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HomeFinance NewsNew Mexico House passes tax package with updated income tax brackets.

New Mexico House passes tax package with updated income tax brackets.

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The New Mexico House Taxation & Revenue Committee has approved a massive tax package that includes a variety of tax credits and a major update to the state’s income tax brackets. This year’s tax package is a revised version of the previous year’s package, which had been vetoed by the governor. The proposed tax credits cover areas such as energy storage, rural health care practitioners, and assistance for New Mexicans who lost their homes in recent wildfires. The most significant change in the tax package is the restructuring of the state’s income tax brackets, with the aim of providing savings for the majority of New Mexicans.

The tax package proposes to break individual taxpayers and joint filers into three different income tax brackets, with a slightly lower tax rate for the majority of New Mexicans. Lawmakers estimate that most families can expect to save up to $200 under the new tax brackets. However, some Republicans in the House proposed further lowering the tax rate to just 1%, citing the state’s substantial oil and gas revenue. The proposed plan, if implemented, would cost the state $2 billion, whereas the current tax package only costs around $180 million. Despite the debates and proposals, the tax package was eventually approved by the House with bipartisan support.

The approval of the tax package marks a significant milestone in the legislative process, signaling a commitment to providing tax relief for New Mexicans while also managing the state’s budget responsibly. Lawmakers have emphasized the inclusion of major funding boosts for every state department in the state budget proposal, ensuring that the tax package aligns with broader financial considerations for the state. The tax package will now move forward for further consideration and potential revisions in the legislative process.

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