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

SPONSOR Boitano

ORIGINAL DATE

LAST UPDATED

2/1/08

HB

SHORT TITLE Low Income Property Tax Rebate Eligibility

SB 449

ANALYST Francis

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

FY10

* See Narrative

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Taxation and Revenue Department (TRD)

SUMMARY

Synopsis of Bill

Senate Bill 449 amends the low income property tax rebate allowing low income taxpayers with

modified gross income of up to $32,000 receive some rebate. The following table shows the

change:

MGI

Percent of Property Tax Liability

From To

Current Law

SB 449

0 8000

75%

75%

8000 10000

70%

70%

10000 12000

65%

65%

12000 14000

60%

60%

14000 16000

55%

55%

16000 18000

50%

50%

18000 20000

45%

45%

20000 22000

40%

40%

22000 24000

35%

35%

24000 26000

0%

30%

Senate Bill No. 449– Page

2

MGI

Percent of Property Tax Liability

From To

Current Law

SB 449

26000 28000

0%

25%

28000 30000

0%

20%

30000 32000

0%

10%

32000

0%

0%

The change will be effective for tax years beginning on or after January 1, 2008.

FISCAL IMPLICATIONS

TRD:

Los Alamos is the only county currently offering this property tax rebate. Los Alamos

taxpayers currently provide the rebates to approximately 65 people receiving rebates

totaling approximately $18,000, an average of approximately $275 per taxpayer. This

figure would likely increase by about 25% or 16 taxpayers. Hence the 16 taxpayers

multiplied by the $275 average rebate in Los Alamos suggests the rebate would add

perhaps $4,500 to the total amount of rebates that Los Alamos would be required to

refund taxpayers if the proposed legislation were to be enacted. Los Alamos is the only

entity likely to offer the rebate in the near future.

SIGNIFICANT ISSUES

TRD:

The reason counties are not opting for the rebates may stem from the fact that MGI is not

reported to the Department except in cases where individuals are claiming some sort of

rebate. Hence statewide MGI figures are not available to the Department for income

ranges in excess of about $24,000. Moreover, the Department does not have access to

property tax obligations of the individuals that would likely qualify for the rebates. The

Department is therefore unable to provide accurate estimates of rebates that would be

paid by a county that is considering offering the rebates, and counties are probably likely

not to offer them without knowing what the fiscal impacts would be. Basing the rebates

on adjusted gross income and requiring counties to provide tax obligations of property

owners with associated identification numbers would solve this problem. The Department

could match tax obligations with adjusted gross income of taxpayers likely to qualify for

the rebates and generate accurate fiscal impact estimates for counties.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

HB 618, which makes several revisions to the income tax code, changes the definition of

modified gross income that is used in this section.

NF/mt