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Sharer pushes forward on tax reform measure

Farmington senator's bill calls for a 2-percent flat tax to replace corporate income tax, estate tax and others

Hannah Grover
hgrover@daily-times.com
State Sen. William Sharer

FARMINGTON — Tax reform efforts are gaining momentum in the state Legislature as elected officials struggle with a budget crisis, according to Sen. William Sharer.

The Farmington Republican is among the lawmakers who have introduced tax reform bills in the state House and Senate this legislative session.

This is the third year Sharer has introduced a bill calling for a 2-percent flat purchase tax that would replace various other taxes. The bill has been referred to the Senate Finance Committee.

If passed, the bill would eliminate the corporate income tax, estate tax, compensating tax, vehicle excise tax, insurance tax and other taxes. It would also eliminate tax deductions, credits and exemptions. Instead, there would be a 2-percent gross receipts tax that would include food purchases, as well as Internet sales. Of that 2 percent, 1 percent would go to the state, and the other 1-percent would be divided between cities and counties.

Sharer said there are three keys to a good tax reform bill — it has to be simple, it has to raise enough money to pay the bills and its simplicity should attract new industries to New Mexico.

Sharer believes his bill could serve as a base for tax reform in New Mexico, but he acknowledged it faces an uphill battle.

"We're not going to pass my bill as it is written," Sharer said when reached by phone Friday in Santa Fe.

Farmington City Manager Rob Mayes said he supports the concept behind Sharer's bill, which is broadening the tax base while lowering tax rates.

Mayes said tax reform efforts should address tax exemptions. He said the key to having a gross receipts tax-based system is having a broad tax base with low rates. Lowering tax rates while broadening the base could also make the state more attractive for businesses, Mayes said.

"We want to see the tax base restored so we can lower tax rates," he said.

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652.