Home News Local News Anderson bill to double tax exemptions tabled

Anderson bill to double tax exemptions tabled

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State Rep. Phelps Anderson, DTS-Roswell, speaks to attendees at a November 2019 meeting of the Chaves County Federated Republican Women. (Daily Record File Photo)

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A proposal to increase existing state tax exemptions for low income New Mexicans who are blind and retirees on fixed incomes has been rejected by the House Taxation and Revenue Committee.

On Friday, the committee unanimously endorsed a motion to table House Bill 174 (HB 174). The measure, sponsored by state Rep. Phelps Anderson, DTS-Roswell, was tabled because it has a fiscal impact on the state budget. Anderson said that impact is between $1 million and $3 million on the state general fund.

The same bill was approved Feb. 10 in a 10-0 vote by the House Health and Human Services Committee. An identical bill Anderson introduced in 2020 met the same fate in the Taxation and Revenue Committee.

Anderson, who represents eastern Chaves as well as Lea and Roosevelt counties, expressed disappointment in the vote to increase the exemptions that have remained frozen at the same rate since 1987.

“After 34 years of not updating the low income tax exemption for elderly and blind New Mexicans, I am disappointed that this small tax reduction does not garner broad support,” he said.

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HB 174 would have hiked the maximum state income tax exemption for the elderly or blind from $8,000 to $16,000 for single individuals with a gross adjusted income of not more than $18,000.

Married couples filing separate returns with incomes of not more than $15,000 — and couples with a gross adjusted income of $30,000 — would be eligible for a tax exemption of $16,000.

Single filers 65 or older, or who are blind, and make up to $28,500, and married couples with as much as $51,000 of income could qualify for the deduction.

When he spoke to the committee, Anderson characterized his proposal as “straight-forward” and a modest way to help alleviate some of the pressure on those struggling under current economic conditions.

“This tax exemption helps the New Mexicans who need the help the most. Those New Mexicans who live on low or fixed incomes,” he said.

State Rep. Jason Harper, R-Rio Rancho, and a member of the committee, said given that the income thresholds have not adjusted with inflation, the number of individuals and couples claiming the exemption as well as those claiming the deduction have fallen sharply.

“I think the good question we need to consider is as this deduction, in its current form, continues to lose efficacy, is this something we need to remove from the code or is this something we should rework to improve its efficacy again,” Harper said.

Other members asked if there was an existing program or legislation that could achieve the same goal.

Anderson said he had not looked and for the time being, while other ideas for tax reform are under consideration, increasing the deduction for those who take advantage of it now is something long overdue and can offer some immediate relief.

Breaking news reporter Alex Ross can be reached at 575-622-7710, ext, 301, or breakingnews@rdrnews.com.

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