b'2022 WPMA State ReportNEW MEXICO Petroleum Marketers Association ReportN New Mexico NotesNot much has changed in New Mexico The new $1 trillion federal infrastructure legisla-since the last magazine article. New Mexicostion will send an estimated $3.7 billion to New overall tax climate scores in the middle of statesMexico over approximately five years, LFC staff for its suitability for spurring economic growth,report. In the November federal stimulus funds with New Mexico coming in as best for propertyupdate, staff say the state will receive funds for taxes but among the worst for sales taxes, accord- road construction, public transportation, broad-ing to a taxation policy think tank. band, the electric grid, cybersecurity, and water Ruben Bacasystems through the Infrastructure Investment and NMPMA In a brief on New Mexico tax policy presentedJobs Act.Executive Director to the committee in July, LFC staff says the TaxThe $3.7 billion, an estimate that could change as Foundation in its 2021 State Business Tax Climatemore details about the act emerge, will be distrib-Index ranks New Mexico 23rd for overall taxuted through set formulas. The bill also provides climate, but 41st for sales taxesessentially thefor additional funding that will be distributed gross receipts tax. through competitive grants.Based on 120 variables in five major areas of The estimated benefits to the state: taxation, the right-leaning foundation ranked theRoads, bridges and major projects: The largest state best among all states for its property taxshare will be federal aid for highways, roughly climate and in the top 10 for corporate income$500 million a year for five years and a 25 percent and unemployment insurances taxes. The founda- increase in federal funds for highways. The nine tion ranked New Mexico 31st for personal incomedifferent grant programs in the act have differ-taxes. High marginal tax rates can discourageent state fund matching requirements, but federal work, saving, investment, and innovation, stafffunds will cover the majority of program costs, says in the brief. But low taxes can also slowranging from 80 to 100 percent.long-run economic growth by reducing resources to provide critical government services, increas- Public transit: New Mexico will receive up to ing government borrowing, and decreasing public$372 million for urban and rural area projects, infrastructure investments. enhanced mobility, and buses and bus facilities.The Tax Policy Center, a nonpartisan tax researchBroadband: In addition to $100 million in grants organization, concludes the size and skill of theto the state for broadband infrastructure, 785 thou-workforce, infrastructure quality, and overallsand New Mexicans will be eligible for a benefit stock of knowledge and ideas have a greater in- that helps pay for internet connections.fluence on economic development than tax policy, staff reports. Power infrastructure: New Mexico will receive The brief notes legislators have implemented aan estimated $38 million for energy efficiency number of tax reform initiatives over the past threeprojects, some of which must be used for loans years, including broadening the Gross Receiptsand grants to businesses and homeowners.Tax (GRT) base by taxing previously untaxedThe Weatherization Assistance Program would goods and services, which would allow for a lowersee an over 1,000 percent increase in funding overall rate. with nearly $30 million to help low-income New However, while the state GRT rate has remainedMexicans reduce their energy bills by increasing fairly stable, local governments have raised theirthe energy efficiency in their homes.rates, driving up the total. The state GRT rate isThe Governor also gave families $1500 over June, 32nd among states but the combined rate is 15thJuly, and August to help with high gas and grocery highest, staff says. Businesses are particularlyprices. Nice move right before mid-term elections.impacted by GRT pyramiding, the taxation ofNews for NMPMAs Structurebusiness-to-business transactions that creates anAs of September 1, 2022, we have a new State extra layer of taxation at each stage of production. Executive, Leland Gould, as Ruben Baca retired Lawmakers have adopted anti-pyramiding provi- August 31, 2022. However, Ruben will continue sions for many goods, but services are still largelyas consultant during the transition until the end of taxed. This can hit smaller business particularlythe year.hard because they often contract for services.WPMA News / Fall 202227'