Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance

committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).

Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and

attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

F I S C A L I M P A C T R E P O R T

SPONSOR Youngberg

DATE TYPED 01/31/05 HB HM 5

SHORT TITLE Permanently Abolish Death Tax

SB

ANALYST Ford

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

NFI

See Narrative

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

SUMMARY

Synopsis of Bill

House Memorial 5 calls upon New Mexico’s congressional delegation to work to permanently

repeal the federal death tax.

Significant Issues

The federal Economic Growth and Tax Relief Reconciliation Act of 2001 made changes to the

estate, gift, and generation-skipping transfer tax. The Act created a phase-out of the estate tax

until its full repeal in 2010. However, in 2011, the estate tax will revert to its full amount.

Since passage of the federal legislation, Congress has considered multiple bills that would make

permanent that repeal of the estate tax but none of these bills has been enacted.

FISCAL IMPLICATIONS

The state’s collection of estate taxes is based on a section of federal law which essentially per-

mitted the states to collect a portion of the federal estate tax. That section of federal law was

phased out, and the state will not longer collect estate taxes after FY 05. Presumably, should the

federal estate tax resume in 2011 as scheduled, the state estate tax would also resume, leading to

an increase in state revenue. This would hold true only if there were no intervening changes to

state or federal law between now and 2011.

EF/lg