-Increases the tax on gross receipts of individuals engaging in business in New Mexico from 5 to 5.125 percent (Sec. 9). -Repeals the gross receipts tax deduction for the receipts of the sale of food at retail food stores, and establishes a retail food tax credit equaled to 5.125 percent of gross receipts that may be claimed by a retail food store (Secs. 11 & 13). -Repeals the scheduled distribution of revenue to municipalities for revenue loss as a result of the gross receipts tax deduction for the receipts of the sale of food at retail food stores ("hold harmless distribution"), and establishes a new schedule of distribution equal to 1.225 percent of food sales for which the retail food tax credit is claimed for fiscal year 2010-2011 and 1.05 percent for fiscal year 2011-2012 and each fiscal year thereafter (Sec. 5). -Increases the compensating tax from 5 to 5.125 percent, which is imposed on tangible property that was (Sec. 10):

-Manufactured by the individual using property in the state; -Acquired as a result of a transaction with an individual located outside of the state that would have been subject to the gross receipts tax had the property been acquired from an individual in the state; or -Acquired as a result of a transaction that was not initially subject to this tax or the gross receipts tax but should have been as a result of the buyer's subsequent use of the property.

-Expands income tax liability to include state and local income tax and sales tax deductions claimed on an individual's federal tax return (Sec. 7). -Expands income tax deductions for taxable years beginning January 1, 2011 to include the amount of adjusted gross income that represents a refund of state and local income tax and sales taxes that were deducted for federal tax purposes in taxable years beginning January 1, 2010 (Sec. 7). -Expands the Low-Income Comprehensive Tax Rebate by specified amounts depending on income levels, including, but not limited to, increasing the income threshold for an individual to be qualified from $22,000 to $24,000 income level (Sec. 8). -This is a substitute bill sponsored by the Senate Committee on Finance.

-Increases the tax on gross receipts of individuals engaging in business in New Mexico from 5 to 5.125 percent (Sec. 9). -Repeals the gross receipts tax deduction for the receipts of the sale of food at retail food stores, and establishes a retail food tax credit equaled to 5.125 percent of gross receipts that may be claimed by a retail food store (Secs. 11 & 13). -Repeals the scheduled distribution of revenue to municipalities for revenue loss as a result of the gross receipts tax deduction for the receipts of the sale of food at retail food stores ("hold harmless distribution"), and establishes a new schedule of distribution equal to 1.225 percent of food sales for which the retail food tax credit is claimed for fiscal year 2010-2011 and 1.05 percent for fiscal year 2011-2012 and each fiscal year thereafter (Sec. 5). -Increases the compensating tax from 5 to 5.125 percent, which is imposed on tangible property that was (Sec. 10):

-Manufactured by the individual using property in the state; -Acquired as a result of a transaction with an individual located outside of the state that would have been subject to the gross receipts tax had the property been acquired from an individual in the state; or -Acquired as a result of a transaction that was not initially subject to this tax or the gross receipts tax but should have been as a result of the buyer's subsequent use of the property.

-Expands income tax liability to include state and local income tax and sales tax deductions claimed on an individual's federal tax return (Sec. 7). -Expands income tax deductions for taxable years beginning January 1, 2011 to include the amount of adjusted gross income that represents a refund of state and local income tax and sales taxes that were deducted for federal tax purposes in taxable years beginning January 1, 2010 (Sec. 7). -Expands the Low-Income Comprehensive Tax Rebate by specified amounts depending on income levels, including, but not limited to, increasing the income threshold for an individual to be qualified from $22,000 to $24,000 income level (Sec. 8). -This is a substitute bill sponsored by the Senate Committee on Finance.