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Leveling the Playing Field

Leveling the Playing Field

The loophole-closing corporate tax bill Sen. Peter Wirth has been

sponsoring for eight years has cleared both New Mexico legislative

bodies for the first time. The state House of Representatives voted

for passage by a narrow 36-33 margin just before midnight Wednesday

night.

Senate Bill 9 lowers the corporate income tax rate in New Mexico from

7.6 to 7.5 percent, while requiring large retailers (with stores over

30,000 square feet) file combined income tax returns. Multi-state

companies do not presently need to file combined returns, so they can

export their profits earned in this state to a state that doesn’t have

a corporate income tax, like Arizona.

Rep. Brian Egolf (D-Santa Fe) argued for the bill on the house floor.

He said current law allows Best Buy to sell a television set for 7.6

percent less than a New Mexico company like Baillo’s, because local

businesses can’t export their profits the way nation-wide corporations

can.

Egolf, Wirth and other lawmakers have argued this is “a matter of

fairness” in the tax code, “leveling the playing field” between local

retailers and their giant competitors across the street.

As originally proposed, SB9 would have applied to all corporations

operating in New Mexico. The bill was amended in committee to only

count toward large retailers. Egolf called it “a first step,” and said

lawmakers may revisit the issue in the future. Oil and gas companies

and manufacturers like Intel are not effected by this amended bill.

Gov. Susana Martinez has told numerous reporting outlets she will not

sign the bill into law, because she believes it will hurt business in

New Mexico.

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