The New Mexico Legislature is considering tax reforms that would increase state income tax rates on top earners and lower economy-wide tax rates on sales and business services.

The lengthy reform proposal from Democratic legislators was schedule for discussion by a House panel on Wednesday. A fiscal analysis of the proposed changes shows a substantial increase in state government income.

Major provisions of the bill would increase the top rate on state personal income taxes from 4.9 percent to 6.5 percent and extend the collection of taxes from online retailers.

As drafted, the bill would increase the sales tax on gasoline by 10 cents a gallon to 27 cents. A tax on motor vehicle sales also would rise. And New Mexico would collect more taxes from nonprofit and government hospitals.

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