Rio Rancho Profile

Quality of Life

Taxes and Cost of Living

Personal Income Tax

The New Mexico personal income tax (PIT) is based on federal adjusted gross income. The PIT rate is being phased down to 4.9 percent, effective for tax years beginning 2008. The minimum PIT rate is currently 1.7 percent and is not scheduled to change.

New Mexico imposes a tax on the net income of every resident. Residents are taxed on the net income from employment, unearned income, gambling, pensions, annuities, and income from real or personal property in this state or from businesses located in this state. Non-residents are taxed on the net income from property, employment or business in New Mexico.  New Mexico’s personal income tax "piggybacks" on the federal return, using federal adjusted gross income figure as its base.  Net income usually equals federal taxable income, although some special deductions are available.

New Mexico uses the same dollar amounts as the federal government for personal exemptions, standard deductions and itemized deductions.  The 2003 New Mexico Legislature cut the taxable capital gains by half over a period of five years. For tax year 2006, the capital gains deduction increases to the greater of 40 percent or $1,000 and for tax years beginning 2007 New Mexico’s capital gains deduction is the greater of 50 percent or $1,000.

 For more information, see NMTRD free publication Information for New Residents (FYI- 101) available for download at www.state.nm.us/tax.

Cost of Living

The RREDC participates in the American Chamber of Commerce Researchers Association (ACCRA) Cost of Living Index (COLI). The COLI is based upon a multitude of items and produces an index that can be compared against other participating cities across the United States. Participating organizations price study items during specific periods of time and according to ACCRA specifications. The U.S. COLI base is 100 and Rio Rancho’s Fourth Quarter Index for 2007 was 95.4. The following table compares COLI’s for selected cities for the same quarter:

Cost of Living Index

 

Composite

Grocery

Housing

Utility

Trans.

Health

Care

Misc.

Albuquerque

98.3

100.3

102.8

86.7

99.0

98.9

96.9

Austin

94.5

89.8

80.8

94.7

99.2

98.1

105.3

Dallas

91.2

99.0

71.5

98.6

103.4

101.6

97.4

Denver

103.4

102.9

109.3

102.4

95.4

108.5

100.8

El Paso

93.0

112.1

78.5

95.6

99.2

100.3

94.3

Houston

87.7

83.1

73.5

100.6

96.2

101.2

93.0

Reno-Sparks

107.8

104.3

113.9

86.5

111.2

109.0

109.3

Oakland

146.6

138.3

211.0

87.7

118.2

121.3

125.8

Oklahoma City

90.0

86.3

78.7

83.7

100.3

103.9

97.7

Phoenix

100.6

100.5

100.9

93.6

100.7

101.0

102.4

Rio Rancho

95.4

100.9

89.0

86.2

100.1

106.0

98.6

San Antonio

94.1

83.7

84.1

83.5

100.1

102.5

106.4

San Jose

154.2

143.8

251.5

99.0

113.1

122.7

111.3

San Francisco

168.5

139.5

275.2

87.8

123.1

123.5

135.0

Tucson

100.3

105.4

95.9

96.3

100.5

102.3

102.7

              Source: ACCRA Cost of Living Index, Fourth Quarter 2007                         

For more information, see the American Chamber of Commerce Researchers Association web site located at www.accra.org.

 

 

(Page last updated 2/13/08)