New Mexico Advocacy | NAWBO

NAWBO Advocacy

Advocacy

New Mexico Advocacy

SpeakOut logo 2019

Tax Reform: The challenge of “Less is More”

Background

NAWBO NM recognizes that the state’s current revenue generation infrastructure does not routinely model equity, simplicity or sustainability. Each taxation pathway has produced unintended consequences for New Mexico and seriously impacts small business.

The Legislature has spent many years in many ways looking at the components of the state’s taxation system and while tinkering with specific areas has not appeared able to address it as a holistic system. The result for small business, individuals and all stakeholders is uncertainty and compliance insecurity. This is particularly evident in two categories of tax.

Gross Receipts Tax

New Mexico’s Gross Receipts Tax has continued to morph into a tangled web that is difficult to navigate and truly picks favorites. Small business is not generally a favored stakeholder, even though small businesses (Under 100 employees) represent 99% of all businesses in New Mexico. The implementation of this tax has proved regressive on both goods and services. Pyramiding continues on business to business transactions directly impacting the ability to compete with out-of-state companies.

Personal Income Tax

The vast majority of New Mexico’s small businesses are structured as sole proprietorships and limited liability companies/partnerships. The significance is that both are taxed as individuals through personal income tax.

A small business can look like a “high wage” individual who is being paid by private or public sector entity. However for small businesses, instead of the income being of benefit to the individual or family, it is the source of revenue for the enterprise to keep its doors open, grow and, more importantly to be a job creator.

NAWBO New Mexico Supports………

The New Mexico Legislature constructively implementing reform as informed by the 2018 Legislative Gross Receipts study by Ernst & Young. The study provides the ability to now assess strategies that result in the original goal of “low and broad” taxation with the elimination of loopholes and other exceptions then immediately embark with determination, transparency and inclusivity on making the courageous changes needed.

The New Mexico Legislature recognizing that small businesses are not “high wage” individual income tax payers and include this distinction in income tax policy reforms moving forward.

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NAWBO PUBLIC POLICY PRINCIPLES (developed by Minda McGonagle and approved by the PPC)

Doing Well & Doing Good

NAWBO members believe business should be force for good in New Mexico. We as women business owners invest in and support our communities in a variety of ways. We know the sustainability of serving customers and retention of employees are enhanced by support of philanthropic, community-based and public policy efforts. The myriad benefits from engaging in these endeavors help to make our state a better place to live, work and grow a business.

Diversity & Inclusion

NAWBO members believe to strengthen New Mexico’s long-term economic vitality a wide diversity of perspectives must contribute to the public policy dialogue. We actively support equity, diversity and inclusion in the workplace.

Relationship & Engagement

NAWBO members appreciate the fundamental importance of government and the necessity of relationships with our public servants as New Mexicans and business owners. We value the opportunity to be engaged in fostering public policy that supports a robust, inclusive and resilient state as a whole and individual economic business success.

Costs & Complexity

NAWBO members believe that the costs and regulatory implications on business must be given every consideration in the development of public policy. We ask that tax policies are contemplated holistically and with the awareness that most small businesses are sole proprietors and LLCs. We respect the need for regulations to serve as guardrails that are objective, impartial and consistent then developed with clear meaning and implemented through fair-minded compliance.

Workforce & Infrastructure

NAWBO members believe that economic development and business thrives where the workforce is dynamic and infrastructure is well resourced. We want strengthening of the state’s educational system as it is the key to unlocking the potential of workers. Focusing on improving access to high quality, affordable early education, building a robust STEM pipeline and aligning workforce training resources to meet employers’ needs are prerequisite. We understand that investment in foundational resources including broadband and transportation solutions directly support economic development and quality of life goals.

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