Analysis

Synopsis:

 Senate Bill 218 (SB 218) changes taxpayers’ election to apportion and allocate income for income tax to the New Mexico Uniform Division of Income for Tax Purposes Act.

Analysis:

 Senate Bill 218 (SB 218) eliminates taxpayers’ election to apportion and allocate (business and personal) income from other states under the Multistate Tax Compact. Income is required to be allocated per the state’s Uniform Division of Income for Tax Purposes Act.  This change is necessary as New Mexico begins market-based sourcing. Corporate Income Tax liability will be levied on services and intangible property if delivered or used in the state. Current statutes allow corporations to choose how to apportion income which could lead to a loss of revenue if the corporation reports income in a tax-haven state where they are located.


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