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
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
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