New Mexico Gov. Panel Looking at New Sales Tax

ALBUQUERQUE, N.M. – After turning back a banker-backed tax initiative last February, New Mexico credit unions are girding for possible new combat this fall on a proposal to impose a 5.85% sales tax on state-chartered CUs. Officials of the New Mexico Credit Union League said July 21 they hope to convince a State Commission on Tax Reform that the revenue generated by such a tax would be small and create processing burdens to affected institutions. “We have an education process with our lawmakers to make sure this proposal does not make it into bill form,” said John Radebaugh, president of the League. The Blue Ribbon Tax Commission, set up by Gov. Bill Richardson to promote state economic development and simplify the revenue structure, is slated to come up with tax recommendations by Oct. 1. The commission has been floating a proposed 5.85% gross receipts tax on products which it says would bring in $2 million, but the League estimates the amount would be far smaller and hard for CUs to track in light of data processing costs. CUs would have to pass along the tax to their members, argued CU executives. Phyllis Crawford, chairman of the League and president of the $9 million Navajo Mine Credit Union, Kirtland, said she sympathizes with the idea of building the tax base “and I can understand some of the reasoning,” but hitting exempt CUs is not the solution. The proposal would impact “just a couple of the big credit unions” with smaller CUs like her own as she understands it spared by size criteria in the commission’s proposal. Crawford said she is indebted to state lawmakers for defeating in committee a proposed tax bill in February put forward by the state’s independent banker organization. That bill, shelved by the House Tax and Revenue Committee, would have created a 5% franchise tax on state CU’s over $100 million in assets. “We had a good year in the legislature and we want to continue the relationship we’ve had,” said Crawford. “If we do our part, I think we can.” [email protected]