition for distribution.
Large taxpayers must pay taxes electronically
Taxpayers must pay electronically for each tax group whose average payment reached $25,000 in the preceding calendar year. The average equals that group's total yearly payments divided by the number of months when a payment was due. The four groups cover withholding, gross receipts and related taxes; oil and gas taxes; natural gas processors tax; and specified fuel taxes and petroleum loading fees. Electronic payments must make funds immediately available to New Mexico by the due date. This changes how taxpayers pay, not how much tax they owe.
Local distributions face debt and reporting holds
The state must reduce or redirect designated local distributions when directed under the State Aid Intercept Act. Redirection to the Finance Authority requires a local ordinance or resolution and written agreement to pay debt or other obligations. Earlier intercepts and redirections take priority over later tax department recoveries. The finance secretary can also direct temporary withholding when a recipient misses a required audit or financial report. Withheld money stays in the tax administration suspense fund until the secretary orders its release.
Natural gas processors pay value-linked taxes
Processors pay tax on natural gas delivered to plant inlets, measured in million British thermal units, after allowed deductions. The rate is $0.0065 per unit times the prior year’s average New Mexico taxable gas value per thousand cubic feet divided by $1.33. The result is rounded to the nearest $0.01 per unit; processors receive the next fiscal year’s rate by June 15. Deductions cover processing use, gas returned to its producing lease, lawful flaring, and losses from malfunctions or events beyond control. Tribal nations and individuals are liable only to the extent allowed by law.
Oil taxpayers must make advance payments
Taxpayers with monthly severance, conservation, or emergency school tax liability must make annual advances based on applicable average tax. Ad valorem production taxpayers also owe advances; their average uses net tax paid during the 12 months ending March 31, divided by months with tax paid. After receiving the department's statement, payment is due by the 25th of the month of the first filed or amended return. No advance is due with a final return or in a year without liability. Severance taxpayers can credit the prior month's advance; the other listed taxes allow credit for the prior year's advance. Unused advances remain creditable when liability resumes, and advancing the regular due date before the 25th of the second month after production ends the requirement.
Production owners owe value-based oil taxes
Oil and gas interest owners owe an ad valorem production tax on assessed product value when products are severed and sold. Each owner owes the share tied to their ownership interest. The state finance department certifies the rate, which applies monthly until replaced. Tribes, pueblos, and individual Indians are liable only to the extent the law permits.
Production payments require withholding and reports
Operators must withhold taxes due from payments to owners for their share of production value. These duties include severance, conservation, and emergency school taxes; purchasers paying under operator agreements also must withhold. The tax department can require other purchasers to withhold, and taxpayers paying an owner's tax can recover it from that owner. Emergency school tax returns must report each production unit's monthly product value, volume, and type, with tax paid alongside the return. Returns are due the 25th day of the second following month; the department can require additional information.
Separate reporting for biodiesel tax deductions
Taxpayers deducting biodiesel from special fuel received in New Mexico must report that amount separately with their return. Reporting must follow the tax department’s instructions. This duty applies to deduction claimants, not fuel users generally.
Some local tax replacement payments shrink
Beginning July 1, 2025, covered local payments tied to food and health practitioner tax deductions decline annually. The schedule is 28% of the maximum in 2025–26, then 21%, 14%, and 7%, ending July 1, 2029. Without a hold-harmless tax on June 30, 2019, municipalities under 10,000 and counties under 48,000 retain the applicable maximum. Larger municipalities in that no-tax group receive 80%, 50%, or 30%, based on poverty compared with the state level. A safeguard protects impaired payment obligations on qualifying bonds outstanding before July 1, 2022, capped by the June 30, 2022 formula.
State recovers past local revenue overpayments
The state can recover negative prior-period adjustments exceeding the greater of $100 or 20% of a local recipient’s average payment. The calculation excludes net amounts older than the three calendar years before the current year. Recipients get notice, access to review the refund claim, and interest-free repayment agreements lasting up to 72 months. Without action within 90 days, recovery generally comes from up to six later distributions. A 50%-of-average-payment limit applies to larger recoveries, subject to a State Board of Finance waiver.
Voter-approved business tax for municipal bonds
Municipalities can tax business gross receipts at up to 1% to repay supplemental municipal gross receipts bonds. Rates below 1% must use 0.25% steps. A majority of elected governing-body members must approve an ordinance. Voters must approve both the tax and bonds of up to $9 million. Businesses owe the tax only where it is adopted.
County taxes get voter review rules
Counties adopting local-option gross receipts taxes must choose a referendum process or require voter approval before the tax starts. Without charter referendum rules, the petition route requires filing within 60 days and signatures from 5% of registered voters at the last general election. The preapproval route requires the county to call an election within 75 days of adoption. Taxes generally start the first July 1 after at least three months following delivery to the tax department. A governor-declared emergency or certified unforeseen reserve shortfall allows qualifying taxes to start January 1 after the required three-month notice.
Filers can direct refunds to listed causes
Individuals can direct part or all of an eligible income tax refund to listed funds or groups. This gives taxpayers a donation option but reduces the cash refund they keep by the amount directed. Both spouses must make the designation on a joint return. Refunds subject to interception are ineligible, and directions exceeding the refund are disregarded. A contribution to a qualifying state political party is limited to $2.
Refund donations follow new distribution rules
Voluntary refund donations go dollar for dollar to designated recipients, including healthy soil, housing, veterans’ cemetery, and political-party purposes. Veterans’ cemetery contributions begin after Santa Fe receives the balance of refund contributions totaling $1.07 million. The treasurer must forward political-party contributions within 10 days of receiving them from the tax department. A donation choice receiving less than $10,000 for three straight certified years is repealed. It leaves the tax form on January 1 after the third certification.
Tax refunds can repay outstanding debts
The state can apply a taxpayer’s credit, rebate or refund to that person’s tax debt, reducing both debt and cash received. The taxpayer must receive notice and earns interest until the debt receives the offset. Excess payments tied to a return or assessment can also pay other liabilities under the related tax acts, without a refund claim. After reviewing original or amended returns, the department can refund qualifying excess payments without a separate claim. That refund authority covers income, corporate income and franchise, estate, special fuels excise, and oil and gas taxes, subject to the statutory overpayment threshold.
Local tax data access requires safeguards
Authorized local officials can obtain specified taxpayer identities and gross receipts information for local tax work. Requests must cover a period within the prior 12 months and include a written agreement limiting use and protecting confidentiality. Officials and employees must complete privacy training before receiving the data. Federal authorization is required before sharing taxable gross receipts ranges. Local governments can inspect distribution-adjustment records, but disputed adjustment information remains limited to authorized officials, employees, and courts.
Hospital assessments with patient billing protections
The hospital assessment funds Medicaid payments and applies to inpatient days and outpatient revenue only with required federal approvals. Federal hospitals, state university teaching hospitals, and state-owned special hospitals are excluded. Rural and special hospitals get 50% rate reductions; small urban hospitals get 90% reductions, adjustable to meet waiver requirements. Total assessments cannot exceed the lesser of specified funding needs or the federal indirect-guarantee limit. Hospitals cannot list the assessment separately on patient or insurer bills, but can reflect costs elsewhere in their charges.
County hospital taxes need voter approval
Counties meeting statutory population and taxable-value categories can impose a 0.125% hospital gross receipts tax after majority voter approval. Each term lasts no more than five years, with successive terms allowed through later ordinances. Depending on the county category, money supports county hospital operations and care for sick and indigent people. For the specified class B county category, money instead funds county ambulance transport or rural health clinic operations.
County receipt taxes fund Medicaid care
Counties can impose a 0.0625% gross receipts tax for their county-supported Medicaid fund without a referendum. Counties with more than 500,000 people can add another 0.0625% for indigent-patient support. That extra tax had an initial end date no later than June 30, 2009. It can continue in five-year periods after a review of need and majority approval by the county governing body.
County road funding rewards timely reporting
Half of County Government Road Fund distributions follow certified road miles; the rest follows population or taxable gasoline gallons. Counties below 400 certified miles get a 50% mileage boost in the formula. Missing April 1 certification cuts monthly payments by one-third for that fiscal year, redistributed equally among counties that certified. Class A and H monthly payments are capped at one-twelfth of prior-year taxable gasoline gallons multiplied by $0.01. Money must support county roads and bridges, including land rights and materials.
District base resets require returning revenue
A development district can revise its tax base period once during its lifetime. No gross receipts tax increment bonds can have been issued, and qualifying developer or local-government objections must be resolved. The State Board of Finance must find the change reasonable and in the state’s best interest. The district must return increments credited between collection and the revised base period’s end. The state returns that money proportionally to the taxing bodies that dedicated it.
Fuel loading fees include biodiesel relief
Distributors pay a $150 loading fee per chargeable 8,000-gallon load of gasoline or special fuel. It covers fuel loaded in New Mexico or imported for resale or use, unless the fee was already paid. Taxpayers can exclude biodiesel gallons delivered to a rack operator for later blending or resale. They must report that deduction separately with their return.
Local business tax funds water systems
A municipality in a class B county can adopt a voter-approved business gross receipts tax of up to 0.25%. Its latest federal census population must exceed 20,000 but be below 25,000. Revenue must repay federal water-delivery loans, then can fund system expansion, operation, and maintenance. The money cannot repay bonds.
Manufacturing equipment gets a tax deduction
Sellers and lessors can deduct receipts from equipment sold or leased to manufacturers and manufacturing service providers. Equipment must be used directly in manufacturing. Buyers must provide a nontaxable transaction certificate or qualifying alternative proof. Buyers cannot also claim an Investment Credit Act credit for the same equipment.
New rules for municipal revenue shares
Municipal distributions use a 1.225% factor and qualifying business receipts, excluding receipts from licensed nonprofit hospitals. Dedicated development-district tax increments can adjust the distribution. Contiguous tribal lands can count when a municipality provides substantially similar services under a contract with the tribe or pueblo. The municipality must submit that contract to the tax department.
New tax calculations for redevelopment funding
Redevelopment funding uses gross receipts taxes sourced to each area, with revenue above a base amount shared under dedicated percentages. For metropolitan redevelopment areas, local governments submit boundaries and the state assigns a reporting code. The following 12 reporting months establish the base; distributions require a later 12-month period to exceed it. Development districts count applicable later-added taxes in their base as though those taxes already applied. These rules divide revenue between redevelopment projects and participating taxing bodies, rather than directly changing household tax bills.
Oil producers face tax valuation rules
For emergency school and production property taxes, the department can value oil and gas traded between affiliates or outside arm’s-length sales. It can also set values when none are established, using comparable products from the same field or area. Equipment’s taxable value equals 27% of the production unit’s prior-calendar-year product value. The uniform assessment ratio and certified tax rate then determine equipment tax. These valuation rules can produce higher or lower liabilities depending on transaction values and production.
Oil producers face taxes with discounts
Covered oil and gas products severed and sold face a general severance tax of 3.75% of taxable value. Enhanced-recovery projects, workovers, and stripper wells can receive lower rates based on project classification and statutory price or value thresholds. The separate emergency school tax is 3.15% for covered products other than natural gas, which is taxed at 4%. Qualifying stripper-well oil rates are 1.58% at $15 per barrel or less, and 2.36% above $15 through $18. Qualifying stripper-well gas rates are 2% at $1.15 per thousand cubic feet or less, and 3% above $1.15 through $1.35. These emergency school tax thresholds use the calendar year's average taxable value preceding July 1 of the applicable fiscal year.
Redevelopment bonds face revenue dedication limits
Local taxing bodies can pledge specified redevelopment tax revenue by majority-vote resolution, but no body can dedicate over 75% of its increment. The State Board of Finance can dedicate state revenue, also capped at 75%. Beginning July 1, 2029, the state amount cannot exceed the applicable average of dedicated municipal and county option increments. State-backed bonds must be issued within four years of the dedication resolution. They also require Finance Authority review for consistency with the district plan and a law authorizing issuance and the maximum amount.
Two Pueblos can share gasoline taxes
Beginning July 1, 2025, the transportation secretary can make tax-sharing agreements with the Pueblos of Nambe and Santo Domingo. Each must fully own a qualifying registered tribal distributor. Agreements provide 40% of gasoline tax revenue paid on 2.5 million gallons each month, for up to 20 years. In exchange, the tribe or distributor cannot distribute gasoline for resale outside its New Mexico reservation, pueblo grant, or trust land. The tribe must also forgo the specified gasoline tax deduction.
Sponsors & Cosponsors
Sponsor
Derrick J. Lente
Democratic • House
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
Senate vote • 3/17/2025
Final Senate Vote
Yes: 30 • No: 4
House vote • 2/15/2025
Final House Vote
Yes: 50 • No: 11
Actions Timeline
Signed by Governor - Chapter 130 - Apr. 9
4/9/2025SenateHouse has concurred with Senate Amendments
3/19/2025HousePassed in the Senate - Y:30 N:4
3/17/2025SenateSFC: Reported by committee with Do Pass recommendation with amendment(s)
3/14/2025SenateSTBTC: Reported by committee with Do Pass recommendation with amendment(s)
3/12/2025SenateSent to STBTC - Referrals: STBTC/SFC
2/17/2025SenatePassed in the House of Representatives - Y:50 N:11
2/15/2025HouseHTRC: Reported by committee with Do Pass recommendation
2/7/2025HouseSent to HTRC - Referrals: HTRC
1/29/2025Senate
Bill Text
Final Version
4/10/2025
SFC Committee Report 3/14/25
3/14/2025
STBTC Committee Report 3/12/25
3/12/2025
HTRC Committee Report 2/07/25
2/7/2025
Introduced
1/29/2025