Report: Corporations' Combined Reporting Complaints Ring "Hollow"
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February 1, 2010
SANTA FE, N.M. - As legislators look for ways to solve the state's budget woes, closing a tax loophole for corporations that operate in New Mexico is one suggestion gaining popularity. A proposed tax reform called "combined reporting" would end the tax shelters that large, multi-state corporations use to avoid paying state income taxes.
The companies argue that it could lead to a loss of New Mexico jobs. However, a new report has examined 78 multi-state corporations and found that 71 of them already comply with combined reporting in at least one other state (or they are a subsidiary of a corporation that has a facility in at least one combined reporting state).
The report author is Michael Mazerov, senior fellow with the State Fiscal Project, Center on Budget and Policy Priorities.
"Claims that combined reporting would drive corporations from New Mexico or discourage them from coming to the state are hollow."
Bills to implement combined reporting have been introduced in recent years without success, and the idea has come up again this year in Senate Bill 90, by Santa Fe Sen. Peter Wirth. It is opposed by business groups, including the Albuquerque Chamber of Commerce, but is supported by a broad coalition, from children's welfare to social justice groups. Companies in the report include Boeing, Intel, Motorola, Target and Wells Fargo, among others.
Mazerov points out that combined reporting for New Mexico was recommended by the Governor's Blue Ribbon Commission in 2003 and that this is the only state west of the Rockies that does not require it.
"Why should anybody think that they're going to shun New Mexico as a place to do business if New Mexico adopts combined reporting, when they quite willingly do business in lots of other combined reporting states?"
The report is available at www.cbpp.org.