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    New Mexico Moves to Eliminate Food Tax

    Loss of revenue would be partially offset by a cigarette tax increase.


    SANTA FE, N.M. -- State Lawmakers have introduced a bill that could impact every New Mexican who buys groceries.

    More than half of the state's 42 senators introduced the bill that would eliminate the state's food tax. The bill would phase out over three years the state portion of the gross receipts tax.

    "Think New Mexico," a Santa Fe based group pushing the bill, says the food tax is one that most other states have eliminated or reduced. New Mexico will lose more than $50 million in revenue if the food tax is eliminated, according to the group.

    The legislation intends to make up that loss by increasing taxes on cigarettes by about 60 cents per pack.

    Depending on what part of the state you live in, the gross receipts tax in New Mexico ranges from just over 5 percent to just over 7 percent. New Mexicans pay an average of $6 in taxes for every $100 in groceries.

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