Higher taxes for goods, services

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Car repairs, soap, some of the items being affected by spike

By Barry Massey

SANTA FE — New Mexicans will pay a higher tax when they buy goods and services, from soap to car repairs, but Gov. Bill Richardson made certain on Wednesday that groceries will remain tax free.

The Democratic governor vetoed a proposed tax on food that the Legislature had passed to provide $68 million to help balance next year’s budget. However, Richardson signed other tax increases that will generate about $170 million to finance government.

The state lifted the tax on food in 2005, and Richardson said he did not want to reinstate what he considered to be a regressive tax that would hurt the poor and middle-income families.

“The food tax, I believe, is one of my legacies, one of my signature accomplishments — getting rid of it. It’s the right thing to do and the responsible thing to do,” Richardson said at a news conference.

Richardson is term-limited and cannot seek re-election this year.

Measures signed by Richardson will:

• Increase the gross receipts tax by one-eighth cent, providing about $60 million next year. The tax applies to goods and services. The state rate will go from 5 percent to 5.125 percent starting July 1. On a $100 purchase, the higher tax will be 12.5 cents. Cities and counties impose local option rates on top of the state levy.

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