News & Events
Barela says GRT reform is on his radar
21 August 2013
Albuquerque Business First | Dan Mayfield
Single sales factor and antipyramiding tax policies could be just the start of tax reform in New Mexico, if Economic Development Cabinet Secretary Jon Barela has his way.
Though the state has made several changes to its tax policies in recent years, Barela said he wants to see the state make a wholesale shift from a gross receipts tax to a pure sales tax.
“The conversation is already happening,” he said.
New Mexico is one of only a few states that has a broad gross receipts tax.
The system of taxing an enterprise’s total revenue worked, Barela said, after World War II as New Mexico attracted millions in federal dollars at the federal labs and military bases.
“Back in the day you didn’t have portability of work,” he said.
Gross receipts funding, though, helps New Mexico’s rural communities provide services.
“I will tell you that we have to make sure it’s a balance. But we have to recognize that local communities need to provide services. It’s going to be a longer-term issue,” Barela said. “A lot of people agree that something needs to be done about that.”
A shorter-term issue, though, is generating more access to capital for startups in New Mexico.
“That’s a universal issue that a lot of geographies have. [The Economic Development Department] continues to focus on making connections to what capital does exist. The advantage in Silicon Valley is there is more capital. New Mexico has to catch up. The SIC [State Investment Council] and the Small Business Investment Corp. does play a role,” Barela said.
The department will continue its push to increase LEDA (Local Economic Development Act) funding.
“We had zero in the first two years [of the Martinez administration], to $3.3 million,” Barela said. “That’s better than nothing.”
505.348.8308 | dmayfield@bizjournals.com
