HOUSE BILL 85

47th legislature - STATE OF NEW MEXICO - second session, 2006

INTRODUCED BY

Justine Fox-Young

AN ACT

RELATING TO TAXATION; REDUCING THE TOP MARGINAL INCOME TAX RATES FOR THE 2006 AND 2007 TAXABLE YEARS; AMENDING AND REPEALING SECTIONS OF THE NMSA 1978.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     Section 1. Section 7-2-7 NMSA 1978 (being Laws 2005 (1st S.S.), Chapter 3, Section 2) is amended to read:

     "7-2-7. INDIVIDUAL INCOME TAX RATES.--The tax imposed by Section 7-2-3 NMSA 1978 shall be at the following rates for taxable years beginning [in] on or after January 1, 2006 [or 2007]:

          A. For married individuals filing separate returns:

     If the taxable income is:          The tax shall be:

Not over $4,000                         1.7% of taxable income

Over $ 4,000 but not over $ 8,000     $ 68.00 plus 3.2% of

                                        excess over $ 4,000

Over $ 8,000 but not over $ 12,000     $ 196 plus 4.7% of excess over $ 8,000

Over $ 12,000                           $ 384 plus [5.3%] 4.9% of excess over $12,000.

          B. For heads of household, surviving spouses and married individuals filing joint returns:

     If the taxable income is:          The tax shall be:

Not over $8,000                         1.7% of taxable income

Over $ 8,000 but not over $ 16,000     $ 136 plus 3.2% of                                         excess over $ 8,000

Over $ 16,000 but not over $ 24,000     $ 392 plus 4.7% of                                         excess over $ 16,000

Over $ 24,000                           $ 768 plus [5.3%] 4.9% of excess over $ 24,000.

          C. For single individuals and for estates and trusts:

     If the taxable income is:          The tax shall be:

Not over $5,500                         1.7% of taxable income

Over $ 5,500 but not over $ 11,000     $ 93.50 plus 3.2% of excess over $ 5,500

Over $ 11,000 but not over $ 16,000     $ 269.50 plus 4.7% of excess over $ 11,000

Over $ 16,000                           $ 504.50 plus [5.3%] 4.9% of excess over $ 16,000.

          D. The tax on the sum of any lump-sum amounts included in net income is an amount equal to five multiplied by the difference between:

                (1) the amount of tax due on the taxpayer's taxable income; and

                (2) the amount of tax that would be due on an amount equal to the taxpayer's taxable income and twenty percent of the taxpayer's lump-sum amounts included in net income."

     Section 2. REPEAL.--Laws 2005, Chapter 104, Section 4 is repealed.

- 3 -