The state Legislature will consider separate bills that would allow microbreweries and small wineries to produce more while holding down their liquor excise taxes.
Both measures are intended to help the little guy get a bit larger without any ill effects from that growth, said state Sen. Timothy Keller, D-Albuquerque. A third bill would create a break for the state's most famous agricultural industry - chile.
The proposal would allow farmers to deduct from their taxes the value of equipment directly related to chile production or processing. The tax breaks would be available from the summers of 2013 to 2019.
All three bills were endorsed last week by the Legislature's Revenue Stabilization and Tax Policy Committee. They will be introduced in the 60-day session starting Jan. 15.
One bill would redefine microbrewers in New Mexico.
The term would apply to a person who produces fewer than 15,000 barrels of beer a year. Existing law says a microbrewer is one who makes up to 5,000 barrels annually.
Those who qualify as microbrewers and sell beer in New Mexico would continue to pay a liquor excise tax of 8 cents a gallon. Other beer is taxed at 41 cents a gallon.
Legislators first revised the definition of microbreweries in 2000. Until then, those small producers were taxed at 25 cents a gallon.
The new bill, sponsored by Sen. Sue Wilson Beffort, R-Sandia Park, would mean a microbrewer could triple his output and still not pay a higher tax rate.
Most New Mexico wineries would receive similar help in a bill sponsored by two Deming legislators, Sen. John Arthur Smith and Rep. Dona Irwin. Their proposal would redefine "small winegrower" as one who produces up to 1.5 million liters of wine a year. The existing threshold is 950,000 liters. Winegrowers would be taxed 10 cents a liter on the first 80,000 liters sold and 20 cents for up to 950,000 liters. The tax rate would rise to 30 cents a liter for production up to 1.5 million liters.
In comparison to the big growers, the rates would be a bargain. For instance, a company from the Napa Valley of California that sells 2 million liters of wine in New Mexico would pay taxes of 45 cents a liter.
Tim McGinn, owner of Arena Blanca Winery in Alamogordo, said he liked the legislation to help small businesses such as his gain their footing. "It's about creating a thriving and successful New Mexico industry," McGinn said.
His winery employs four people and produces about 15,000 liters a year, numbers that would keep him in the lowest tax bracket as he tries to expand his business. McGinn also owns a second agricultural business, Pistachio Tree Ranch, and says he has a total of 17 employees.
The bill to reduce production and processing taxes on New Mexico chile growers will be sponsored by Sen. George Munoz, D-Gallup.
New Mexico is famous for its chile, but the fields are shrinking.
In 1992, a total of 35,000 acres of chile were grown in the state. By 2010, the chile production had declined to 8,800 acres.
A related concern is that employment declines as do fields of red and green chile.
Milan Simonich, Santa Fe bureau chief of Texas-New Mexico Newspapers, can be reached at email@example.com or 505-820-6898. His blog is at nmcapitolreport.com