House Memorial 52

HOUSE MEMORIAL 52

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

INTRODUCED BY

Rebecca Dow and Jonathan A. Henry

 

 

 

 

 

A MEMORIAL

REQUESTING THE ECONOMIC DEVELOPMENT DEPARTMENT, THE TOURISM DEPARTMENT AND THE TAXATION AND REVENUE DEPARTMENT TO ESTABLISH A WORK GROUP TO STUDY THE ECONOMIC IMPACT, TAXATION AND REGULATORY FRAMEWORK OF SHORT-TERM RENTALS ACROSS NEW MEXICO; REQUESTING SUSPENSION OF RECLASSIFICATION OF SHORT-TERM RENTAL PROPERTIES UNTIL COMPLETION OF THE STUDY.

 

     WHEREAS, short-term rentals have become an increasingly significant part of New Mexico's tourism economy, providing essential accommodations for visitors and serving as a critical component of the state's hospitality industry; and

     WHEREAS, short-term rentals also serve as a necessary part of the housing market for traveling workers, including health care professionals, construction crews and remote employees who require flexibility and temporary lodging options in areas with limited traditional accommodations; and

     WHEREAS, the total economic impact of short-term rentals in New Mexico in 2023 was one billion one hundred thousand dollars ($1,000,100,000), with seven hundred forty-six million dollars ($746,000,000) in direct visitor spending, supporting fourteen thousand five hundred fifty-five jobs statewide and generating eighty-two million one hundred thousand dollars ($82,100,000) in state and local tax revenues; and

      WHEREAS, in Bernalillo county, short-term rentals generated eleven million six hundred thousand dollars ($11,600,000) in tax revenue, with seven million four hundred thousand dollars ($7,400,000) from lodging taxes, supporting Albuquerque's tourism-driven economy, which comprises eleven and four-tenths percent of the state's tourism sector; and

     WHEREAS, in Santa Fe county, short-term rentals contributed thirty-three million six hundred thousand dollars ($33,600,000) in tax revenue, including sixteen million eight hundred thousand dollars ($16,800,000) from lodging taxes, while in Taos county, short-term rentals generated fourteen million eight hundred thousand dollars ($14,800,000) in tax revenue, with nine million dollars ($9,000,000) from lodging taxes, demonstrating the substantial role short-term rentals play in supporting local public finances; and

     WHEREAS, in Lincoln county, short-term rentals contributed fourteen million six hundred thousand dollars ($14,600,000) in tax revenue, with nine million dollars ($9,000,000) coming from lodging taxes, further reinforcing the economic significance of short-term rentals in rural and tourist-heavy regions; and

     WHEREAS, the availability of short-term rental listings varies, with fifteen percent operating as full-time rentals, thirty-six percent as semi-full-time rentals and forty-nine percent as part-time rentals, demonstrating the diverse ways in which short-term rentals support New Mexico's tourism and workforce housing needs; and

     WHEREAS, some county assessors in New Mexico have begun reclassifying short-term rental properties as nonresidential for taxation purposes, creating potential implications for property tax rates and regulatory compliance for short-term rental owners and operators; and

     WHEREAS, only fifteen percent of short-term rentals are operated full time with no owner use, and a significant portion of these properties belong to New Mexico residents who are frequently deployed or temporarily out of state for work assignments, further emphasizing that most short-term rentals serve as supplemental income sources for homeowners rather than large-scale business ventures; and

     WHEREAS, the vast majority of short-term rental properties, totaling approximately eighty-five percent, are operated on a part-time or semi-full-time basis, serving primarily as a means for homeowners to generate supplemental income to offset mortgage, property tax and maintenance expenses, thereby enabling them to retain their homes; and

     WHEREAS, such reclassifications carry substantial economic and legal ramifications, potentially forcing many New Mexicans to cease offering short-term rentals and jeopardizing their continued homeownership, and it is therefore in the public interest to conduct a comprehensive study before permanent changes are made;

     NOW, THEREFORE, BE IT RESOLVED BY THE HOUSE OF REPRESENTATIVES OF THE STATE OF NEW MEXICO that a short-term rental work group be established by the economic development department, the tourism department and the taxation and revenue department to study the economic contributions, workforce housing benefits, taxation policies and regulatory considerations of short-term rentals statewide; and

     BE IT FURTHER RESOLVED that this work group be composed of representatives from the economic development department, the tourism department, the taxation and revenue department, the New Mexico short-term rental association, the New Mexico association of realtors and the assessors affiliate of the New Mexico association of counties, ensuring a collaborative and data-driven approach to short-term rental policy evaluation; and

     BE IT FURTHER RESOLVED that the study evaluate short-term rental taxation policies, the impact of nonresidential property tax classifications, zoning and permitting regulations and potential pathways for a fair and balanced regulatory framework for short-term rental operators and local communities; and

     BE IT FURTHER RESOLVED that the work group report its findings and policy recommendations to the appropriate interim legislative committees by December 1, 2025; and

     BE IT FURTHER RESOLVED that county assessors be requested to suspend further reclassification of short-term rental properties from residential to nonresidential until the completion of the study, ensuring that policy recommendations are based on data and economic analysis; and

     BE IT FURTHER RESOLVED that copies of this memorial be transmitted to the secretary of economic development, the secretary of tourism, the secretary of taxation and revenue, the New Mexico short-term rental association, the New Mexico association of realtors and relevant local government associations for appropriate distribution.

- 5 -