I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
Report: Many NM multistate corps operate in states with combined reporting
Gov. Bill Richardson has said twice this week that he’s sensitive to how a controversial measure that would force out-of-state corporations to pay more in corporate income tax might affect companies like Intel, which has a plant in Rio Rancho.
But Intel Corp. already operates in seven states, including Colorado and Arizona, that require the company to pay more in corporate income tax through a combined reporting law, according to a newly released report.
The left-leaning Washington-based Center for Budget and Policy Priorities released the report this week.
The debate over whether New Mexico should pass a combined reporting law comes at a time when New Mexico is struggling financially, and policy makers are looking for ways to close a sizable budgetary shortfall.
As it is now, large, multi-state corporations often designate individual stores as subsidiaries that then make large payments to a home office in another state for use of, say, a logo. Those large payments funnel earned corporate income out of New Mexico that should be taxed here, according to the sponsor of the combined reporting bill, Sen. Peter Wirth, D-Santa Fe. He has carried the bill for several years because he says it’s a loophole that gives big corporations a leg up on local businesses.
Opponents, including the Greater Albuquerque Chamber of Commerce, say requiring combined reporting would send an anti-business message to corporations and industries at a time when New Mexico should be doing everything to entice businesses to relocate here or expand their operations.
The Center’s report shows that dozens of other big multi-state corporations with stores here in New Mexico operate in at least one state, if not more, that tax them more heavily than local businesses. Bank of America and H&R Block, for example, operate in all 23 states that have some version of combined reporting, the report shows.
At least 71 of the 78 multi-state corporations that have 250 or more employees in New Mexico have a facility in at least one state that mandates combined reporting, the report said.
Under combined reporting, a corporation’s nationwide profits are combined — that is, added together — and the state then taxes a share of that combined income, according to the Center.
New Mexico’s share would be calculated by an apportionment formula that weighs the corporate group’s level of activity in the state as compared to its activity in other states.