HOUSE BILL 126

52nd legislature - STATE OF NEW MEXICO - second session, 2016

INTRODUCED BY

Miguel P. Garcia

AN ACT

RELATING TO TAXATION; REDUCING THE INCOME TAX RATE FOR CERTAIN INCOME LEVELS; CREATING NEW INCOME TAX BRACKETS.

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

     SECTION 1. Section 7-2-7 NMSA 1978 (being Laws 2005, Chapter 104, Section 4) 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, [2008] 2016:

          A. For married individuals filing separate returns:

     If the taxable income is:       The tax shall be:

Not over $4,000                       [1.7%] 1.4% of taxable                                       income

Over $ 4,000 but not over $ 8,000   [$ 68.00 plus 3.2%] $56.00 plus 2.9% of excess over $ 4,000

Over $ 8,000 but not over $ 12,000   [$ 196 plus 4.7%] $172 plus 4.4% of excess over $ 8,000

Over $ 12,000 but not over $125,000   [$ 384 plus 4.9%] $348 plus 4.6% of excess over $ 12,000

Over $125,000 but not over $250,000   $5,546 plus 6% of excess                                       over $125,000

Over $250,000                         $13,046 plus 7.1% of                                       excess over $250,000.

          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%] 1.4% of taxable                                       income

Over $ 8,000 but not over $ 16,000   [$ 136 plus 3.2%] $112                                       plus 2.9% of excess over                                       $ 8,000

Over $ 16,000 but not over $ 24,000   [$ 392 plus 4.7%] $344                                       plus 4.4% of excess over                                       $ 16,000

Over $ 24,000 but not over $250,000   [$ 768 plus 4.9%] $696                                       plus 4.6% of excess over                                       $ 24,000

Over $250,000 but not over $500,000   $11,092 plus 6% of excess                                       over $250,000

Over $500,000                         $26,092 plus 7.1% of                                       excess over $500,000.

          C. For single individuals and for estates and trusts:

     If the taxable income is:       The tax shall be:

Not over $5,500                       [1.7%] 1.4% of taxable                                       income

Over $ 5,500 but not over $ 11,000   [$ 93.50 plus 3.2%]                                       $77.00 plus 2.9% of                                        excess over $ 5,500

Over $ 11,000 but not over $ 16,000   [$ 269.50 plus 4.7%]                                       $236.50 plus 4.4% of                                       excess over $ 11,000

Over $ 16,000 but not over $175,000   [$ 504.50 plus 4.9%] $456.50 plus 4.6% of excess over $ 16,000

Over $175,000 but not over $350,000   $7,770.50 plus 6% of                                       excess over $175,000

Over $350,000                         $18,270.50 plus 7.1% of                                       excess over $350,000.

          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. EFFECTIVE DATE.--The effective date of the provisions of this act is January 1, 2017.

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