Governor Susana Martinez announced today that she has signed the New Mexico Jobs Package, a sweeping tax reform bill that will put New Mexico on a more competitive footing within the region and help to diversify and strengthen the state's economy. The bill was the result of ongoing discussions and compromise between the governor and leadership from both parties in the House and Senate. The package makes New Mexico more competitive with neighboring states and helps businesses within the state retain and hire more employees.
"During my State of the State address, I stressed the need for New Mexico to diversify our economy and compete for jobs, particularly in the face of federal budget cuts that disproportionately hurt our state," said Governor Martinez. "Thanks to a willingness to work together and compromise, we were able to pass a major tax reform bill that lowers the tax we levy on businesses to a rate that falls below the national average, ends penalties on manufacturers who want to create jobs here in New Mexico, and moves us forward in a way that reduces our state's dependence on the federal government during very uncertain budgetary times in Washington."
The New Mexico Jobs Package:
- Reduces the tax rate on businesses from 7.6% to a much more competitive level of 5.9%, bringing New Mexico below the national average and making us more competitive with our regional neighbors.
- Allows for a single sales factor option for manufacturers in New Mexico, making our state competitive with the 25 other states that already have the single sales factor. New Mexico was recently ranked first in the nation in export growth, and without a single sales factor, New Mexico would continue punishing exporting manufacturers for adding jobs and growing their facilities in our state.
- Includes a combined reporting provision to address tax fairness issues with large retailers, while
also providing an incentive for these retailers to bring their non-retail operations to New Mexico,
such as distribution centers, warehousing, back-office, and other functions.
- Includes film incentive legislation that preserves the predictability of the budget cap while
providing additional incentives to longer-term TV productions that shoot in NM.
- Fixes the high-wage tax credit and tightens the manufacturing GRT legislation to ensure they
apply to the intended activities.
- Slowly phases out the hold harmless subsidy for cities and counties over 17+ years, including a
two-year planning period -- a very reasonable and prudent approach that differs greatly from the
way it had been previously proposed.
"Republicans and Democrats came together and passed a game-changing jobs package that will level the playing field with our surrounding states and help New Mexico compete for new business, new investment, and new jobs," Governor Martinez said. "I'm proud of the fact that, in a bipartisan way, we answered the call to compete. It's not a perfect package, and no one got everything they wanted. But It certainly puts New Mexico in a much stronger position to compete for jobs."