I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
While environmental activists played their part yesterday during demonstrations at the capitol building, going so far as to dress up as solar panels and to sing the tune of “You Are My Sunshine,” their counterparts, the anti-cap-and-trade contingency who has…
Roughly one quarter of University of New Mexico students are unimpressed with the state’s flagship public school, according to a survey that questioned college students about their higher education experiences.
ALBUQUERQUE — New Mexico’s annual August tax holiday takes place this weekend, but three states — Florida, Maryland and Massachusetts — have recently decided to cancel their back-to-school tax holidays because they can’t afford to lose the revenue, Stateline.org reports.
Faced with dwindling gross receipts tax revenue, state legislators could debate whether to keep or dump the tax break in the next legislative session in Santa Fe.
“We may be faced with this situation in the future. Do you want the parents to have the benefit of the or do you want to keep the school doors open?” state Sen. John Arthur Smith, D-Deming, said Friday in an interview with the Independent. The next economic forecast comes out in August, and if the situation has worsened, Gov. Bill Richardson will likely call a special session to focus on the state’s finances.
The tax holiday helps families struggling to pay for back-to-school clothes and supplies, but the state misses out on a significant amount of revenue — an estimated $4.5 million, according to David Abbey of the Legislative Finance Committee.
About $2.7 million is money that would go into the state’s pocketbook, which is significantly lighter these days. (The other $1.8 million would go to local governments.)
This summer gross receipts tax collections are running 3.6 percent below projections according to the New Mexico Economic Summary released last month by the State Legislative Council Service.
“The tax holiday is to help families save money on back-to-school supplies and help spur local economies across our state,” Gov. Richardson said in a press release Friday.
The same released quoted Randy Sanchez, Senior General Manager of Coronado Center, saying the tax break will be a major boost to the economy: “The Tax free weekend is considered a mini-stimulus package for consumers during the back to school season.”
But a tax holiday’s effect on spending is not clear, according to the Stateline report.
“Anything that’s reducing states’ already depleted tax collections is not a good thing, especially a policy like this that has problems in good economic times,” Liz McNichol, a senior fellow at the Center on Budget and Policy Priorities, told Stateline. “Research says (tax holidays) really just move sales from one period to another, so it’s not creating new economic activity; it’s not stimulating business.”
Senator Smith emphasized that families need help now because of the economy.
“Parents and the working families probably need relief more this year than they ever have,” Smith said. “If it’s taken away, it will be perceived as a tax increase… It’s very difficult to put the burden on people who are losing their jobs.”
Smith also said he was surprised that more people don’t take advantage of the tax holiday, noting that he saw shoppers buying school clothes last night — before the tax-break began.
“There was a poll on TV last night showing something like a 60/40 split with 40 percent saying they would take advantage of the holiday and 60 percent saying they could care less. Do the 60 percent have their heads in the sand?”
For details about the tax holiday, including a list of items that can be purchased without tax until Sunday night at midnight, go to the Department of Taxation and Revenue’s Web site. Generally speaking, nontaxable items include:
Clothing or shoes sold for less than $100; however, accessories and special clothing or footwear primarily designed for athletic activity or protective use and not normally worn beyond the scope of the athletic activity or protective use remain taxable;
Desktop, laptop or notebook computers sold for no more than $1,000, and any associated monitor, speaker or set of speakers, printer, keyboard, microphone or mouse sold for no more than $500, and
School supplies students normally use in a standard classroom for educational purposes. The law specifically lists notebooks, paper, writing instruments, crayons, art supplies, rulers, bookbags, backpacks, handheld calculators, maps and globes as deductible during the tax holiday.
It specifically excludes watches, radios, compact disc players, headphones, sporting equipment, portable desktop telephones, copiers, office equipment, furniture or fixtures. The law does not consider such items to be school supplies that students normally use in a standard classroom. Sales of those items are taxable during the three-day period.
