High‑stakes debate over corporate tax 'capacity' bill leaves SB151 held for the tax package

Senate Bill 151, described by sponsors as a capacity bill to reclaim state corporate tax base lost after recent federal changes, drew extensive public testimony and sharp questioning before the committee held the measure for the tax package.

Sponsor Senator Figueroa said the bill would decouple certain New Mexico corporate tax provisions from federal changes that reduced state corporate revenues by hundreds of millions of dollars; he framed the measure as restoring baseline capacity so the Legislature can decide priorities. Bruce Fort, senior counsel with the Multistate Tax Commission (speaking for himself), explained the bill provides for formulary apportionment when taxing foreign‑source corporate income and argued that states commonly choose selective conformity with federal provisions.

Public testimony split sharply. Supporters—New Mexico Voices for Children, State Revenue Alliance and the secretary of Taxation and Revenue—argued decoupling protects revenue for schools and public services and prevents large multinationals from shifting profits. Opponents including Freeport‑McMoRan, statewide business and economic development groups, and oil & gas and manufacturing trade associations said the bill would raise business taxes, reduce competitiveness, risk double taxation for companies with foreign subsidiaries and could deter investment.

Committee members probed long‑term revenue stability and competitiveness questions. Sponsors said other states have decoupled similar provisions and the bill includes measures intended to prevent taxing more than New Mexico’s fair share, but some senators expressed concern about signaling to employers and potential investment loss. The committee held SB151 for consideration as part of the tax package and referred fiscal and technical questions to Finance.