HOUSE BILL 201

53rd legislature - STATE OF NEW MEXICO - first session, 2017

INTRODUCED BY

Daymon Ely

AN ACT

RELATING TO TAXATION; CREATING A NEW TOP INCOME TAX BRACKET; REPEALING AN OUTDATED VERSION OF SECTION 7-2-7 NMSA 1978 (BEING LAWS 2005 (1ST S.S.), CHAPTER 3, SECTION 2).

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.--

          A. 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 and prior to January 1, 2018:

                [A.] (1) 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 4.9% of    excess over $12,000.

                [B.] (2) 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 4.9% of    excess over $24,000.

                [C.] (3) 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 4.9% of excess over $16,000.

          B. 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, 2018:

                (1) 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 but not over $230,000    $384 plus 4.9% of    excess over $12,000

Over $230,000                         $11,066 plus 5.9% of

                                      excess over $230,000.

                (2) 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 but not over $460,000    $768 plus 4.9% of    excess over $24,000

Over $460,000                         $22,132 plus 5.9% of

                                      excess over $460,000.

                (3) 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 but not over $306,667    $504.50 plus 4.9% of excess over $16,000

Over $306,667                         $14,747.17 plus 5.9% of

                                      excess over $306,667.

          [D.] C. 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. REPEAL.--That version of Section 7-2-7 NMSA 1978 (being Laws 2005 (1st S.S), Chapter 3, Section 2) is repealed. 

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