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New Mexico businesses will receive more than $700 million in financial assistance from bills already passed by the 2021 New Mexico Legislature and signed by Gov. Michelle Lujan Grisham.
The New Mexico Finance Authority is working on the Local Economic Development Act grant and Small Business Recovery loan processes, with applications expected to be available by early May, but the “restaurants gross receipts tax exemption” for eligible food and beverage establishments already is in effect.
The tax exemptions are part of Senate Bill 1 (SB 1), which also includes a $600 tax rebate for lower-income residents and households eligible for the New Mexico Working Family Tax Credit in 2020. The rebate must be claimed before June 2022. More information on that tax rebate is available in a guidance sheet on the New Mexico Taxation and Revenue Department’s website, tax.newmexico.gov.
After passing the Senate unanimously 42-0 on Feb. 10 and being approved by the House of Representatives 66-1 on Feb. 24, SB 1 was signed into law March 3 and took effect immediately.
The GRT exemption is for sales at businesses from March 1 through June 30. In general, it does not cover fast-food business or those that sell pre-packaged beverages. Businesses that are eligible, however, include licensed or permitted craft distillers, bars, brewers, restaurants, mobile food trucks and winegrowers.
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According to the governor’s office, dining and drinking businesses statewide are expected to save $90 million during the next four months due to the tax exemptions.
The owner of a local coffee shop and eatery said her first impressions of the exemptions are good, but she would like more information on their exact implementation.
“My first thought was that it is very generous of the state of New Mexico and it could be very helpful,” said Ann Baker of Stellar Coffee. “For Stellar, it will help offset losses endured while our dining room was required to be closed.”
GRT is a major source of revenues for local governments, so the law also provides “hold harmless” distributions to county and municipal governments to cover the exemptions for restaurants and related businesses during the next four months.
Senior Writer Lisa Dunlap can be reached at 575-622-7710, ext. 351, or at email@example.com.