Food Tax Repeal
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2021 Legislative Update
In the summer of 2020, as New Mexicans sheltered in place to prevent the spread of Covid-19, we learned that some grocery stores – primarily large out-of-state chains – were taking advantage of a loophole in the tax code to tax the sale of food that New Mexicans ordered for delivery, even though the sale of food has been tax-exempt in New Mexico since 2005.
This meant that the same fruit, vegetables, and baby food that would be tax-free if a New Mexican walked into a store and purchased them were being taxed at rates as high as 9% (over and above any delivery fees) if a New Mexican ordered them delivered to their home. This was particularly harmful for elderly, disabled, and immunocompromised New Mexicans who were most at risk of serious illness from the pandemic.
With the help of our supporters, who sent over 1,200 emails to the governor urging her to take action, the Secretary of Taxation and Revenue issued a directive clarifying that food should not be taxed in most instances when New Mexicans order it from a grocery store online and have it delivered to their homes.
However, that victory was only a temporary one, as a change in state tax law that is scheduled to take effect in the summer of 2021 would override the state directive and bring back the tax on delivered groceries.
In order to permanently end to the taxation of delivered groceries in New Mexico, we worked to pass House Bill 98, an omnibus bill that makes many minor corrections to the state tax code. On page 51, it revises the food tax exemption so that instead of exempting the sale of food “at a retail store” it exempts the sale of food “by a retail store” – no matter where the sale takes place. This will ensure that no tax is imposed on groceries that are delivered to New Mexicans.
House Bill 98 passed both the House and Senate unanimously and was signed into law by Governor Lujan Grisham.
In 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
On 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
Late 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.
2015-2017 Legislative Updates
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.
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.
2018 Legislative Update
During the 2018 legislative session, Senator Cliff Pirtle introduced Senate Bill 129, which would have reimposed the food tax on all groceries other than meat, flour tortillas, and items eligible for WIC, the Women, Infants, and Children supplemental nutrition program.
We sent Senator Pirtle a letter (read it here) explaining how unworkable this would be. WIC excludes many locally produced foods, like goat cheese, chile powder, and all nuts, including New Mexico pecans and pistachios. Moreover, even for items that are potentially WIC-eligible, only specific brands and specific sizes of foods are included in the program.
The first committee to hear the bill tabled it after hearing opposition from a wide array of stakeholders, including the AARP, the New Mexico Chile Association, the New Mexico Conference of Catholic Bishops, the New Mexico Center on Law & Poverty, the Center for Civic Policy, New Mexico Voices for Children, the National Association of Social Workers, and the New Mexico Coalition of Food Banks.
2019 Legislative Update
On the final day for bill introductions during the 2019 legislative session, not one but two bills were introduced to reimpose the food tax: Senate Bill 584, sponsored by Senate Finance Committee Chair John Arthur Smith and the ranking Republican on the committee, Senator Steve Neville, and Senate Bill 585, sponsored by Senator Smith and Senate Minority Leader Stuart Ingle. A third tax bill, Senate Bill 421 sponsored by Senator Carlos Cisneros, also included the food tax.
Think New Mexico opposed all three bills alongside allies including the AARP, the New Mexico Conference of Catholic Bishops, New Mexico Voices for Children, and the New Mexico Coalition of Food Banks. The Santa Fe New Mexican and Albuquerque Journal published excellent front page articles detailing the negative impact this regressive tax would have on New Mexico families.
Although the food tax was repeatedly promoted on the Senate Floor, strong and consistent opposition from Governor Michelle Lujan Grisham, Speaker Brian Egolf, and the public prevented any of the bills from coming up for a hearing.
Read an Albuquerque Journal article about both 2022 gubernatorial candidates committing to veto any legislation that would bring back the food tax • October 17, 2022
Read a guest editorial from Think New Mexico’s Associate Director Kristina Fisher urging lawmakers to take the food tax off the table • October 5, 2022
Read an article from the Las Cruces Sun News about Think New Mexico’s work to stop Walmart from taxing food they deliver to New Mexicans • July 21, 2021
Read an opinion editorial by Fred Nathan about Think New Mexico’s work to permanently end the taxation of delivered groceries • April 4, 2021
Read articles from the Santa Fe New Mexican and Albuquerque Journal about legislation introduced during the 2019 legislative session to bring back the food tax • February 20, 2019
Read a column from Milan Simonich in the Santa Fe New Mexican about why the the food tax should stay “dead and buried” • December 23, 2018
Read an Albuquerque Journal article about the legislature rejecting a 2018 bill to reimpose the food tax • February 3, 2018
Read a column by syndicated columnist Tom McDonald opposing the regressive food tax • February 1, 2018
Read 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
Watch coverage from KRQE News 13 and KOAT News 7 about the proposal to bring back the food tax in 2017 • December 15-20, 2016
Read commentary by Algernon D’Ammassa on KRWG New Mexico about why we should “flush the food tax!” • December 27, 2016
Read 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-Bulletin • January-February 2015
Read Santa Fe New Mexican and Albuquerque Journal articles on the Municipal League’s proposal to reimpose the food tax in 2015 • January 2015
Listen to KVSF 101.5 radio story on the proposed 2015 reimposition of the food tax • December 29, 2014 (mp3, 14:32)
Watch KOB TV news story on the 2015 proposal to bring back the food tax • December 23, 2014 (2:14)
Watch KRWG Las Cruces news segment on the proposed 2013 reimposition of the food tax • October 30, 2013 (2:40)
Watch KRQE TV news segment on the proposed reimposition of the food tax in late 2013 • October 23, 2013 (2:30)
Listen to KSFR Santa Fe Public Radio report on the proposed reimposition of the food tax in late 2013 • October 25, 2013 (mp3, 6:33)
Read Bread New Mexico’s blog entry opposing the proposed 2013 reimposition of the food tax • October 29, 2013
Read Albuquerque Journal article on the proposed 2013 reimposition of the food tax • October 22, 2013
Read editorials by Farmington Daily Times, the Las Cruces Sun-News and the Silver City Sun-News commending Governor Richardson for vetoing the food tax
Watch Governor Richardson’s statement on his decision to veto the reimposition of the food tax.
Read the opinion editorial by Think New Mexico making the case for why Governor Richardson should veto the food tax • March 2010
Read 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.
Listen to KUNM Public Radio report on the proposed reimposition of the food tax in 2010 • January 19, 2010 (mp3, 4:52)
Read 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-News • January 1, 2010
Read Taos News editorial opposing the reimposition of the food tax • January 7, 2010
Read Rio Grande Sun editorial opposing the reimposition of the food tax • December 17, 2009
Read Santa Fe New Mexican article about how all five gubernatorial candidates oppose the reimposition of the food tax • December 22, 2009
Read 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 Sun • December 2009
Read Santa Fe New Mexican editorial lauding the implementation of the food tax repeal • January 5, 2005
Read Las Vegas Daily Optic editorial celebrating the repeal of the food tax • January 4, 2005
Read Albuquerque Tribune article “Shoppers Praise End to Food Tax” • December 30, 2004
Read Ruidoso News article on passage of food tax repeal legislation • December 24, 2004
Read Santa Fe New Mexican editorial on food tax repeal legislation • February 20, 2004
Read 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
Read Santa Fe New Mexican article on Governor Richardson’s support for the food tax repeal • January 10, 2004
Read Think New Mexico’s opinion editorials on repealing the food tax • January 2003 • August 2003
Read Associated Press article about how New Mexico’s food tax burdens working families • January 19, 2002
Read Santa Fe New Mexican editorial on the food tax repeal • November 4, 2001
According to a 2012 report by the Tax Foundation and a 2020 report by the Center on Budget and Policy Priorities, very few states 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.