This bill amends the Corporate Income and Franchise Tax Act in New Mexico to decouple from certain federal provisions regarding corporate income tax. It modifies the definition of "base income" to include specific adjustments, such as adding deductions for expenses related to controlled foreign corporations and subtracting amounts for bonus depreciation and interest expenses. Notably, it introduces new language that specifies the apportionment rules will apply to income attributed from controlled foreign corporations, ensuring that such income is included in the net income calculation.

Additionally, the bill clarifies the apportionment of business income by including the factors of controlled foreign corporations in the calculation, which will affect how income is allocated to New Mexico. The new definitions and adjustments are set to take effect for taxable years beginning on or after January 1, 2027. This legislative change aims to align state tax regulations with evolving federal tax laws while ensuring that New Mexico's tax framework remains competitive and equitable for corporations operating within the state.

Statutes affected:
introduced version: 7-2A-2, 7-4-10