DEPARTMENT OF TAXES AND REVENUE
New Mexico Tax and Treasury Secretary Stephanie Schardin Clarke welcomed the passage of several bills recently signed by Governor Michelle Lujan Grisham that clarify and update the state’s tax codes.
House Bill 98, introduced on behalf of the department, contains dozens of clarifications to the law to prevent disputes and enable the department to work more efficiently.
One important change in House Bill 98 is a simple one-word correction that makes it clear that groceries for groceries will be gross income tax deductible as long as they are sold by a qualified grocer. Under the old law, groceries had to be purchased from a qualified grocer to be eligible for deduction. This wording predated the recent popularity of grocery deliveries.
“Tax law can be very technical, but it has real implications. Many of the changes made to our tax code this year will not only ensure that it is up to date, but will also make them fairer. “Sec. Shard Clarke said.
Among other things, House Bill 98 also:
- Increases income levels that cannot be garnished for tax debts to ensure taxpayers on lower wages can continue to pay for basic needs.
- Clarifies when a taxpayer is entitled to innocent spouse’s relief, which under certain conditions can exempt a spouse from liability for a spouse’s tax debts. The new law also stipulates that the tax and tax authorities will automatically grant the relief if the Internal Revenue Service has already done so.
- Clarifies various gross income tax deductions to allow the use of alternative evidence in lieu of Non-Taxable Transaction Certificates (NTTCs).
HB 98 was sponsored by Rep. Javier Martinez and Rep. Jason Harper.
Senate Act 410. This law passes the uniform model law of the Multistate Tax Commission for audits of federal partnerships. The main purpose is to resolve issues arising from a federal partnership review or amendment application affected by an amendment to federal law enacted in 2015.
For most taxpayers, a federal tax adjustment is the result of an audit or filing an amended tax return. Because New Mexico taxes are largely the same as federal taxes, a New Mexico taxpayer must file an amended state tax return.
SB 410 clarifies that partners whose partnerships have been reviewed or have submitted administrative requests for adjustments to their federal taxes must file amended state tax returns and lays down procedures for doing so.
SB 410 was sponsored by Senator William Burt.
Senate Act 218. This bill ensures that market-based procurement changes for the 2019 corporate income tax are implemented as intended by clarifying the Unified Distribution of Income for Tax Purposes Act (UDITPA).
Market-based sourcing ensures that corporations will incur corporate income tax on the provision of the service or intangible asset to a customer in New Mexico, or use of the service or intangible asset in New Mexico.
SB 218 was sponsored by Senator Benny Shendo Jr.