A closer look at the Tax Bill SB 151

Prior to the 2026 legislative session it looked like there might not be a tax bill in Santa Fe. But, there wound up being one (SB 151) and it passed into law. Unfortunately, this is another BAD piece of legislation out of this Legislature. We have rated it a -6 in our Freedom Index because it is an unnecessary and harmful tax increase on New Mexico businesses. When the Legislature and Gov. talk about diversifying our economy they SHOULD mean making New Mexico more economically-competitive, but they usually mean just handing special tax breaks and checks for millions of dollars to various businesses instead.

SB 151 includes a $110 to $120 million annual “increase” in the corporate income tax. Federal tax legislation lowered the federal tax and New Mexico typically would follow that, but instead our Legislature and Gov. specifically acted to keep the tax the same, thus making this a relative (and highly unnecessary) tax hike. Even with other policies stuck into the bill that reduce tax revenues to the state SB 151 results in a completely unnecessary $60-$70 million annual tax increase.  What IS in the rest of the bill?

1. A “refundable” (meaning it can result in outright spending) journalism tax credit equal to 30 percent of the company’s annual wages. The total amount that can be claimed each year is capped at $4 million. We don’t oppose ALL tax credits, but the last thing we need is a GREATER role for government in the media.
2. Gross receipts tax (GRT) deduction for receipts from the sale of construction materials and labor used in the development of affordable multifamily residential housing projects. Yet again the Legislature recognizes the tremendous harm of the GRT on economic activity, but only addresses it in a narrowly targeted way. If this provision eliminated the GRT for ALL residential construction or eliminated it for ALL construction we’d strongly support it, but for ONLY affordable projects, we can’t. 
3. Non-refundable $10 thousand (non-refundable) income tax credit for qualified physicians. We DO support this one although we’d prefer tax reductions for ALL New Mexicans which would be easily affordable. 
4. News printer tax credit. We oppose, see #1 for explanation.
5. Extension of high wage tax credit which rewards employers for every job they create above a certain income threshold through July 1, 2036: This is fine (less than optimal) but is only $10 million annually, a fraction of the corporate income tax hike revenue.

Along with SB 2 which increased taxes on vehicle registrations by 25% this session was shockingly bad for tax hikes considering the continued revenue and spending growth of New Mexico state government. From “free” child care to $308 million spent on quantum computing and many other spending items  New Mexico’s Legislature yet again placed a greater financial burden on New Mexicans.