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SANTA FE (AP) — Republican lawmakers proposed Thursday to significantly revamp New Mexico’s governmental finance system by relying more on taxing people and businesses on what they consume and spend, rather than the income they earn.
Rep. Tom Taylor and Sen. Bill Sharer, both of Farmington, outlined their proposal Thursday but conceded it’s a work-in-progress and not fully clear how the tax burdens of individuals and businesses will change.
“It may overtax some areas and we need to understand all of that before we cast this thing in stone,” Taylor said.
Sharer called it a “hard reboot of the New Mexico tax system.”
The proposal would greatly expand what is subject to New Mexico’s gross receipt tax, which applies to sales of many — but not all — goods and services.
Most groceries and food staples are tax exempt currently, but that would end under the proposed overhaul. Sharer said the tax would apply to “virtually everything that happens” in the state.
By broadening the tax base, the lawmakers propose to reduce the tax rate and eliminate most other taxes, including the state’s corporate and personal income taxes.
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