LAS CRUCES – Weeks after the new bill took effect that included delivered groceries in gross deductions from New Mexico tax revenue, two people declared taxes on their Walmart deliveries.
House Bill 98 was signed by Governor Michelle Lujan Grisham on April 5 and came into force on July 1.
William Turner, a resident of Las Cruces, noticed a tax of $ 6.50 on his Walmart order receipt of $ 96.30 on July 14. A woman from Rio Rancho found a tax on her order the same week.
âIt’s not a lot of money, but the money is money,â Turner said.
During the pandemic, New Mexicans noticed gross revenue taxes on their delivered groceries, which would normally be tax-free at grocery stores. Delivered groceries have become popular due to the COVID-19 pandemic and the desire to stay indoors as much as possible. Turner was one of those people who turned to delivered grocery options.
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âThe pandemic has of course made delivery races a lot more attractive,â Turner said. “They’ve been taxing (deliveries) since we started, which is probably maybe a year and a half ago.”
“Under the old law, groceries had to be purchased from an eligible grocer to be eligible for the deduction, wording predating the recent popularity of grocery deliveries,” a Department press release said. New Mexico Tax and Revenue April 13.
In 2004, a bill was passed making most groceries eligible for the food tax deduction. However, hot prepared foods, pet foods, alcoholic beverages, and household items are taxable.
In the previous verbiage, only “the sale of food in a retail food store … can be deducted from gross receipts”. The new bill replaced the word “to” by “by”, thus making the delivered goods also deductible.
“It is deeply troubling that Walmart continues to tax delivered groceries even though the legislature in March passed a law explicitly banning taxing groceries, effective July 1, 2021,” said Fred Nathan of Think New Mexico, a group that initially pushed representatives to make the change in the language of the bill.
Turner said he followed Think New Mexico’s push for the bill, which in part made him understand keeping the tax in the first place.
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A Walmart spokesperson made a statement to the Sun-News on the tax.
âAfter receiving clarification from the state on the new tax exemption law, we are working to remove sales tax imposition on eligible delivered food products. We apologize for the confusion.
The spokesperson did not give a specific timeline for when buyers will see this change implemented.
Walmart will also make an effort to reimburse incorrectly billed customers, the company said.
What is the state policy?
When the Sun-News contacted the tax and revenue department, spokesman Charlie Moore said he couldn’t comment on specific taxpayers – that is, grocers in this case – but the department had ” discussions with members of the industry to ensure they are aware of “currency policy.
Moore went on to explain that while the Department of Taxation and Revenue may and will notify a grocer of the change to the food tax deduction, the department “cannot control which deductions a taxpayer chooses to claim.”
“If they decide to change their statements, it will be up to them to do so,” Moore said. “We can’t ask them again, it comes back to that question, that we can’t require someone to take a deduction.”
The way the deduction and invoice are worked out, the grocer may or may not qualify for the deduction, so essentially the grocer may or may not charge tax on groceries, according to Moore.
He said most grocers take the deduction and choose not to charge tax.
âIt is up to each taxpayer to interpret their eligibility for deductions,â Moore said. âThe tax on gross receipts is an obligation of the company.
Miranda Cyr, a member of the Report for America Corps, can be contacted at [email protected] or @mirandabcyr on Twitter. Show your support for the Report for America program at https://bit.ly/LCSNRFA.