A. A tax to be known as the "corporate income tax" is imposed at the rate specified in the Corporate Income and Franchise Tax Act upon the net income of every domestic corporation and upon the net income of every foreign corporation employed or engaged in the transaction of business in, into or from this state or deriving any income from any property or employment within this state.

B. A tax to be known as the "corporate franchise tax" is imposed in the amount specified in the Corporate Income and Franchise Tax Act upon every domestic corporation and upon every foreign corporation employed or engaged in the transaction of business in, into or from this state or deriving any income from any property or employment within this state and upon every domestic or foreign corporation, whether engaged in active business or not, but having or exercising its corporate franchise in this state.

History: 1978 Comp., § 7-2A-3, enacted by Laws 1981, ch. 37, § 36; 1986, ch. 20, § 34.

Constitutionality. — The United States supreme court has held that similar state franchise tax laws do not violate the federal constitution. Southern Pac. Co. v. State Corp.Comm'n, 1937-NMSC-059, 41 N.M. 556, 72 P.2d 15.

More business interstate than intrastate. — A franchise tax upon a foreign corporation is not invalid because its interstate business exceeds its intrastate business. Southern Pac. Co. v. State Corp. Comm'n, 1937-NMSC-059, 41 N.M. 556, 72 P.2d 15.

"Property and business" in the state as used in the former section was construed by the commission to mean all property of the corporation not used exclusively in interstate business, plus the total gross receipts from intrastate business therein. It did not refer to business across state lines. Southern Pac. Co. v. State Corp. Comm'n, 1937-NMSC-059, 41 N.M. 556, 72 P.2d 15.

Constitutionality of formula applied to taxation of dividends received from foreign subsidiaries. — Taxation of dividends from foreign subsidiaries under the separate corporate entity method violates the commerce clause of the United States Constitution, and application of the Detroit formula is an insufficient remedy. Conoco, Inc. v. Taxation & Revenue Dep't, 1997-NMSC-005, 122 N.M. 736, 931 P.2d 730, cert. denied, 521 U.S. 1112, 117 S. Ct. 2497, 138 L. Ed. 2d 1003 (1997).

Law reviews. — For note, "The Entry and Regulation of Foreign Corporations Under New Mexico Law and Under the Model Business Corporation Act," see 6 Nat. Resources J. 617 (1966).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 18 Am. Jur. 2d Corporations §§ 70 to 72; 71 Am. Jur. 2d State and Local Taxation §§ 254 to 276, 285 to 288, 294 to 296, 569, 571, 572, 574, 575.

Rights in navigable waters as franchise, 36 A.L.R. 1523.

Property tax distinguished from franchise tax, 103 A.L.R. 61.

Carriers by water, tax on, 105 A.L.R. 11, 139 A.L.R. 950.

Affiliated corporation, franchise tax of corporation as affected by creation of, 117 A.L.R. 508.

Nature of tax on foreign corporation as franchise or property tax, 131 A.L.R. 927.

Doing business, business done, or the like, outside the state, for purposes of allocating income under franchise tax law, what constitutes, 167 A.L.R. 943.

Validity under export-import clause of federal constitution of state tax on corporations, 20 A.L.R.2d 152, 46 L. Ed. 2d 955.

84 C.J.S. Taxation §§ 169 to 170, 177 to 180, 227 to 230; 85 C.J.S. Taxation §§ 1694 et seq.