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Tax bill good for New Mexico families, experts say

Tax bill good for New Mexico families, experts say
EXPLAINS HOW THIS BILL COULD IMPACT US AND OUR FAMILIES. REPORTER: AS THE CLOCK WAS TICKING ON THE 2019 LEGISLATIVE SESSION, HOUSE BILL SIX, OR THE TAX BILL, OFFICIALLY PASSED BOTH CHAMBERS. THE BIG QUESTION, ARE THE CHANGES GOOD ARE BAD -- OR BAD FOR NEW MEXICO FAMILIES? >> GOOD FOR NEW MEXICO FAMILIES. REPORTER: ALBUQUERQUE ACCOUNTANT MONTGOMERY DILLAVOU SAYS THERE ARE THREE MAIN POINTS TO TAKE AWAY FROM THE MASSIVE, 159 PAGE BILL. THE FIRST IS THE WORKING FAMILIES TAX CREDIT. >> A LOT OF FAMILIES THAT HAD A COUPLE OF KIDS WERE PAYING MORE INCOME TAX THIS YEAR BECAUSE THAT PERSONAL EXEMPTION WENT AWAY. REPORTER: HB SIX OFFSETS THOSE CHANGES MADE BY THE TRUMP ADMINISTRATION, WITH A WORKING FAMILIES TAX CREDIT FOR 2019. ANOTHER KEY COMPONENT, TAXABLE INTERNET SALES. DILLAVOU SAYS IT WILL HELP BRICK AND MORTAR BUSINESSES, COMPETE, AND CREATE STATE REVENUE. >> NOW IF YOU ARE GOING TO BUY IT ONLINE, YOU HAVE TO PAY THAT NEW MEXICO GROSS RECEIPTS TAX. REPORTER: THE THIRD MAIN CHANGE IS A BIT CONFUSING. >> THIS IS ONE OF THE ODDEST THINGS WE HAVE SEEN. REPORTER: THE BILL RAISES INCOME TAX RATES TO 5.9%, FOR NEW MEXICOS HIGHEST INCOME EARNERS. BUT IT DOES NOT GO INTO EFFECT UNTIL 2022. AND. >> THIS HIGHER TAX RATE IS ONLY GOING TO KICK IN IF REVENUES FROM GROSS RECEIPTS TAXES FALL BELOW A CERTAIN LEVEL. REPORTER: DILLAVOU SAYS WE WILL HAVE TO WAIT AND SEE, IF THE STATE MAKES BUDGET, FOR THE 2021 FISCAL YEAR, BEFORE PEOPLE SHOULD WORRY ABOUT PAYING MO
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Tax bill good for New Mexico families, experts say
The legislative session wrapped up yesterday with major changes to our state taxes. House Bill 6 officially passed both chambers with little time to spare. Albuquerque accountant Montgomery Dillavou said the changes are good for New Mexico families. He said there are three main points to take away from the massive, 159-page bill. The first is the working families tax credit."A lot of families with a couple of kids were paying more this yea. The personal exemption went away,” said Dillavou.HB 6 offsets those changes made by the Trump administration with a working families tax credit for 2019. Another key component is taxable internet sales. Dillavou says it will help brick-and-mortar businesses compete and create state revenue."Now if you are going to buy it online, you are going to pay that New Mexico gross receipts tax," said Dillavou.The third main change is a bit confusing. "This is one of the oddest things we've ever seen," said Dillavou. The bill raises income tax rates to 5.9 percent for New Mexico’s highest income earners. It does not go into effect until 2022. "This higher tax rate is only going to kick in if revenues from gross receipts taxes fall below a certain level," said Dillavou. He said we will have to wait and see if the state meets its budget for the 2021 fiscal year before people should worry about paying more.
ALBUQUERQUE, N.M. —

The legislative session wrapped up yesterday with major changes to our state taxes. House Bill 6 officially passed both chambers with little time to spare. Albuquerque accountant Montgomery Dillavou said the changes are good for New Mexico families. He said there are three main points to take away from the massive, 159-page bill. The first is the working families tax credit.

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"A lot of families with a couple of kids were paying more this yea. The personal exemption went away,” said Dillavou.

HB 6 offsets those changes made by the Trump administration with a working families tax credit for 2019.

Another key component is taxable internet sales. Dillavou says it will help brick-and-mortar businesses compete and create state revenue.

"Now if you are going to buy it online, you are going to pay that New Mexico gross receipts tax," said Dillavou.

The third main change is a bit confusing. "This is one of the oddest things we've ever seen," said Dillavou. The bill raises income tax rates to 5.9 percent for New Mexico’s highest income earners. It does not go into effect until 2022.

"This higher tax rate is only going to kick in if revenues from gross receipts taxes fall below a certain level," said Dillavou.

He said we will have to wait and see if the state meets its budget for the 2021 fiscal year before people should worry about paying more.