Bill > HB275

This bill proposes to eliminate New Mexico's individual income tax by setting the state income tax rate to zero percent for all taxpayers starting January 1, 2026. Under this legislation, residents and individuals who earn income in New Mexico would no longer be required to pay state income tax, though they may still voluntarily file a tax return if they choose. The bill removes the existing progressive tax rate structure, which previously had different tax rates based on income levels and filing status (such as single, married filing jointly, or married filing separately). While filing a state income tax return would no longer be mandatory, individuals who are required to file a federal tax return may still elect to file a New Mexico state return. The changes would apply to all taxable years beginning on or after January 1, 2026, effectively creating a zero percent income tax rate for the state and fundamentally changing the state's taxation system.

Budget and Finance

https://www.nmlegis.gov/Legislation/Legislation?chamber=H&legtype=B&legno=275&year=25