Local Gross Receipts Tax Increases Being Considered
(Deming) – City and county officials are looking at raising gross receipts taxes to offset the impending phase-out of state funds that have been compensating the governments since 2005 when taxes on food and medical distributions in New Mexico ceased being collected.
And if both local branches of government impose the maximum allowed by the legislature, the sales tax in Deming will jump to 8.25% as of July 1st.
City Administrator Aaron Sera said the city will hold a public hearing Thursday at 9 a.m. on adding three-eighths of one percent to the city’s 7.5% sales tax to counter the 15-year phase-out of state “Hold Harmless” funds.
If approved the by the council, the city’s tax increase would raise the local sales tax from 7.5% to 7.825%.
According to information from the New Mexico Taxation and Revenue Department, the city has received over $1.1 million dollars annually in “Hold Harmless” distributions in recent years.
Sera said the tax increase would generate approximately $850,000 new dollars annually, which would still leave the city short at the end of the 15-year phase-out.
Interestingly, Luna County also is looking at imposing three-eighths of 1% sales tax under the same authority granted by the legislature, although the county receives less than $300,000 annually in “Hold Harmless” funds.
If the commissioners approve the increase, it would raise the tax outside the incorporated areas of the county to 6.875% from the current 6.5%, but would double the increase in the city of Deming to 8.25% if both locally elected bodies pass the increase.
The county’s tax increase would raise approximately $900,000 for the county budget – three times what they receive in “Hold Harmless” payments.
The county reportedly will consider the increase at the commission’s February 12th regular meeting.
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Deming, NM 88031 (88030)
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Varsity Deming 44 - Onate 55
JV Deming 46 - Onate 50
Freshmen Deming 45 - Onate 62
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