LAS CRUCES – Weeks after the new law went into effect that included groceries in New Mexico’s gross income tax deductions, two people reported taxes on their Walmart supplies.
House Bill 98 was signed by Governor Michelle Lujan Grisham on April 5th and went into effect on July 1st.
William Turner, a Las Cruces resident, noted a $ 6.50 tax on his Walmart order receipt of $ 96.30 on July 14. A woman in Rio Rancho found a tax on her order that same week.
“It’s not a lot of money, but money is money,” said Turner.
During the pandemic, New Mexicans noticed gross revenue tax charges on their food delivered, which would normally be tax-free in grocery stores. Food delivered has become popular due to the COVID-19 pandemic and the need to stay indoors where possible. Turner was one of those who turned to delivered food options.
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“The pandemic has, of course, made delivered food much more attractive,” said Turner. “They’ve been taxing (food deliveries) since we started, which was probably maybe a year and a half ago.”
“Under the old law, groceries had to be purchased from a qualified grocer to be eligible for the deduction, a phrase that predated the recent popularity of grocery deliveries,” a New Mexico Tax and Revenue Department press release said Jan. April.
In 2004 a law was passed making most food eligible for food tax deduction. However, hot ready meals, pet food, alcoholic beverages and household items are taxable.
In the previous wording, only “sales of groceries in grocery stores … may be deducted from gross income”. The new invoice changed the word “at” to “by”, which means that the goods delivered are also deductible.
“It’s deeply worrying that Walmart continues to tax food delivered despite the fact that lawmakers passed a law in March expressly banning food taxation from July 1, 2021,” said Fred Nathan of Think New Mexico, a group that first urged the representatives to change the language of the bill.
Turner said he followed Think New Mexico’s pressure on the law, which in part led him to realize the continued tax in the first place.
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A Walmart spokesman gave Sun News a statement about the tax.
“After we have received a clarification from the state on the new tax exemption law, we are working on lifting the VAT on eligible food delivered. We apologize for the confusion. “
The spokesman did not provide an exact timetable for when buyers will take this change into effect.
Walmart will work to reimburse miscalculated customers as well, the company said.
What is the policy of the state?
When Sun News contacted the Tax and Revenue Service, spokesman Charlie Moore said he couldn’t comment on specific taxpayers – in this case grocers – but that the department had “held discussions with members of the industry to make sure that they are aware of “the policy change.
Moore went on to explain that while the tax and revenue authorities can and will alert a grocer to the change in food tax deduction, the department “cannot control which deductions a taxpayer is claiming”.
“If they decide to change their returns, it’s up to them,” said Moore. “We cannot ask them to come back to this question again, namely that we cannot ask that someone make a deduction.”
The way the deduction and bill are set up may or may or may not allow the grocer to deduct, so Moore says the grocer may or may not essentially collect taxes on all groceries.
He said most grocers are taking the deduction and choosing not to levy taxes.
“It is up to each taxpayer to interpret their deductibility,” said Moore. “The gross income tax is an obligation of the company.”
Miranda Cyr, a member of the Report for America corps, can be reached at [email protected] or @mirandabcyr on Twitter. Show your support for the Report for America program at https://bit.ly/LCSNRFA.
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