New Mexico food tax passes state Senate

The state Senate of New Mexico has voted to implement a food tax that applies to nearly 40 percent of foods sold in the state in order to help balance the state’s budget.

Included are taco shells, candy and soda, and perhaps most controversially, white flour tortillas, one of the most commonly consumed foods in New Mexico.

However, the tax would be exempt from foods that are listed by the Health Department as available to members of the state’s nutrition program for women, infants and children, known as the WIC program. The WIC card is available to women, infants and children with earnings at least 185 percent below the poverty line.

That includes staple foods such as meat, poultry, fish, bread, cereal, vegetables, fruits or dairy products, and any foods that are covered by the Supplemental Nutrition Assistance Program (also known as SNAP or the food stamp program) would remain tax-exempt.

Senator John Arthur Smith (D) told KRQE News: “We look at it basically as closing loopholes and encouraging nutritional diets.”

The bill, which still has to go to the House, has angered opponents who claim that it does tax foods that are considered staples in the state, including white bread, red chilies and white flour tortillas, an inclusion that has led to the bill being dubbed a ‘tortilla tax’.

According to the US Census Bureau’s 2008 Consumer Expenditure Survey statistics, about 39 percent of all foods sold in retail stores fall under the definition of food as defined in the bill.

The bill said that if it is implemented revenue from the gross receipts tax on food would be boosted from $2.97bn in fiscal year 2009, by about $138m in 2011 and $145m in 2012.

The measures are part of a $5.276bn state budget that passed the state Senate on Sunday morning, with the levy on food forming the largest part of new tax-raising measures.

Meanwhile funding to state agencies will be cut along with hundreds of state government jobs.

New Mexico is particularly susceptible to food insecurity, with 14.5 percent of the population qualifying as food insecure, meaning they are unsure where their next meal will come from, or are chronically hungry. Twenty percent of the state’s children regularly miss meals due to inadequate income, according to government figures.