New Mexico advances bill exempting Social Security from income taxes
A proposal to exclude Social Security benefits from most New Mexicans’ personal income taxes advanced to its final committee Thursday as the final week of the 30-day budget session approached.
The bipartisan SB 108 was one of several bills introduced this session seeking exemption for Social Security income from personal taxes, and had the support of Gov. Michelle Lujan Grisham.
The Senate Tax, Business and Transportation Committee met at the Capitol Thursday to act on an omnibus package combining SB 108 with proposals to reduce gross receipts taxes, and extending and increasing a solar energy installation tax credit.
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SB 108’s Democratic co-sponsor, state Sen. Michael Padilla of Albuquerque, said, “It’s high time that we eliminate the tax on Social Security. … We’re one of only 12 states remaining that still tax Social Security. This is an issue that has faced a lot of New Mexico families in retirement.”
Padilla noted that 49 percent of New Mexico’s foster children are being raised by retired grandparents, as he himself was. The $80 million cost to revenue, he said, would be to spendable income for the greater benefit of the economy.
If it becomes law, the exemption would take effect in the current tax year.
The bill before the committee capped the exemption, however, at $75,000 for married couples filing separately, $150,000 for married couples filing jointly and $100,000 for individuals, meaning New Mexico would still tax Social Security benefits for some residents.
Republicans, the New Mexico Municipal League and some Democrats on the committee stripped out a proposed five-year moratorium on local GRT increases that had been added to the bill.
A proposed five-year moratorium on local GRT increases was stripped out of the bill after Republicans and the New Mexico Municipal League raised objects, beginning with state Sen. Gay Kernan, R-Hobbs, who said it would tie the hands of local governments and compromise public safety.
Sen. Peter Wirth, the Democratic Senate Majority Leader from Santa Fe, agreed with stripping out the moratorium and revisiting the issue at another time. An amendment removing the proposal easily passed with bipartisan support.
Nora Meyers Sackett, the governor’s press secretary, said, “We’re glad to see that the governor’s priorities of cutting GRT and eliminating the tax on social security benefits have bipartisan support and are moving forward — these measures will put more money back in the pockets of hardworking New Mexicans.”
The bill’s next stop will be in the Senate Finance Committee, which did not appear likely to hear it until the final week of the session, which ends at noon Feb. 17.
Algernon D’Ammassa can be reached at 575-541-5451, [email protected] or @AlgernonWrites on Twitter.