44th legislature - STATE OF NEW MEXICO - first session, 1999

REQUESTING THE NEW MEXICO CONGRESSIONAL DELEGATION TO INTRODUCE LEGISLATION TO REINSTATE THE FEDERAL INCOME TAX DEDUCTION FOR STATE SALES AND GROSS RECEIPTS TAXES.

WHEREAS, the Internal Revenue Code of 1986 currently allows a federal individual income tax deduction for state property taxes and state income taxes but has eliminated the deduction for state sales or gross receipts taxes; and

WHEREAS, this unequal treatment of state taxes results in significant differences in the amount of federal income tax paid on similar income by taxpayers in New Mexico as compared to taxpayers in states which do not have comparable sales or gross receipts taxes; and

WHEREAS, the New Mexico tax system relies heavily on gross receipts taxes and accordingly the loss of the federal deduction for gross receipts taxes has had a particularly severe impact on the tax burden of New Mexico residents; and WHEREAS, the deduction for state sales or gross receipts taxes was eliminated at a time when the congress of the United States felt obligated to increase federal revenues; and

WHEREAS, this pressure is no longer present due to the federal budget surplus; and

WHEREAS, the congress of the United States is contemplating tax reductions and other changes in the federal income tax; and

WHEREAS, restoration of the federal income tax deduction for gross receipts taxes would result in a significant reduction in federal income taxes for many New Mexico citizens and would be of much greater benefit than other income tax reduction alternatives being considered;

NOW, THEREFORE, BE IT RESOLVED BY THE HOUSE OF REPRESENTATIVES OF THE STATE OF NEW MEXICO that the New Mexico congressional delegation be requested to seek amendment of the Internal Revenue Code of 1986 to reinstate the deduction for state sales and gross receipts taxes; and

BE IT FURTHER RESOLVED that copies of this memorial be transmitted to the members of the New Mexico congressional delegation, the speaker and the minority leader of the United States house of representatives and the majority leader and the minority leader of the United States senate.