A bill sponsored by a local legislator to double a tax exemption for retirees and blind people on fixed incomes was temporarily tabled Monday in a legislative committee.
State Rep. Phelps Anderson, R-Roswell, the sponsor of House Bill 141, said the House Tax and Revenue Committee has put all bills that would cut taxes on hold, until they can find out the impact they would have on state recurring revenue.
The House Consumer and Public Affairs Committee voted 5-0 in favor of the measure last Wednesday.
Despite the Tax and Revenue Committee’s motion, Anderson said he is encouraged by comments of support from members.
House Bill 141 would increase the current maximum state income tax exemption for individuals who are 65 or older, or are blind, from $8,000 to $16,000 for single individuals with a gross adjusted income of not more than $18,000, according to the legislation.
Married individuals filing separate returns with incomes of not more $15,000, and couples filing jointly with a gross adjusted income of not over $30,000, would also be eligible for the $16,000 exemption.
Single individuals 65 or older, or who are blind, with incomes of up to $28,500; and married couples with up to $51,000 of income would be eligible for a lesser exemption.
Anderson said the exemption has not been increased since 1987 when it was developed.
“This is a simple tax reduction for New Mexicans who are 65 or older, living on fixed incomes and I believe the doubling of the exemption is timely and appropriate,” he said.
Anderson said he submitted the bill estimating that it will cost the state $1.1 million in revenue.
He added that he learned of a new estimate by the New Mexico Department of Taxation and Revenue at a meeting Monday that indicated the impact on the state’s revenues would be minimal.
Anderson said he feels it is important to enact legislation this session that will cut taxes. Far more ambitious proposals are circulating around the Roundhouse, including five different bills to either do away with taxes on Social Security or allow some New Mexicans to exempt a portion of their Social Security benefits from being taxed.
Most agree on the desire to do away with the tax on Social Security benefits — New Mexico is one of the few states to have one, but Anderson said the challenge is figuring a way to do so without significantly eroding the amount of revenue going into the state’s general fund.
Though he wants to do away with the state’s Social Security tax and support the most far-reaching proposal, Anderson said HB 141 is simple and if none of the others can muster support for passage, his bill will reduce taxes for some on fixed incomes.
“If we’re not willing to consider significant income tax (reductions), I at least want to achieve a reduction for those who are needing tax relief the most, those who have the highest need for tax relief,” Anderson said.
Breaking news reporter Alex Ross can be reached at 575-622-7710, ext. 301, or at email@example.com.