Poll: Business leaders believe NM’s gross receipts tax holds our economy back

New Mexico’s gross receipts tax has been a target of the Rio Grande Foundation since day 1. We have always believed that New Mexico should shift the tax to resemble a sales tax rather than one that includes taxes on top of taxes and also includes numerous business-to-business taxes (like on construction or contracted services including medical). The revamped NAIOP (now CREDA) group recently polled its members and found that businesses overwhelmingly agree that the GRT is a big problem.

“93% — said the state’s GRT makes business harder, with 60% saying it makes business ‘significantly’ more difficult. Meanwhile, less than 10% said they weren’t sure or felt the tax is reasonable or has little to no impact.”

Allen Sigmon (a local developer) developed projects in Denver and Albuquerque around the same period last year. Without GRT, Sigmon said the Denver hotel cost his company $4 million less than the Albuquerque hotel.

“The fact that New Mexico taxes construction projects and our neighbors immediately around us don’t makes us absolutely less competitive,” Sigmon said.

Mackenzie Bishop, co-owner of local homebuilder Abrazo Homes (and a guest on the Tipping Point NM podcast), agreed. He said GRT has always been tough for the construction industry — but because of increased costs of labor, materials and borrowing, it has become an increasingly heavy burden.

“When things get tight, our disadvantages become more profound, and GRT is probably one of our most profound disadvantages as a state,” Bishop said.