HOUSE BILL 4

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

INTRODUCED BY

Greg Payne

AN ACT

RELATING TO TAXATION; AMENDING THE INCOME TAX ACT TO REDUCE INCOME TAX RATES FOR CERTAIN TAXPAYERS; REPEALING LAWS 2005, CHAPTER 104, SECTION 4.

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

     Section 1. Section 7-2-7 NMSA 1978 (being Laws 2003, Chapter 2, Section 5, 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 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 [5.8%] 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 [5.8%] 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 [5.8%] 5.3% of excess over $ 16,000.

          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 2. Section 7-2-7 NMSA 1978 (being Laws 2003, Chapter 2, Section 6, 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, 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 [5.3%] 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 [5.3%] 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 [5.3%] 4.9% of excess over $ 16,000.

          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. REPEAL.--Laws 2005, Chapter 104, Section 4 is repealed.

     Section 4. EFFECTIVE DATES.--

          A. The effective date of the provisions of Section 1 of this act is July 1, 2006.

          B. The effective date of the provisions of Section 2 of this act is July 1, 2007.

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