Facing a last-minute deadline, Gov. Susana Martinez vetoed a bill on March 6 that would have increased taxes on big-box retail stores. Senate Bill 9 would have slightly lowered New Mexico’ corporate income tax rate but raised the tax treatment of some multi-state corporations.
Supporters of the bill said it would stop big-box retailers from avoiding taxes by shifting income to out-of-state subsidiaries. The measure would have forced some companies to combine the income from their nationwide operations when calculating what is subject to taxation under New Mexico’s laws. Retailers with stores of more than 30,000 sq. ft. were among those targeted by the restructured tax.
Martinez described the bill as a tax increase on “an arbitrarily chosen set of retailers” that would kill jobs, pass higher prices on to consumers and drive business out of the state.
"While proponents of this legislation may have had a few particular corporate targets in mind when pushing for this tax increase, the result would be much broader and raise taxes on businesses like grocery stores," the governor said in a prepared statement. "Increasing taxes on grocery stores, clothing retailers and home improvement stores, while choosing to cut taxes for a different set of corporations -- such as large banks, casinos, payday loan companies or any other large corporation that pays corporate income tax -- is not only misguided and an arbitrary tax policy, but it's also not the way to foster economic growth in New Mexico."