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.

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

SPONSOR Smith

DATE TYPED 3-2-2005 HB

SHORT TITLE Income Tax Payments Rebates

SB 893

ANALYST Taylor

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

($6,700)

($6,700)

Similar Non-Rec State General Fund

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Taxation and Revenue Department (TRD)

SUMMARY

Senate Bill 893 provides an income tax rebate against income taxes paid in taxable year 2005.

The rebate is not to exceed twenty-three dollars and twenty-five cents of the New Mexico In-

come tax paid in tax year 2005.

FISCAL IMPLICATIONS

The Taxation and Revenue Department (TRD) estimates that the rebate will reduce state tax

revenue by $13.4 million on a non-recurring basis. The fiscal impact is split between two fiscal

years based on the state’s revenue recognition policy.

TRD used data from tax year 2003 returns (latest available data) to estimate the impact. The

methodology began by estimating returns with liability of $23.25 or more, and then stepping

down to returns with returns of liability between $12 and $23.25 and finally returns with liability

between $12 and $0. These were summed to arrive at the estimated impact.

ADMINISTRATIVE IMPLICATIONS

TRD reports that the administrative implications are minimal and could be absorbed with exist-

ing resources.

BT/yr