Legislators call corporate tax cut good first step

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Sen. Stuart Ingle says legislation passed to attract and retain businesses to New Mexico may not fix all of the state's problems but it's a step in the right direction.

Ingle, R-Portales, hopes that lowering the corporate tax rate from 7.6 percent to 5.9 percent will help New Mexico compete with neighboring states to draw corporations.

"Other states have lower corporate tax rates so we're trying to be competitive," Ingle said. "It certainly will be a great benefit to our local corporate businesses. Depending on how much the economy is affected, we may continue to lower it down to the range of 4 percent."

Rep. Anna Crook, R-Clovis, believes lowering the tax rate for Clovis and Portales may draw businesses to the area that were hesitant before.

"You don't see overnight improvement, but when people are looking to locate a business, it's certainly attractive," Crook said.

Crook believes things can only get better now that this has passed, an action she says the Legislature took that will retain jobs in the state.

"This gives us a fair shake, greater employment and helps keep our students and children here when looking for jobs," Crook said. "People are still unsure about the economy, but lowering the tax will also help our existing businesses grow."

Crook used Intel as an example of a business that relocated because of a lower tax rate in another state.

"Intel is one of our big corporate industries in the state and due to a better tax incentive, they located a portion of their business to Arizona," said Crook, adding had they kept it here, it would have employed thousands.

Another piece of legislation that individualized the amount of unemployment tax employers pay leaves Ingle confident that if it works, they won't have to touch unemployment taxes again.

"It's a great benefit to business in New Mexico," Ingle said. "We individualize a business depending on how many people are let go. Their rates will be higher than businesses who keep steady employment."

Ingle says this will benefit small businesses, including ones in Roosevelt and Curry counties, because smaller businesses are usually at their minimal workforce.

"It should work better and be more fair. It's a new type of program," Ingle said. "The businesses that turnover the most employees have to pay more. It will be effective January 2015."

The legislation still needs the approval of Gov. Susana Martinez to become law.