46th legislature - STATE OF NEW MEXICO - first session, 2003
RELATING TO TAXATION; REDUCING INCOME TAX RATES; EXPANDING THE CAPITAL GAINS DEDUCTION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 7-2-7 NMSA 1978 (being Laws 1994, Chapter 5, Section 20, as amended) 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 any
taxable year beginning [on or after January 1, 1998] in 2003:
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 but not over $ 20,000 $ 384 plus 6.0% of excess over $ 12,000
Over $ 20,000 but not over $ 32,000 $ 864 plus 7.1% of excess over $ 20,000
Over $ 32,000 [but not over $ 50,000]$ 1,716 plus [7.9%] 7.7% of
excess over $ 32,000
[Over $ 50,000 $ 3,138 plus 8.2% of excess over $ 50,000].
B. For 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 but not over $ 40,000 $ 768 plus 6.0% of excess over $ 24,000
Over $ 40,000 but not over $ 64,000 $ 1,728 plus 7.1% of excess over $ 40,000
Over $ 64,000 [but not over $100,000]$ 3,432 plus [7.9%] 7.7% of excess over $ 64,000
[Over $100,000 $ 6,276 plus 8.2% of
excess over $100,000].
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 but not over $ 26,000 $ 504.50 plus 6.0% of excess over $ 16,000
Over $ 26,000 but not over $ 42,000 $1,104.50 plus 7.1% of excess over $ 26,000
Over $ 42,000 [but not over $ 65,000]$2,240.50 plus [7.9%] 7.7% of
excess over $ 42,000
[Over $ 65,000 $4,057.50 plus 8.2% of
excess over $ 65,000].
D. For heads of household filing returns:
If the taxable income is: The tax shall be:
Not over $7,000 1.7% of taxable income
Over $ 7,000 but not over $ 14,000 $ 119 plus 3.2% of
excess over $ 7,000
Over $ 14,000 but not over $ 20,000 $ 343 plus 4.7% of
excess over $ 14,000
Over $ 20,000 but not over $ 33,000 $ 625 plus 6.0% of
excess over $ 20,000
Over $ 33,000 but not over $ 53,000 $1,405 plus 7.1% of
excess over $ 33,000
Over $ 53,000 [but not over $ 83,000]$2,825 plus [7.9%] 7.7% of
excess over $ 53,000
[Over $ 83,000 $5,195 plus 8.2% of
excess over $ 83,000].
E. 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. Section 7-2-7 NMSA 1978 (being Laws 1994, Chapter 5, Section 20, as amended and as further amended by Section 1 of this act) is repealed and a new Section 7-2-7 NMSA 1978 is enacted to read:
"7-2-7. [NEW MATERIAL] INDIVIDUAL INCOME TAX RATES.--The tax imposed by Section 7-2-3 NMSA 1978 shall be at the following rates for any taxable year beginning on or after January 1, 2004:
A. For married individuals filing separate returns:
If the taxable income is: The tax shall be:
Not over $7,500 1.7% of taxable income
Over $ 7,500 but not over $ 12,000 $ 127.50 plus 3.2% of excess over $ 7,500
Over $ 12,000 but not over $ 22,500 $ 271.50 plus 4.7% of excess over $ 12,000
Over $ 22,500 $ 765 plus 5.5% of excess over $ 22,500.
B. For surviving spouses and married individuals filing joint returns:
If the taxable income is: The tax shall be:
Not over $15,000 1.7% of taxable income
Over $ 15,000 but not over $ 24,000 $ 255 plus 3.2% of
excess over $ 15,000
Over $ 24,000 but not over $ 45,000 $ 543 plus 4.7% of excess over $ 24,000
Over $ 45,000 $ 1,530 plus 5.5% of excess over $ 45,000.
C. For single individuals and for estates and trusts:
If the taxable income is: The tax shall be:
Not over $10,000 1.7% of taxable income
Over $ 10,000 but not over $ 16,000 $ 170 plus 3.2% of excess over $ 10,000
Over $ 16,000 but not over $ 30,000 $ 362 plus 4.7% of excess over $ 16,000
Over $ 30,000 $ 1,020 plus 5.5% of excess over $ 30,000.
D. For heads of household filing returns:
If the taxable income is: The tax shall be:
Not over $12,500 1.7% of taxable income
Over $ 12,500 but not over $ 20,000 $ 212.50 plus 3.2% of
excess over $ 12,500
Over $ 20,000 but not over $ 37,500 $ 452.50 plus 4.7% of
excess over $ 20,000
Over $ 37,500 $ 1,275 plus 5.5% of
excess over $ 37,500.
E. 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 3. Section 7-2-34 NMSA 1978 (being Laws 1999, Chapter 205, Section 1) is amended to read:
"7-2-34. DEDUCTION--NET CAPITAL GAIN INCOME.--
A. Except as provided in Subsection [B] C of this
section, a taxpayer may claim a deduction from net income in
an amount equal to the greater of:
(1) the taxpayer's net capital gain income for the taxable year for which the deduction is being claimed, but not to exceed one thousand dollars ($1,000); or
(2) the following percentage of the taxpayer's net capital gain income for the taxable year for which the deduction is being claimed:
(a) for a taxable year beginning in 2003, ten percent;
(b) for a taxable year beginning in 2004, twenty percent;
(c) for a taxable year beginning in 2005, thirty percent; and
(d) for taxable years beginning on or after January 1, 2006, fifty percent.
B. A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the deduction provided by this section that would have been allowed on the joint return.
[B.] C. A taxpayer may not claim the deduction
provided in Subsection A of this section if the taxpayer has
claimed the credit provided in Section 7-2D-8.1 NMSA 1978.
[C.] D. As used in this section, "net capital
gain" means "net capital gain" as defined in Section 1222
(11) of the Internal Revenue Code."
Section 4. EFFECTIVE DATE.--The effective date of the provisions of Section 2 of this act is January 1, 2004.