HOUSE BILL 410

47th legislature - STATE OF NEW MEXICO - first session, 2005

INTRODUCED BY

Ben Lujan

AN ACT

RELATING TO TAXATION; PERMITTING AN INCOME TAX EXEMPTION FOR LOW- AND MIDDLE-INCOME TAXPAYERS.

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

     Section 1. A new section of the Income Tax Act is enacted to read:

     "[NEW MATERIAL] EXEMPTION FOR LOW- AND MIDDLE-INCOME TAXPAYERS.--

          A. An individual may claim an exemption in an amount specified in Subsections B through D of this section not to 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 a married individual filing a separate return with adjusted gross income up to thirty-two thousand five hundred dollars ($32,500):

                 (1) if the adjusted gross income is not over twelve thousand five hundred dollars ($12,500), the amount of the exemption pursuant to this section shall be three thousand dollars ($3,000) for each federal exemption; and

                 (2) if the adjusted gross income is over twelve thousand five hundred dollars ($12,500) but not over thirty-two thousand five hundred dollars ($32,500), the amount of the exemption pursuant to this section for each federal exemption shall be calculated as follows:

                     (a) three thousand dollars ($3,000); less

                     (b) seven and one-half percent of the amount obtained by subtracting twelve thousand five hundred dollars ($12,500) from the adjusted gross income.

          C. For single individuals with adjusted gross income up to thirty-five thousand dollars ($35,000):                            (1) if the adjusted gross income is not over fifteen thousand dollars ($15,000), the amount of the exemption pursuant to this section shall be three thousand dollars ($3,000) for each federal exemption; and

                 (2) if the adjusted gross income is over fifteen thousand dollars ($15,000) but not over thirty-five thousand dollars ($35,000), the amount of the exemption pursuant to this section for each federal exemption shall be calculated as follows:

                     (a) three thousand dollars ($3,000); less

                     (b) fifteen percent of the amount obtained by subtracting fifteen thousand dollars ($15,000) from the adjusted gross income.

          D. For married individuals filing joint returns or for heads of households with adjusted gross income up to sixty-five thousand dollars ($65,000):

                 (1) if the adjusted gross income is not over twenty-five thousand dollars ($25,000), the amount of the exemption pursuant to this section shall be three thousand dollars ($3,000) for each federal exemption; and

                 (2) if the adjusted gross income is over twenty-five thousand dollars ($25,000) but not over sixty-five thousand dollars ($65,000), the amount of the exemption pursuant to this section for each federal exemption shall be calculated as follows:

                     (a) three thousand dollars ($3,000); less

                     (b) seven and one-half percent of the amount obtained by subtracting twenty-five thousand dollars ($25,000) 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."

     Section 2. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2005.

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