House Bill 275

HOUSE BILL 275

57th legislature - STATE OF NEW MEXICO - first session, 2025

INTRODUCED BY

Elaine Sena Cortez and Mark B. Murphy and Jay C. Block

and Rod Montoya and John Block

 

 

 

 

AN ACT

RELATING TO TAXATION; CREATING A FLAT INDIVIDUAL INCOME TAX RATE OF ZERO PERCENT; PROVIDING THAT PERSONAL INCOME TAX RETURNS ARE NOT REQUIRED BUT MAY BE FILED.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 7-2-7 NMSA 1978 (being Laws 2005, Chapter 104, Section 4, as amended) is amended to read:

     "7-2-7. INDIVIDUAL INCOME TAX RATES.--The tax imposed by Section 7-2-3 NMSA 1978 shall be [at the following rates] zero percent of taxable income for any taxable year beginning on or after January 1, [2025] 2026.

          [A. For married individuals filing joint returns, heads of household and surviving spouses:

     For taxable income:             The tax shall be:

Not over $8,000                       1.5% of taxable income

Over $8,000 but not over $25,000      $120 plus 3.2% of excess over $8,000

Over $25,000 but not over $50,000     $664 plus 4.3% of excess over $25,000

Over $50,000 but not over $100,000    $1,739 plus 4.7% of excess over $50,000

Over $100,000 but not over $315,000   $4,089 plus 4.9% of excess over $100,000

Over $315,000                         $14,624 plus 5.9% of excess over $315,000.

          B. For single individuals and for estates and trusts:

     For taxable income:             The tax shall be:

Not over $5,500                       1.5% of taxable income

Over $5,500 but not over $16,500      $82.50 plus 3.2% of excess over $5,500

Over $16,500 but not over $33,500     $434.50 plus 4.3% of

                                      excess over $16,500

Over $33,500 but not over $66,500     $1,165.50 plus 4.7% of excess over $33,500

Over $66,500 but not over $210,000    $2,716.50 plus 4.9% of                                      excess over $66,500

Over $210,000                         $9,748 plus 5.9% of excess over $210,000.

          C. For married individuals filing separate returns:

     For taxable income:             The tax shall be:

Not over $4,000                       1.5% of taxable income

Over $4,000 but not over $12,500      $60.00 plus 3.2% of excess over $4,000

Over $12,500 but not over $25,000     $332 plus 4.3% of excess over $12,500

Over $25,000 but not over $50,000     $869.50 plus 4.7% of excess over $25,000

Over $50,000 but not over $157,500    $2,044.50 plus 4.9% of excess over $50,000

Over $157,500                         $7,312 plus 5.9% of excess over $157,500.

          D. The tax on the sum of any lump-sum amounts included in net income is an amount equal to five multiplied by the difference between:

                (1) the amount of tax due on the taxpayer's taxable income; and

                (2) the amount of tax that would be due on an amount equal to the taxpayer's taxable income and twenty percent of the taxpayer's lump-sum amounts included in net income.]"

     SECTION 2. Section 7-2-12 NMSA 1978 (being Laws 1965, Chapter 202, Section 10, as amended) is amended to read:

     "7-2-12. TAXPAYER RETURNS [PAYMENT OF TAX].--

          A. [Every] A resident of this state and [every] an individual deriving income from any business transaction, property or employment within this state and not exempt from tax under the Income Tax Act who is required by the laws of the United States to file a federal income tax return [shall] may file a complete tax return with the department in form and content as prescribed by the secretary. Except as provided in Subsection B of this section, a resident or any individual who [is required by the provisions of the Income Tax Act to file] elects to file a return [or pay a tax] shall do so on or before the due date of the resident's or individual's federal income tax return for the taxable year [file the return and pay the tax imposed for that year].

          B. When the department approves electronic media for use by a taxpayer whose taxable year is a calendar year, the taxpayer who uses electronic media for both filing and payment must submit the required return and the tax imposed on residents and individuals under the Income Tax Act on or before the last day of the month in which the resident's or individual's federal income tax return is originally due for the taxable year. The due date provided in this subsection does not apply to residents or individuals who have received a filing extension from New Mexico or an automatic extension from the federal internal revenue service for the same taxable year."

     SECTION 3. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2026.

     SECTION 4. EFFECTIVE DATE.--The effective date of the provisions of this act is January 1, 2026.

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