News

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Voting Matters
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An Alternative State of the Union
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Legislative Priorities
by State Rep. Peter Wirth

Escalation is Hardly the Answer
by US Rep. Ron Paul

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Legislative Priorities
by Representative Peter Wirth - District 47

Greetings and Happy New Year. With the 2007 Legislative session now underway I appreciate this opportunity to share several of the bills I plan to introduce:

Assured Water Supply: With the scarcity of water in New Mexico, new high density subdivisions should not be allowed unless the developer is able to prove that it has sufficient water rights to make the development sustainable for at least one-hundred years. This legislation will require a “certificate of assured water supply” from the state engineer before construction can begin. This certificate will be given to an applicant who can demonstrate either an existing one-hundred year water supply or an applicant who brings new water rights sufficient to satisfy the needs of the project for at least one-hundred years. The bill also requires proposed uses to be consistent with the state water plan, and any regional or local water conservation plans adopted by the county or municipality.

Combined Corporate Tax Reporting: A good corporate citizen should behave like a good citizen: be a good neighbor, participate in the community and pay taxes. Unfortunately, some of our multi-state corporate citizens are using a tax loophole in New Mexico law to gain an unfair advantage over New Mexico businesses. A multi-state company earns profits in New Mexico. When it comes time to pay taxes, the company uses a paper shell game to “expense” its New Mexico profits to out of state affiliates and move otherwise taxable New Mexico income to an affiliate located in a state without a corporate income tax.

For example, a multi-state “big box” retailer doing business in New Mexico has an affiliate in Delaware where there is no corporate tax. The Delaware corporation owns the company trademark which it then licenses to the New Mexico company for a fee. Conveniently, this fee just happens to be close to the profits the company is generating from its operation in New Mexico.

When the big box retailer in New Mexico files its corporate tax return, most or all of its profits are paid to the affiliate in Delaware for the right to use the trademark. This allows the big box company to avoid the 7.6% corporate tax New Mexico businesses are paying.

The solution is to require “combined reporting.” With this change in the law, multi-state corporations operating in New Mexico would pay corporate income tax on their profits earned in New Mexico regardless of how they do their internal bookkeeping.
Closing this loop-hole will help create a level playing field for New Mexico owned businesses.

Prescription Drug Price Disclosure: Pharmacies currently do not have to disclose the price of a prescription drug. For consumers without health insurance, it becomes very difficult, if not impossible, to shop for the lowest priced drugs. This bill will require the owner of a pharmacy to make the current retail price available by phone or electronic device.