Income/Franchise:
New Mexico Taxation and Revenue Department Summarizes New Law on Flat Corporate Income Tax Rate and Subpart F Income
New Mexico Bulletin – Legislative Summary: 2024, N.M. Tax. & Rev. Dept. (4/8/24). The New Mexico Taxation and Revenue Department issued a summary of certain tax-related legislation enacted during the 2024 regular session, including newly signed omnibus tax legislation in New Mexico [see H.B. 252 (2024), and previously issued Multistate Tax Alert for more details on this new law] that:
Eliminates the lower 4.8% state corporate income tax rate applicable to income below $500,000, leaving a flat 5.9% tax rate for all income groups, effective on January 1, 2025;
Expands the state corporate income tax base to include Subpart F income effective on January 1, 2025; and
Narrows an existing “80/20 company” water’s edge filing group exclusion to only corporations organized or incorporated outside the United States or its possessions or territories that have less than 20% of their property, payroll, and sales sourced to locations within the United States.
The summary incorporates several other tax-related changes, including some impacting New Mexico’s corporate income tax, gross receipts tax, individual income tax, and tax administration. Please contact us with any questions.
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