HOUSE BILL 1254

48th legislature - STATE OF NEW MEXICO - first session, 2007

INTRODUCED BY

Edward C. Sandoval

AN ACT

RELATING TO TAXATION; EXPANDING THE INCOME TAX EXEMPTION FOR LOW- AND MIDDLE-INCOME TAXPAYERS; INCREASING THE MAXIMUM INCOME AT WHICH THE EXEMPTION CAN BE CLAIMED.

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

     Section 1. Section 7-2-5.8 NMSA 1978 (being Laws 2005, Chapter 104, Section 5) is amended to read:

     "7-2-5.8. 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 two thousand five hundred dollars ($2,500) 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 [twenty thousand three hundred thirty-three dollars ($20,333)] thirty thousand five hundred dollars ($30,500):

                 (1) if the adjusted gross income is not over [twelve thousand dollars ($12,000)] eighteen thousand dollars ($18,000), the amount of the exemption pursuant to this section shall be two thousand five hundred dollars ($2,500) for each federal exemption; and

                 (2) if the adjusted gross income is over [twelve thousand dollars ($12,000)] eighteen thousand dollars ($18,000) but not over [twenty thousand three hundred thirty-three dollars ($20,333)] thirty thousand five hundred dollars ($30,500), the amount of the exemption pursuant to this section for each federal exemption shall be calculated as follows:

                     (a) two thousand five hundred dollars ($2,500); less

                     (b) twenty percent of the amount obtained by subtracting [twelve thousand dollars ($12,000)] eighteen thousand dollars ($18,000) from the adjusted gross income.

          C. For single individuals with adjusted gross income up to [twenty-seven thousand one hundred ten dollars ($27,110)] forty thousand six hundred sixty-seven dollars ($40,667):

                 (1) if the adjusted gross income is not over [sixteen thousand dollars ($16,000)] twenty-four thousand dollars ($24,000), the amount of the exemption pursuant to this section shall be two thousand five hundred dollars ($2,500) for each federal exemption; and

                 (2) if the adjusted gross income is over [sixteen thousand dollars ($16,000)] twenty-four thousand dollars ($24,000) but not over [twenty-seven thousand one hundred ten dollars ($27,110)] forty thousand six hundred sixty-seven dollars ($40,667), the amount of the exemption pursuant to this section for each federal exemption shall be calculated as follows:

                     (a) two thousand five hundred dollars ($2,500); less

                     (b) fifteen percent of the amount obtained by subtracting [sixteen thousand dollars ($16,000)] twenty-four thousand dollars ($24,000) from the adjusted gross income.

          D. For married individuals filing joint returns, surviving spouses or for heads of households with adjusted gross income up to [forty thousand six hundred sixty-seven dollars ($40,667)] sixty-one thousand dollars ($61,000):

                 (1) if the adjusted gross income is not over [twenty-four thousand dollars ($24,000)] thirty-six thousand dollars ($36,000), the amount of the exemption pursuant to this section shall be two thousand five hundred dollars ($2,500) for each federal exemption; and

                 (2) if the adjusted gross income is over [twenty-four thousand dollars ($24,000)] thirty-six thousand dollars ($36,000) but not over [forty thousand six hundred sixty-seven dollars ($40,667)] sixty-one thousand dollars ($61,000), the amount of the exemption pursuant to this section for each federal exemption shall be calculated as follows:

                     (a) two thousand five hundred dollars ($2,500); less

                     (b) ten percent of the amount obtained by subtracting [twenty-four thousand dollars ($24,000)] thirty-six thousand dollars ($36,000) 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, 2007.

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