HOUSE BILL 18
46th legislature - STATE OF NEW MEXICO - first special session, 2003
INTRODUCED BY
Eric A. Youngberg
AN ACT
RELATING TO TAXATION; PROVIDING INCOME TAX RELIEF FOR SENIOR CITIZENS, FAMILIES, INDIVIDUALS AND HEADS OF HOUSEHOLD.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 7-2-5.2 NMSA 1978 (being Laws 1985, Chapter 114, Section 1, as amended) is amended to read:
"7-2-5.2. EXEMPTION--INCOME OF PERSONS SIXTY-FIVE AND OLDER OR BLIND.--Any individual sixty-five years of age or older or who, for federal income tax purposes, is blind may claim an exemption in an amount specified in Subsections A through C of this section not to exceed eight thousand dollars ($8,000) of income includable except for this exemption in net income. Individuals having income both within and without this state shall apportion this exemption in accordance with regulations of the secretary.
A. For married individuals filing separate returns, for any taxable year beginning on or after January 1, 1987:
The maximum amount of
If adjusted exemption allowable under
gross income is: this section shall be:
Not over $15,000 $8,000
Over $15,000 but not over $16,500 $7,000
Over $16,500 but not over $18,000 $6,000
Over $18,000 but not over $19,500 $5,000
Over $19,500 but not over $21,000 $4,000
Over $21,000 but not over $22,500 $3,000
Over $22,500 [but not over $24,000 $2,000] $2,500
[Over $24,000 but not over $25,500 $1,000
Over $25,500 0].
B. For heads of household, surviving spouses and married individuals filing joint returns, for any taxable year beginning on or after January 1, 1987:
The maximum amount of
If adjusted exemption allowable under
gross income is: this section shall be:
Not over $30,000 $8,000
Over $30,000 but not over $33,000 $7,000
Over $33,000 but not over $36,000 $6,000
Over $36,000 but not over $39,000 $5,000
Over $39,000 but not over $42,000 $4,000
Over $42,000 but not over $45,000 $3,000
Over $45,000 [but not over $48,000 $2,000] $2,500
[Over $48,000 but not over $51,000 $1,000
Over $51,000 0].
C. For single individuals, for any taxable year beginning on or after January 1, 1987:
The maximum amount of
If adjusted exemption allowable under
gross income is: this section shall be:
Not over $18,000 $8,000
Over $18,000 but not over $19,500 $7,000
Over $19,500 but not over $21,000 $6,000
Over $21,000 but not over $22,500 $5,000
Over $22,500 but not over $24,000 $4,000
Over $24,000 but not over $25,500 $3,000
Over $25,500 [but not over $27,000 $2,000] $2,500
[Over $27,000 but not over $28,500 $1,000
Over $28,500 0]."
Section 2. Section 7-2-7 NMSA 1978 (being Laws 2003, Chapter 2, Section 3), which is to become effective January 1, 2004, 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 in 2004:
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 $ 864 plus 6.8% of
excess over $ 20,000.
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 but not over $ 40,000 $ 768 plus 6.0% of excess over $ 24,000
Over $ 40,000 $ 1,728 plus 6.8% of
excess over $ 40,000.
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 $1,104.50 plus 6.8% of
excess over $ 26,000.
[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 $1,405 plus 6.8% of
excess over $ 33,000.
E.] 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 3. Section 7-2-7 NMSA 1978 (being Laws 2003, Chapter 2, Section 4), which is to become effective January 1, 2005, 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 in 2005:
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 6.0% 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 6.0% 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 6.0% of excess over $ 16,000.
[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 $ 625 plus 6.0% of
excess over $ 20,000.
E.] 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 4. Section 7-2-7 NMSA 1978 (being Laws 2003, Chapter 2, Section 5), which is to become effective January 1, 2006, 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 in 2006:
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% 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% 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% of excess over $ 16,000.
[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 $ 625 plus 5.3% of
excess over $ 20,000.
E.] 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 5. Section 7-2-7 NMSA 1978 (being Laws 2003, Chapter 2, Section 6), which is to become effective January 1, 2007, 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, 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 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 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 4.9% of excess over $ 16,000.
[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 $ 625 plus 4.9% of
excess over $ 20,000.
E.] 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 6. Section 7-2-14 NMSA 1978 (being Laws 1972, Chapter 20, Section 2, as amended) is amended to read:
"7-2-14. [LOW-INCOME COMPREHENSIVE TAX REBATE] FAMILY AND INDIVIDUAL REBATE.--
A. Except as otherwise provided in Subsection B of this section, any resident who files an individual New Mexico income tax return and who is not a dependent of another individual may claim a tax rebate for a portion of state and local taxes to which the resident has been subject during the taxable year for which the return is filed. The tax rebate may be claimed even though the resident has no income taxable under the Income Tax Act. 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 tax rebate that would have been allowed on a joint return.
B. No claim for the tax rebate provided in this section shall be filed by a resident who was an inmate of a public institution for more than six months during the taxable year for which the tax rebate could be claimed or who was not physically present in New Mexico for at least six months during the taxable year for which the tax rebate could be claimed.
C. For the purposes of this section, the total number of exemptions for which a tax rebate may be claimed or allowed is determined by adding the number of federal exemptions allowable for federal income tax purposes for each individual included in the return who is domiciled in New Mexico plus two additional exemptions for each individual domiciled in New Mexico included in the return who is sixty-five years of age or older plus one additional exemption for each individual domiciled in New Mexico included in the return who, for federal income tax purposes, is blind plus one exemption for each minor child or stepchild of the resident who would be a dependent for federal income tax purposes if the public assistance contributing to the support of the child or stepchild was considered to have been contributed by the resident.
D. The tax rebate provided for in this section may be claimed in the amount shown in the following table:
Modified gross And the total number
income is: of exemptions is:
[ But Not 6 or
Over Over 1 2 3 4 5 More
$ 0 $ 500 $120 $160 $200 $240 $280 $320
500 1,000 135 195 250 310 350 415
1,000 1,500 135 195 250 310 350 435
1,500 2,000 135 195 250 310 350 450
2,000 2,500 135 195 250 310 350 450
2,500 3,000 135 195 250 310 350 450
3,000 3,500 135 195 250 310 350 450
3,500 4,000 135 195 250 310 355 450
4,000 4,500 135 195 250 310 355 450
4,500 5,000 125 190 240 305 355 450
5,000 5,500 115 175 230 295 355 430
5,500 6,000 105 155 210 260 315 410
6,000 7,000 90 130 170 220 275 370
7,000 8,000 80 115 145 180 225 295
8,000 9,000 70 105 135 170 195 240
9,000 10,000 65 95 115 145 175 205
10,000 11,000 60 80 100 130 155 185
11,000 12,000 55 70 90 110 135 160
12,000 13,000 50 65 85 100 115 140
13,000 14,000 50 65 85 100 115 140
14,000 15,000 45 60 75 90 105 120
15,000 16,000 40 55 70 85 95 110
16,000 17,000 35 50 65 80 85 105
17,000 18,000 30 45 60 70 80 95
18,000 19,000 25 35 50 60 70 80
19,000 20,000 20 30 40 50 60 65
20,000 21,000 15 25 30 40 50 55
21,000 22,000 10 20 25 35 40 45]
But Not 7 or
Over Over 1 2 3 4 5 6 More
$ 0 $1,000 $180 $281 $373 $460 $515 $605 $704
1,000 3,000 180 281 373 460 515 640 745
3,000 5,000 180 281 373 460 520 640 745
5,000 6,000 160 261 353 445 520 620 722
6,000 7,000 135 216 293 370 440 560 652
7,000 8,000 125 201 268 330 390 485 564
8,000 9,000 115 191 258 320 360 430 500
9,000 10,000 103 181 238 295 340 395 459
10,000 11,000 85 166 223 280 320 375 436
11,000 12,000 65 156 213 260 300 350 407
12,000 13,000 50 144 208 250 280 330 383
13,000 14,000 50 137 208 250 280 330 383
14,000 15,000 45 120 198 240 270 310 360
15,000 16,000 40 105 193 235 260 300 348
16,000 17,000 35 90 170 230 250 295 343
17,000 18,000 30 78 155 220 245 285 331
18,000 19,000 25 61 130 210 235 270 313
19,000 20,000 20 49 105 195 225 255 296
20,000 21,000 15 37 80 175 215 245 284
21,000 22,000 10 20 70 160 205 235 273
22,000 23,000 0 0 45 115 155 183 220
23,000 24,000 0 0 0 105 145 176 210
24,000 25,000 0 0 0 60 135 169 200
25,000 26,000 0 0 0 45 125 145 190
26,000 27,000 0 0 0 30 115 138 180
27,000 28,000 0 0 0 15 105 131 170
28,000 29,000 0 0 0 0 95 124 150
29,000 30,000 0 0 0 0 45 117 130
30,000 31,000 0 0 0 0 30 105 120
31,000 32,000 0 0 0 0 0 93 115
32,000 33,000 0 0 0 0 0 81 100
33,000 34,000 0 0 0 0 0 45 85
34,000 35,000 0 0 0 0 0 30 73
35,000 36,000 0 0 0 0 0 15 61
36,000 37,000 0 0 0 0 0 0 49
37,000 38,000 0 0 0 0 0 0 37
38,000 39,000 0 0 0 0 0 0 25.
E. If a taxpayer's modified gross income is zero, the taxpayer may claim a credit in the amount shown in the first row of the table appropriate for the taxpayer's number of exemptions.
F. The tax rebates provided for in this section may be deducted from the taxpayer's New Mexico income tax liability for the taxable year. If the tax rebates exceed the taxpayer's income tax liability, the excess shall be refunded to the taxpayer.
G. For purposes of this section:
(1) "dependent" means "dependent" as defined by Section 152 of the Internal Revenue Code of 1986, as that section may be amended or renumbered, but also includes any minor child or stepchild of the resident who would be a dependent for federal income tax purposes if the public assistance contributing to the support of the child or stepchild was considered to have been contributed by the resident; and
(2) "modified gross income" means "modified gross income" as defined in Section 7-2-2 NMSA 1978 but also includes the value of food stamp program benefits."
Section 7. A new section of the Income Tax Act is enacted to read:
"[NEW MATERIAL] ADDITIONAL EXEMPTION AMOUNT.--
A. An individual may claim an additional exemption amount as specified in Subsections B, C and D of this section; provided that the additional exemption amount shall not exceed an amount equal to the number of federal exemptions multiplied by three thousand dollars ($3,000) of income includable, except for this exemption, in net income. Individuals having income both within and without this state shall apportion this exemption in accordance with regulations of the secretary.
B. For single individuals:
(1) if the number of federal exemptions is one, the additional exemption amount shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting eight thousand dollars ($8,000) from the adjusted gross income;
(2) if the number of federal exemptions is two, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting eleven thousand dollars ($11,000) from the adjusted gross income;
(3) if the number of federal exemptions is three, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting fourteen thousand dollars ($14,000) from the adjusted gross income;
(4) if the number of federal exemptions is four, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting seventeen thousand dollars ($17,000) from the adjusted gross income;
(5) if the number of federal exemptions is five, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting twenty thousand dollars ($20,000) from the adjusted gross income;
(6) if the number of federal exemptions is six, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting twenty-three thousand dollars ($23,000) from the adjusted gross income; and
(7) if the number of federal exemptions is seven or more, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting twenty-six thousand dollars ($26,000) from the adjusted gross income.
C. For heads of household, surviving spouses and married individuals filing joint returns:
(1) if the number of federal exemptions is one, the additional exemption amount shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting twelve thousand dollars ($12,000) from the adjusted gross income;
(2) if the number of federal exemptions is two, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting fifteen thousand dollars ($15,000) from the adjusted gross income;
(3) if the number of federal exemptions is three, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting eighteen thousand dollars ($18,000) from the adjusted gross income;
(4) if the number of federal exemptions is four, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting twenty-one thousand dollars ($21,000) from the adjusted gross income;
(5) if the number of federal exemptions is five, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting twenty-four thousand dollars ($24,000) from the adjusted gross income;
(6) if the number of federal exemptions is six, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting twenty-seven thousand dollars ($27,000) from the adjusted gross income; and
(7) if the number of federal exemptions is seven or more, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting thirty thousand dollars ($30,000) from the adjusted gross income.
D. For married individuals filing separate returns:
(1) if the number of federal exemptions is one, the additional exemption amount shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting six thousand dollars ($6,000) from the adjusted gross income;
(2) if the number of federal exemptions is two, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting seven thousand five hundred dollars ($7,500) from the adjusted gross income;
(3) if the number of federal exemptions is three, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting nine thousand dollars ($9,000) from the adjusted gross income;
(4) if the number of federal exemptions is four, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting ten thousand five hundred dollars ($10,500) from the adjusted gross income;
(5) if the number of federal exemptions is five, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting twelve thousand dollars ($12,000) from the adjusted gross income;
(6) if the number of federal exemptions is six, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting thirteen thousand five hundred dollars ($13,500) from the adjusted gross income; and
(7) if the number of federal exemptions is seven or more, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting fifteen thousand dollars ($15,000) from the adjusted gross income.
E. For the purposes of this section, "federal exemption" means an exemption allowable for federal income tax purposes for an individual included in the return who is domiciled in New Mexico.
F. In lieu of the computations required to determine the amount of the additional exemption provided by this section, the secretary may adopt regulations allowing the use of tables to determine the additional exemption amount. The tables may be established either by regulation or instruction but shall be computed substantially on the basis of the computations prescribed in this section."
Section 8. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2004.
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