NM's Corporate Tax Advantage
Tuesday, March 04, 2014
Winthrop Quigley | Albuquerque Journal -
Legislation enacted last year to make New Mexico’s business tax climate more competitive did lower the effective tax rate on some businesses, but when combined with credits makes state taxes the lowest in the region for manufacturers, according to a New Mexico Tax Research Institute study.
Changes in corporate income tax rates and new rules aimed at eliminating tax on income earned through sales of goods out of state lowered the effective tax rate on manufacturers 46.9 percent, from a 17.9 percent tax rate in 2011 to a 9.5 percent tax rate.
However, that lower rate was higher than the 7 percent average corporate tax rate of eight states in the region. Only Texas and Oklahoma had higher effective tax rates on manufacturers.
When New Mexico’s investment, high-wage and research-and-development tax credits are counted against other states’ credits, New Mexico’s effective tax rate on manufacturers falls to 3.3 percent, the lowest in the region and significantly below the average 6.3 percent effective tax rate in the region.
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Category: new mexico, tax rate, manufacturing