New Mexico is benefiting greatly from the Tax Cuts and Jobs Act enacted by congressional Republicans and President Trump:
145,820 New Mexico households are benefiting from the TCJA’s doubling of the child tax credit.
Every income group in every New Mexico congressional district received a tax cut. Nationwide, a typical family of four received a $2,000 annual tax cut and a single parent with one child received a $1,300 annual tax cut.
712,360 New Mexico households are benefiting from the TCJA’s doubling of the standard deduction. Thanks to the tax cuts, nine out of ten households take the standard deduction which provides tax relief and simplifies the tax filing process.
25,500 New Mexico households are benefiting from the TCJA’s elimination of the Obamacare individual mandate tax. Most households hit with this tax made less than $50,000 per year.
Lower utility bills: As a direct result of the TCJA’s corporate tax rate cut, New Mexico residents are saving money on utility bills. Lower electric, water, and gas bills help households and small businesses operating on tight margins. For example, at least five New Mexico utilities reduced their customers’ bills (see below).
Thanks to the tax cuts, New Mexico businesses of all sizes are hiring, expanding, raising pay and increasing employee benefits:
Allsup’s Convenience Stores, Inc. (Headquarters in Clovis, New Mexico, with 118 store locations statewide) — $1,000 bonuses:
Workers were feeling so good at a Santa Fe Allsup’s convenience store Thursday that you might have thought it was raining cash. And it almost was.
One-time cash bonuses of $1,000 had appeared that morning by direct deposit in the bank accounts of all full-time, non-executive Allsup’s employees who have been with the company at least one full calendar year.
Cashier Cesia Villatoro, who works at the Allsup’s store at 305 N. Guadalupe St., said she was happy with the bonus. Then she amended that to “very happy.”
“I’m going to help my family,” Villatoro said.
Owners of the Clovis-based company said in a news release that the windfall was “a result of the recent Tax Cuts and Jobs Act passed in December 2017” — a massive Republican tax overhaul pushed by President Donald Trump.
“The new tax reform legislation provides tax cuts for individuals and companies and should result in positive economic growth,” Allsup’s said.
The company operates 317 stores in New Mexico, West Texas and Oklahoma and employs 3,200 full-time and part-time employees. It did not say how many of its employees received a bonus this week.
Velia Bojorquez, manager of the North Guadalupe Street store, said the company had mentioned the bonuses would be coming but didn’t give an exact date of when workers could expect them. “It’s too good to be true,” she said. “We were all surprised. Where did this money come from?”
Bojorquez said she plans to use the extra infusion of cash to pay some bills. “It’s going to be a big help.”
Cashier Maria Rosado was equally enthused. “I really need it,” she said of the cash disbursement. “I’m going to help my family and pay some bills.” – March 15, 2018 Santa Fe New Mexican
Haciendas at Grace Village (Las Cruces, New Mexico): Hiring additional employees:
Haciendas at Grace Village had planned to expand in the future but the company is moving forward now because of lower taxes according to Coppedge. The assisted living facility which has 49 employees may hire as many as 40 additional people. — Feb. 23, 2018 Albuquerque Journal article excerpt
Public Service Company of New Mexico (Albuquerque, New Mexico) – The utility will pass tax reform savings to customers:
The company will gain about $48 million from the lowering of the corporate income tax rate from 35 percent to 21 percent. It will pass those gains onto consumers starting this year as part of Public Service Co. of New Mexico’s latest rate case that concluded in December, allowing PNM to lower its newest rate hike to just 1.4 percent. – Feb. 27 2018, Albuquerque Journal article excerpt
El Paso Electric (El Paso, Texas) – The utility will pass tax reform savings to customers:
The New Mexico Public Regulation Commission (NMPRC) today approved El Paso Electric’s (EPE) filing to begin issuing a credit in bills to reflect the reduction of the federal tax rate for New Mexico customers. The federal tax credit will be reflected on customer bills beginning May 1, 2018.
EPE estimates the credit for the average residential New Mexico customer will range from $1.67 per month in the winter to $2.68 per month in the summer. The credit will appear as a line item adjustment on monthly bills.
EPE estimates that customers will see an annual reduction of approximately $4.9 million in base rates or a credit for all customers at 3.87 percent. – April 25, 2018 El Paso Electric news release
Southwest Public Service Company (Amarillo, Texas) – The utility will pass tax reform savings to customers:
Southwestern Public Service Co. reached a settlement agreement with the New Mexico Public Regulation Commission, under which the utility would see an annual revenue increase of $12.5 million.
The settlement will revise the commission’s September 2018 order, which granted the company a revenue increase of approximately $8 million, based on a return on equity of 9.1% and a 51% equity ratio.
The original order also directed the Xcel Energy Inc. subsidiary to refund customers $10.2 million related to adjustments associated with the federal Tax Cuts and Jobs Act, retroactive to Jan. 1, 2018. Southwestern Public Service, or SPS, appealed the order to the New Mexico Supreme Court.
SPS in October 2017 originally requested a $43 million increase in base rates, an ROE of 10.25% and an equity ratio of 53.97%. The utility later filed a request to reduce revenue requirements by $11 million to reflect the federal tax overhaul. – February 15, 2019 S&P Global excerpt
New Mexico Gas Company (Albuquerque, New Mexico) – The utility will pass tax reform savings to customers:
The Company is requesting an $8 million increase in annual base revenues, which correlates to approximately a 1.4% increase in an average residential customer bill.
This rate request applies the benefits of recently enacted federal tax reform to our customers and is $9.6million lower as a result of passing through the tax reform benefits. The request would have been $17.6 million before application of the tax reform benefits – New Mexico Gas Company 2018 rate case overview
Zia Natural Gas Company (Las Cruces, New Mexico) – The utility will pass tax reform savings to customers:
On January 26, 2018, ZIA tiled NMPRC Case No. 18-00018-UT, an Application for Revision of its Rates, Rules, and forms under Advice Notice No. 57 (“Application”); supporting schedules, direct testimonies and exhibits; and the Certificate of Service. In summary, ZIA is requesting a general rate increase of $2,597,203. As part of its Application, the Company incorporated the change in federal tax rate as a result of the passage of TCJA. The tax rate change impacted both the income tax expense and ADIT line items used to calculate the proposed customer rates. – March 20, 2018 New Mexico Public Regulation Commission document
Kairos Power LLC (Albuquerque, New Mexico) — The company is opening a new engineering center in an Opportunity Zone created by the Tax Cuts and Jobs Act:
Kairos Power LLC will open a new engineering center in Albuquerque to develop advanced reactor technology, city and state officials announced Friday.
Kairos Power plans to buy an existing building on 32 acres of land, invest up to $125 million and create 65 jobs over the next few years. The facility will be located in the Mesa del Sol master-planned community.
“By bringing Kairos Power to Albuquerque, we are building on our strengths as a technological research and development hub,” Albuquerque Mayor Tim Keller said in a news release. “Further, we are adding quality jobs that cover three areas: professional, technical and skilled labor with competitive and desirable salaries averaging $100,000 that will bring up our city’s average salary.”
California-based Kairos Power plans to engineer and test high-temperature salt technology at Mesa del Sol. There will not be any nuclear material on site at the Albuquerque facility, and it will not generate any spent nuclear material, city and state officials said.
The project would generate an estimated total economic impact of up to $292 million over 10 years, according to a state analysis.
The New Mexico Economic Development Department has committed $4 million from the Local Economic Development Act for the project. That includes a $1 million bonus for locating in an opportunity zone, which city and state officials said is the first use of New Mexico’s new incentive for opportunity zone development.
The City of Albuquerque Economic Development Department has committed $1 million through its LEDA fund and will serve as fiscal agent for the state funding. Kairos Power has applied for an industrial revenue bond, which local officials said will result in the company’s investment in building and land acquisition, new construction and equipment purchases by 2025. The Albuquerque City Council must approve all the incentives. — December 16, 2019 Albuquerque Business Journal article
Echo’s Brewery (Albuquerque, New Mexico) — The bar known as Burt’s Tiki Lounge is expanding and moving to an Opportunity Zone created by the Tax Cuts and Jobs Act. The new facility will be known as Echo’s, complete with a brewery, live music, and recording studio:
A popular old bar in downtown Albuquerque is being converted into a new brewery. What was originally Burt’s Tiki Lounge will now be known as Echo’s, a brewery with live music that doubles as a recording venue.
Owner Jake Ralphs said he wants future generations to see downtown the way he did.
“I would like to see the place improve,” he said. “I would like this to be something my kid could experience and have some pride in.”
The downtown corridor is constantly under development and is considered an opportunity zone for local businesses.
“I remember it as a kid coming here seeing lots of live music,” he said. “I cannot wait for this part of town to come back to its glory. I really think we can bring the right crowd down here and have fun.”
Echo’s is set to open this summer. — January 23, 2020 KOB4 Eyewitness News article
Today, Congress approved legislation representing the first comprehensive tax reform in a generation. The President is expected to sign the bill in the coming days.
Once tax reform is signed into law, AT&T* plans to invest an additional $1 billion in the United States in 2018 and pay a special $1,000 bonus to more than 200,000 AT&T U.S. employees — all union-represented, non-management and front-line managers. If the President signs the bill before Christmas, employees will receive the bonus over the holidays.
“Congress, working closely with the President, took a monumental step to bring taxes paid by U.S. businesses in line with the rest of the industrialized world,” said Randall Stephenson, AT&T chairman and CEO. “This tax reform will drive economic growth and create good-paying jobs. In fact, we will increase our U.S. investment and pay a special bonus to our U.S. employees.”
CarMax (Albuquerque, New Mexico) – $250-$1,500 bonuses depending on length of service:
The nation’s largest retailer of used cars, announced plans to provide one-time bonuses to most hourly and commissioned full-time and part-time associates as a result of the recently passed Tax Cuts and Jobs Act of 2017. Bonus amounts will vary from $200 up to $1,500 based on length of service with the company. – Feb 23. 2018, EPR Retail News article excerpt
The 2017 Tax Act benefited the Company in the fourth quarter and full year Fiscal 2018. The Company expects to continue to benefit from the 2017 Tax Act going forward, primarily due to the lower U.S. corporate income tax rate. As a result of the estimated cash benefit related to the 2017 Tax Act, the Company is taking the following actions:
- A one-time, discretionary bonus to eligible, non-bonus-plan Associates, globally
- An incremental contribution to the Company’s defined contribution retirement plans for eligible Associates in the U.S. and internationally
- Instituting paid parental leave for eligible Associates in the U.S.
- Enhancing vacation benefits for certain U.S. Associates
Made meaningful contributions to TJX’s charitable foundations around the world to further support TJX’s charitable giving – Feb. 28, 2018 The TJX Companies Inc. press release excerpt
FedEx (Multiple locations in New Mexico) – Accelerated and increased compensation; pension plan contributions:
FedEx Corporation is announcing three major programs today following the recently enacted U.S. Tax Cuts and Jobs Act:
- Over $200 million in increased compensation, about two-thirds of which will go to hourly team members by advancing 2018 annual pay increases by six months to April 1st from the normal October date. The remainder will fund increases in performance- based incentive plans for salaried personnel.
- A voluntary contribution of $1.5 billion to the FedEx pension plan to ensure it remains one of the best funded retirement programs in the country.
- Investing $1.5 billion to significantly expand the FedEx Express Indianapolis hub over the next seven years. The Memphis SuperHub will also be modernized and enlarged in a major program the details of which will be announced later this spring.
FedEx believes the Tax Cuts and Jobs Act will likely increase GDP and investment in the United States. — Jan. 26 2018, FedEx press release
Waste Management Inc. (Multiple locations in New Mexico) — $2,000 bonuses:
In light of the meaningful contributions of its employees and the new U.S. corporate tax structure, the company will distribute US $2,000 in 2018 to every North American employee not on a bonus or sales incentive plan; that includes hourly and other employees.
“We are about to get a tax benefit as our U.S. corporate tax rate goes from 35 percent to 21 percent. In considering how to best spend that, we wanted to find a way to help grow our economy, which in turn, will help grow our business, and give some of the tax savings back to those hardworking employees who do not get the opportunity to participate in our salaried incentive plans,” said Jim Fish, president and chief executive officer, Waste Management.
“So, we are offering each North American hourly full-time employee and salaried employee who does not participate in any sales incentive or bonus plan during 2018, a cash bonus of US $2,000 to show our appreciation to so many of our valued employees while growing our business and returning a good portion of the tax savings directly to the overall economy,” he continued. – Jan. 10 2018, Waste Management Inc. press release excerpt
McDonald’s (90+ locations in New Mexico) – Increased tuition investments which will provide educational program access for 400,000 U.S. employees. $2,500 per year (up from $700) for crew working 15 hours a week, $3,000 (up from $1,050) for managers, and more:
McDonald’s Corporation today announced it will allocate $150 million over five years to its global Archways to Opportunity education program. This investment will provide almost 400,000 U.S. restaurant employees with accessibility to the program as the company will also lower eligibility requirements from nine months to 90 days of employment and drop weekly shift minimums from 20 hours to 15 hours. Additionally, McDonald’s will also extend some education benefits to restaurant employees’ family members. These enhancements underscore McDonald’s and its independent franchisees’ commitment to providing jobs that fit around the lives of restaurant employees so they may pursue their education and career ambitions.
The Archways to Opportunity program provides eligible U.S. employees an opportunity to earn a high school diploma, receive upfront college tuition assistance, access free education advising services and learn English as a second language.
“Our commitment to education reinforces our ongoing support of the people who play a crucial role in our journey to build a better McDonald’s,” said Steve Easterbrook, McDonald’s President and CEO. “By offering restaurant employees more opportunities to further their education and pursue their career aspirations, we are helping them find their full potential, whether that’s at McDonald’s or elsewhere.”
Accelerated by changes in the U.S. tax law, McDonald’s increased investment in the Archways to Opportunity Program includes:
- Increased Tuition Investment:
- Crew: Eligible crew will have access to $2,500/year, up from $700/year.
- Managers: Eligible Managers will have access to $3,000/year, up from $1,050.
- Participants have a choice for how they apply this funding – whether it be to a community college, four year university or trade school. There is no lifetime cap on tuition assistance – restaurant employees will be able to pursue their education and career passions at their own pace. The new tuition assistance is effective May 1, 2018 and retroactive to January 1, 2018.
- Lowered Eligibility Requirements: Increase access to the program by lowering eligibility requirements from nine months to 90 days of employment. In addition, dropping from 20 hours minimum to 15 hours minimum (roughly two full time shifts) per week to enable restaurant employees more time to focus on studies.
- Extended Services to Families: Extension of Career Online High School and College Advisory services to restaurant employees’ family members through existing educational partners Cengage and Council for Adult and Experiential Learning (CAEL).
- Additional Resources: Career exploration resources for eligible restaurant employees to be available later this year.
- Creation of an International Education Fund: Grants to provide local initiatives and incentives in global markets to further education advancement programs.
“Since its inception, Archways to Opportunity was meant to match the ambition and drive of restaurant crew with the means and network to help them find success on their own terms,” said David Fairhurst, McDonald’s Chief People Officer. “By tripling tuition assistance, adding education benefits for family members and lowering eligibility requirements to the equivalent of a summer job, we are sending a signal that if you come work at your local McDonald’s, we’ll invest in your future.”
After launching in the U.S. in 2015, Archways to Opportunity has increased access to education for over 24,000 people and awarded over $21 million in high school and college tuition assistance. Graduates have received college degrees in Business Administration, Human Resources, Communications, Accounting, Microbiology and more. – March 29, 2018 McDonald’s Corporation press release excerpt