Food Tax Repeal

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2017 Legislative Update

On December 15, 2016, the New Mexico Revenue Stabilization and Tax Committee considered legislation to reimpose the regressive food tax on New Mexico families (see coverage from KRQE News 13 and KOAT News 7). The food tax was presented as one piece of a much larger “tax reform” package aimed at raising revenue for the state. Yet the legislators pushing the food tax never answered one important question: how is it that 34 other states are able to balance their budgets without taxing food?

The tax reform package including the food tax was introduced as House Bill 412 during the 2017 session, along with several other bills that also proposed taxing food (Senate Bills 441, 416, and 496). We worked closely with a diverse coalition of other organizations to oppose these bills, and we were gratified when House Speaker Brian Egolf declared the food tax a “deal breaker” and the House voted unanimously to remove it from House Bill 412 before passing it. The Senate ultimately did not act on that bill, and none of the other food tax bills got any traction. We will continue working with our partner organizations to oppose future efforts to bring back the food tax.

Issue Summary

foodtaxcartoonIn late 2001, with the release of our fourth policy report, Think New Mexico launched a campaign to repeal New Mexico’s food tax.

At that time, New Mexico was one of only nine states that continued to fully tax food, along with Mississippi, Alabama, and West Virginia. This antiquated tax was extremely regressive, burdened working families, and worsened the state’s hunger problem.

Our bipartisan legislation to abolish the food tax came extremely close to passing in the 2002 legislative session, but ran out of time at the very end. In 2004, Think New Mexico teamed up with Governor Bill Richardson and House Speaker Ben Lujan to champion a successful bill to repeal the taxes on both groceries and selected medical services.

As of January 1, 2005, food is exempt from taxation in New Mexico.

The 2010 Veto of the Food Tax Reimposition

foodtaxcartoonjonathanrichards2010On March 24, 2010, Governor Richardson vetoed the reimposition of the food tax that had been approved during a special legislative session earlier that month.

The movement to reimpose the food tax emerged in late 2009 when the Greater Albuquerque Chamber of Commerce proposed it as an alternative to raising corporate or personal income taxes. Think New Mexico launched into action against this threat, which would have taken over $250 a year out of the pockets of the average family of four.

During the regular legislative session, a bill passed the Senate that would have taxed more than half of New Mexico’s staple foods (because the taxed foods included white flour tortillas, it was quickly dubbed the “tortilla tax”). Think New Mexico joined with other organizations to oppose the tortilla tax, and it was unanimously tabled in its first House committee. This chapter of the food tax saga came to an end when the Governor line-item vetoed the reimposition of the city and county portion of the food tax that was included in the tax package passed during the 2010 special session.

The Third Defeat of the Food Tax

foodtaxcartoon2010Late at night on the final evening before the 2013 legislative session concluded, the Senate Finance Committee unexpectedly passed a complex tax package that, among other things, would have reimposed the food tax on New Mexico families — an idea that had not been raised during the first 59 days of the 60-day session. Just as we had in 2010, Think New Mexico sprang into action to defeat it once more.

We alerted the media, our allies in the legislature, and our thousands of supporters across the state, who sent 1,120 emails to their legislators asking them to oppose the food tax in the final hours of the session. By the time the tax package came up for a full vote of the Senate less than an hour before the end of the session, we were relieved and gratified to find that the food tax was no longer included.

2015-2016 Legislative Update

Although two prior attempts to reimpose the food tax were defeated, in October 2013 the New Mexico Municipal League, which represents the state’s mayors and city councils, announced that it would be bringing legislation to reimpose the food tax during the 2015 legislative session. The proposal was adopted as a high priority item by the Municipal League in August 2014 and draft legislation was presented to the legislature in December 2014.

In January 2015, Senate Bill 274 was introduced to reimpose the food tax. Think New Mexico worked hard to defeat it, and although it passed one Senate committee in a vote held without a public hearing, the bill was stopped before it reached the Senate. Once again, in 2016 legislation was introduced to reimpose the full food tax, and once again we successfully opposed it. However, we knew that this was not the last we had heard of the food tax.

News Coverage

newspapericon-smallRead an op-ed by Think New Mexico Executive Director Fred Nathan making the case for taxing tobacco and alcohol, not food and medicine • March 18, 2017

tvicon-smallWatch coverage from KRQE News 13 and KOAT News 7 about the proposal to bring back the food tax in 2017 • December 15-20, 2016

blogicon-smallRead commentary by Algernon D’Ammassa on KRWG New Mexico about why we should “flush the food tax!” • December 27, 2016

newspapericon-smallRead Think New Mexico’s 2015 opinion editorial opposing the reimposition of the food tax, which was published in the Albuquerque Journal, the Carlsbad Current-Argus, the Farmington Daily Times, the Gallup Independent, the Grant County Bea,t the Hobbs News-Sun, the Jal Record, the Las Cruces Sun-News, the Las Vegas Optic, the Los Alamos Monitor, the Mountain View Telegraph, the Rio Rancho Observer, the Ruidoso News, the Santa Fe New Mexican, the Silver City Daily Press, the Taos News, and the Valencia County News-BulletinJanuary-February 2015

newspapericon-smallRead Santa Fe New Mexican and Albuquerque Journal articles on the Municipal League’s proposal to reimpose the food tax in 2015 • January 2015

radioicon-smallListen to KVSF 101.5 radio story on the proposed 2015 reimposition of the food tax • December 29, 2014 (mp3, 14:32)

tvicon-smallWatch KOB TV news story on the 2015 proposal to bring back the food tax • December 23, 2014 (2:14)

tvicon-smallWatch KRWG Las Cruces news segment on the proposed 2013 reimposition of the food tax • October 30, 2013 (2:40)

tvicon-smallWatch KRQE TV news segment on the proposed reimposition of the food tax in late 2013 • October 23, 2013 (2:30)

radioicon-smallListen to KSFR Santa Fe Public Radio report on the proposed reimposition of the food tax in late 2013 • October 25, 2013 (mp3, 6:33)

 

blogicon-smallRead Bread New Mexico’s blog entry opposing the proposed 2013 reimposition of the food tax • October 29, 2013

newspapericon-smallRead Albuquerque Journal article on the proposed 2013 reimposition of the food tax • October 22, 2013

newspapericon-smallRead editorials by Farmington Daily Times, the Las Cruces Sun-News and the Silver City Sun-News commending Governor Richardson for vetoing the food tax

tvicon-smallWatch Governor Richardson’s statement on his decision to veto the reimposition of the food tax.

newspapericon-smallRead the opinion editorial by Think New Mexico making the case for why Governor Richardson should veto the food tax • March 2010

newspapericon-smallRead editorials by the Carlsbad Current-Argus, the Edgewood Independent, the Las Cruces Sun-News, the Rio Grande Sun, and the Santa Fe New Mexican urging Governor Richardson to veto the reimposition of the food tax.

radioicon-smallListen to KUNM Public Radio report on the proposed reimposition of the food tax in 2010 • January 19, 2010 (mp3, 4:52)

newspapericon-smallRead Deming Headlight editorial opposing the reimposition of the food tax (which also ran in the Carlsbad Current-Argus, the Las Cruces Sun-News, and the Silver City Sun-NewsJanuary 1, 2010

newspapericon-smallRead Taos News editorial opposing the reimposition of the food tax • January 7, 2010

newspapericon-smallRead Rio Grande Sun editorial opposing the reimposition of the food tax • December 17, 2009

newspapericon-smallRead Santa Fe New Mexican article about how all five gubernatorial candidates oppose the reimposition of the food tax • December 22, 2009

newspapericon-smallRead the opinion editorial by Think New Mexico and the New Mexico Conference of Catholic Bishops opposing the reimposition of the food tax, which was published in 23 newspapers across the state, including the Albuquerque Journal, the Santa Fe New Mexican, and the Rio Grande SunDecember 2009

newspapericon-smallRead Santa Fe New Mexican editorial lauding the implementation of the food tax repeal • January 5, 2005

newspapericon-smallRead Las Vegas Daily Optic editorial celebrating the repeal of the food tax • January 4, 2005

newspapericon-smallRead Albuquerque Tribune article “Shoppers Praise End to Food Tax” • December 30, 2004

newspapericon-smallRead Ruidoso News article on passage of food tax repeal legislation • December 24, 2004

newspapericon-smallRead Santa Fe New Mexican editorial on food tax repeal legislation • February 20, 2004

newspapericon-smallRead Santa Fe New Mexican article about Think New Mexico’s food tax repeal bill, championed by Governor Richardson and House Speaker Ben Lujan • February 7, 2004

newspapericon-smallRead Santa Fe New Mexican article on Governor Richardson’s support for the food tax repeal • January 10, 2004

newspapericon-smallRead Think New Mexico’s opinion editorials on repealing the food tax • January 2003August 2003

newspapericon-smallRead Associated Press article about how New Mexico’s food tax burdens working families • January 19, 2002

newspapericon-smallRead Santa Fe New Mexican editorial on the food tax repeal • November 4, 2001

Resources

foodtaxmap2009According to a 2012 report by the Tax Foundation and a 2009 report by the Center on Budget and Policy Priorities, only Alabama and Mississippi still fully tax the sale of food

Read Stateline article on food tax repeal efforts in other states • January 29, 2007

Questions about how the food tax repeal affects you as a consumer or business? Check out the New Mexico Taxation & Revenue Department’s Fact Sheet on the Food Tax Deduction.

 

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