New Mexico lawmakers are taking another shot to overhaul the state’s alcohol taxes to address the state’s alcohol-related death rate, which has remained nearly twice the national average for most of the past 20 years.
The lawmakers look forward to overhauling New Mexico’s alcohol tax system, replacing the state’s current fixed-per-liter taxes with a 6 percent tax collected at the wholesale level.
The last time lawmakers revamped the state’s alcohol tax system was in 1993. “We had talked about a three percent tax on the sale price of alcohol, and instead, we moved to a six percent tax collected at the wholesale cost of alcohol,” Sen. Shannon Pinto, D-McKinley County, told a legislative committee this week.
Now, Pinto said lawmakers are working with the New Mexico Taxation and Revenue Department to develop the proposal.
The legislation has not yet been formally introduced, but proponents of the measure expect that alcohol taxes will be included in the agenda when the 2027 legislative session begins in January.
Under the current system, New Mexico imposes a fixed tax on every liter of beer, wine and spirits sold.
The proposed system would instead apply a percentage-based tax of 6 percent to the wholesale price, with wholesalers passing at least some of the additional cost on to retailers and ultimately consumers.
The change is expected to generate more revenue, providing the state a larger amount to address the devastating consequences of alcohol abuse. But lawmakers say the broader question is what happens to that money.
Pinto said the proposal would direct all alcohol-tax revenue toward alcohol-related services, instead of splitting the money with the state’s general fund. “Instead of half of the alcohol tax going to the general fund, we are going to increase that to 100 percent of the alcohol fund going to funding services,” Pinto said. “And the reason that’s important is because, as you saw now, the needs are really great.”
The push comes as New Mexico continues to struggle with one of the country’s worst alcohol-related death rates. Data from the Department of Health revealed that New Mexico’s total alcohol-related death rate has ranked first, second, or third in the US since 1981. The rate has remained nearly twice the national rate for almost 20 years.
Lawmakers say the proposed change could help protect services that have relied on federal money, which is now disappearing. They argue that services aimed at treating alcohol addiction, preventing alcohol-related deaths and supporting affected communities could face cuts without a new source of state revenue.
New Mexico already imposes taxes on other potentially harmful products. Cannabis is currently taxed at 14 percent, with the rate scheduled to rise by one percentage point each year through 2030.
Legislation also sets taxes on cigarettes and vaping products. Alcohol, however, remains under a system based largely on fixed taxes per liter. This structure, according to lawmakers, no longer addresses the state’s needs.
Legislators are hoping the new proposal can finally break the impasse after several failed attempts after 1993 and help curb alcohol-related deaths across the state.
