b'2022 WPMA State ReportNEW MEXICO Petroleum Marketers Association ReportNew Mexicos overall tax The new $1 trillion federal infrastructure legislation will sendclimate scoresin the middle of statesan estimated $3.7 billion to New Mexico over approximatelyfor its suitability for spurring economicfive years, LFC staff report. In the November federal stimu-growth, with New Mexico coming inlus funds update, staff say the state will receive funds for road as best for property taxes but amongconstruction, public transportation, broadband, the electric grid, the worst for sales taxes, according to acybersecurity, and water systems through the Infrastructuretaxation policy think tank. Investment and Jobs Act.In a brief on New Mexico tax policyThe $3.7 billion, an estimate that could change as more details presented to the committee in July, about the act emerge, will be distributed through set formulas. Ruben BacaLegislative Finance Committee (LFC) The bill also provides for additional funding that will be distrib-NMPMA staff says the Tax Foundation in itsuted through competitive grants. Executive Director 2021 State Business Tax Climate IndexTHE ESTIMATED BENEFITS TO THE STATE: ranks New Mexico 23rd for overall tax climate, but 41st for sales taxesRoads, bridges and major projects: essentially the gross receipts tax. The largest share will be federal aid for highways, roughly $500 Based on 120 variables in five major areas of taxation, the right- million a year for five years and a 25 percent increase in federal leaning foundation ranked the state best among all states for itsfunds for highways. The nine different grant programs in the property tax climate and in the top 10 for corporate income andact have different state fund matching requirements, but federal unemployment insurances taxes. The foundation ranked Newfunds will cover the majority of program costs, ranging from 80 Mexico 31st for personal income taxes. High marginal tax ratespercent to 100 percent. can discourage work, saving, investment, and innovation, staffPublic transit:says in the brief. But low taxes can also slow long-run economicNew Mexico will receive up to $372 million for urban and rural growth by reducing resources to provide critical government area projects, enhanced mobility, and buses and bus facilities.services, increasing government borrowing, and decreasing Broadband:public infrastructure investments. In addition to $100 million in grants to the state for broadband The Tax Policy Center, a nonpartisan tax research organization,infrastructure, 785 thousand New Mexicans will be eligible for a concludes the size and skill of the workforce, infrastructure qual- benefit that helps pay for internet connections.ity, and overall stock of knowledge and ideas have a greaterPower infrastructure: influence on economic development than tax policy, staff reports. New Mexico will receive an estimated $38 million for energy The brief notes legislators have implemented a number of taxefficiency projects, some of which must be used for loans and reform initiatives over the past three years, including broadeninggrants to businesses and homeowners.the gross receipts tax base by taxing previously untaxed goodsThe Weatherization Assistance Program would see an over 1,000 and services, which would allow for a lower overall rate. percent increase in funding with nearly $30 million to help low-However, while the state Gross Receipts Tax (GRT) rate hasincome New Mexicans reduce their energy bills by increasing the remained fairly stable, local governments have raised their rates,energy efficiency in their homes.driving up the total. The state GRT rate is 32nd among states but the combined rate is 15th highest, staff says. Businesses areUpcoming Eventsparticularly impacted by GRT pyramiding, the taxation of business-to-business transactions that creates an extra layer ofGood news! Looks like Sandia Resort and Casino will be the taxation at each stage of production. location of the 2022 NMPMA Convention and Trade Show on Lawmakers have adopted anti-pyramiding provisions for manyAugust 22-24, 2022.Please save the date.goods, but services are still largely taxed. This can hit smallerSbusiness particularly hard because they often contract for services.WPMA News / Summer 202227'