SANTA FE, N.M. (AP) — [auth] The House has approved a proposal to remove New Mexico’s income tax from military retirement payments.
Supporters say the tax incentive will encourage military retirees to live New Mexico.
The bill passed the House on a 58-10 vote on Monday. It heads to the Senate, but time is running out in the legislative session. Lawmakers adjourn on Thursday.
The measure phases in a tax exemption for military retirees. A fourth of a veteran’s retirement pay will be tax-free starting in 2013, half is exempt in 2014, 75 percent in 2015 and no income tax will apply starting in 2016.
The exemption is estimated to cost the state about $24 million in reduced revenues in the 2016 budget year, according to the Legislative Finance Committee.