State methodology violates fairness with double taxes

YOUR RECENT editorial “NM hits business that couldn’t see through pottax haze” does highlight a significant problem with the high tax rates and double taxation of New Mexico businesses.

The recreational marijuana excise tax rate of 12%, while significant, pales in comparison to the 26% excise tax rates applied to New Mexico racetracks and casinos. New Mexico racetracks and casinos also pay another 20% to race purses. This results in a combined state mandated “tax” of 46%. These “taxes” are in addition to gross receipts tax, pari-mutuel taxes, capital outlay taxes, taxes on the purchase of gaming devices and property taxes.

New Mexico racetracks and casinos compete with tribal casinos and nonprofit organizations that pay less than 10% in gaming excise taxes and no gross receipts tax. The huge excise tax disparity of approximately 16% is more incredulous given that revenue is earned from the exact same slot product. Compounding the inequity is tribal casinos pay no gaming excise tax on recently added sports book wagering revenue.

Racetracks and casinos contribute significantly to the New Mexico economy but are vulnerable to adverse economic conditions. Several have struggled in recent years with increased gaming competition and declines of horse racing patrons. These businesses were also severely impacted by a complete shutdown of operations for over a year due to mandated COVID-19 health orders.

Quoting the Albuquerque Journal editorial statement, racetrack and casino taxation could be seen as another example of New Mexico “squeezing businesses for every nickel and dime they can possibly bag.” (Duke) Rodriquez, president/CEO of Ultra Health, was right to say the state methodology “really does violate basic tax fairness principals of taxing.”

An impact analysis of exorbitant and pyramiding taxes should be initiated by New Mexico legislators to bring fairness and equity to all New Mexico businesses. RETA JONES, CPA

Albuquerque