New Mexico Instructions for Form S-CORP Sub-Chapter S Corporate Income and Franchise Tax Return

Instructions for Form S-CORP Sub-Chapter S Corporate Income and Franchise Tax Return
Form S-Corp INS (Obsolete)
2017 New Mexico

Instructions for Form S-CORP
Sub-Chapter S Corporate Income and Franchise Tax Return
Due Dates

Sub-chapter S corporate income and franchise tax is due on or before the due date of the corporation's federal corporate
income tax return for the taxable year. If you e-file and e-pay, the filing deadline is March 31, 2018, or on or before the
last day of the third month following the end of the tax year. The extended due date also applies to Form RPD-41367.

Privacy Notification and Confidentiality

The New Mexico Taxation and Revenue Department requires
each taxpayer to furnish a federal employer identification
number (FEIN) for taxpayer identification. The Department
protects all information supplied electronically by taxpayers
using encryption and fire walls. Taxpayer information on returns
is protected in accordance with the confidentiality provisions of
the Tax Administration Act, Section 7-1-8 NMSA 1978.

Contact Information

You can contact the Department by mail, email, or phone.
New Mexico Taxation and Revenue Department
Corporate Income and Franchise Tax
P. O. Box 25127
Santa Fe, NM 87504-5127

IMPORTANT: If a taxpayer furnishes a truncated FEIN, the
return is incomplete and the Department sends it back to the
taxpayer to refile.

[email protected]
(505) 827-0825 in Santa Fe or toll free (866) 809-2335

Forms Covered in These Instructions

2017 Legislative Summary

	S-Corp,

	

Sub-Chapter S Corporate Income and 		
Franchise Tax Return

♦♦ S-Corp-1, Income Taxable to Owners
♦♦ S-Corp-A, New Mexico Apportionment Factors 		
		 Schedule

For a summary, go to www.tax.newmexico.gov, click FORMS &
PUBLICATIONS, then click Publications followed by Bulletins,
and then 100 Series-General Information.

♦♦ S-Corp-B, Allocated Non-business Income Taxable 	
		 to Owners

FYI-106

♦♦ S-Corp-C, Allocated and Apportioned Income Taxed 	
		 to S Corporations
	S-Corp-CR,

Tax Credit Schedule

	S-Corp-EXT,

Extension Payment Voucher

	S-Corp-PV,

Tax Payment Voucher

	S-Corp-ES,

Estimated Tax Payment Voucher

You can use Taxpayer Access Point (TAP) or third-party software
through Federal/State filing to e-file tax returns.

Pass-Through Entity Withholding Detail 		
(PTW-D) Report

	PTW-PV,

	

	

	

Publication FYI-106, Claiming Tax Credits for CRS Taxes and
Business-Related Income, provides information about the various
non-refundable and refundable tax credits to claim on S-Corp-CR.
Click www.tax.newmexico.gov/forms-publications.aspx, then
Publications, FYIs, and 100 Series-General Information.

E-File and E-Pay Services

	RPD-41367,

	

For information about New Mexico tax law changes enacted
during 2017, see 2017-B-100.29, Legislative Summary. A
summary is available each year to describe new legislation
passed during the year that affects the Department.

Pass-Through Entity Withholding Detail 		
(PTW-D) Report Tax Payment Voucher
PTW-EXT, Pass-Through Entity Withholding Detail 		
(PTW-D) Report Extension Payment Voucher

Using TAP

E-file the 2017 S-Corp, New Mexico Sub-Chapter S Corporate
Income and Franchise Tax Return, and make payments using
TAP by following these steps:

1.	 Click https://tap.state.nm.us.
2.	 Add access to an S-Corp account by following the steps in
the Adding Access to Accounts video.

Using Federal/State Filing

FYI-350

Publication FYI-350, Corporate Income Tax and Corporate
Franchise Tax, details various aspects of the New Mexico
corporate income and franchise tax program. For a copy,
click www.tax.newmexico.gov/forms-publications.aspx,
then click Publications, FYIs, and 300 Series-Income
Taxes.
S-Corp							

E-file the following business income tax returns through the
Federal/State filing program using third-party software:
 Corporate Income and Franchise Tax
 Sub-Chapter S Corporate Income and Franchise Tax
 Pass-Through Entity Information Report
 Form RPD-41367, Pass-Through Entity Withholding 		
	 Detail (PTW-D) Report

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Contact Our Local Offices

Local tax and revenue offices can provide full service and information about New Mexico's taxes, programs, and forms
and specific information about your filing situation. If you have questions or require additional information, contact your
local Taxation and Revenue Department Office.

Albuquerque

Farmington

Roswell

Santa Fe

Taxation & Revenue Department
Bank of the West Building
5301 Central Ave., NE
P.O. Box 8485
Albuquerque, NM 87198-8485
(505) 841-6200

Taxation & Revenue Department
400 North Pennsylvania, Suite 200
P.O. Box 1557
Roswell, NM 88202-1557
(575) 624-6065

Taxation & Revenue Department
3501 E. Main Street, Suite N
P.O. Box 479
Farmington, NM 87499-0479
(505) 325-5049

Las Cruces

Taxation & Revenue Department
2540 S. El Paseo, Building #2
P.O. Box 607
Las Cruces, NM 88004-0607
(575) 524-6225

Taxation & Revenue Department
1200 South St. Francis Drive
P.O. Box 5374
Santa Fe, NM 87502-5374
(505) 827-0951 or (866) 285-2996 toll free
(505) 827-0825 for S-Corp help

Use Our Online Services

http://www.tax.newmexico.gov/Online-Services/default.aspx

	 Ask a question.
	

For questions about state tax policies, legislation, regulations, and rulings, email [email protected].
For questions about the S-Corp return, email [email protected].

	 E-file and e-pay taxes with TAP using a credit card or an electronic check.
	

Taxpayer Access Point (TAP), our secure resource at https://tap.state.nm.us, lets you e-file certain returns* and e-pay
taxes.

	

Use Visa, MasterCard, Discover, or American Express credit cards. A 2.40% convenience fee calculated on the
amount of the transaction covers costs companies bill us when you use the card. Or e-pay by electronic check at no
charge. An electronic check authorizes us to debit the checking account in the amount and on the date you specify.

	

* For a list of tax programs TAP handles, on the TAP page under WITHOUT LOGGING ON, click Make a Payment, and
then click Business. The drop-down box in Account Type shows all tax programs and other selections available in TAP.

	 Check the status of an account and more with TAP.
	

With TAP you can also check the status of tax accounts, register a business, change an address, and manage tax
account history.

	 Save time with a directly deposited refund.
	

To request direct deposit of a refund, fill in the Refund Express section at the bottom of the S-Corp return.

	 Download forms and publications.
	

For the latest and prior year forms and publications, go to www.tax.newmexico.gov/forms-publications.aspx.

S-Corp							

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Contents
General Instructions....................................................................................................................... 4
Who is Required to File S-Corp Return ................................................................................................................4
Who is Required to Pay Franchise Tax.................................................................................................................4
Which Return to File..............................................................................................................................................4
Assembling the Return..........................................................................................................................................4
Other Documents That May Be Required.............................................................................................................5
Amended Returns.................................................................................................................................................6
Payment Guidelines and Information....................................................................................................................6
Interest and Penalties............................................................................................................................................7
After You File the Return.......................................................................................................................................8

Line Instructions to Complete the S-Corp Return and Schedules........................... 9
S-Corp...................................................................................................................................................................9
S-Corp-1..............................................................................................................................................................13
S-Corp-A: New Mexico Apportionment Factors...................................................................................................14
S-Corp-B: Allocated Non-Business Income Taxable to Owners..........................................................................19
S-Corp-C: Allocated and Apportioned Income Taxed to S Corporations.............................................................20

Completing Vouchers and Payments........................................................................ 21
S-Corp-PV...........................................................................................................................................................21
S-Corp-ES...........................................................................................................................................................21
S-Corp-EXT.........................................................................................................................................................22

New Mexico Taxpayer Bill of Rights.......................................................................... 23

.Basic Guidelines

Due Dates

 Round up to the next dollar.
 References to federal form line numbers correspond to		

The due dates of the S-Corp return for the taxable year
conform to the due dates instituted at the federal level. The
due date for calendar-year filers is March 15, 2018.

 Use approved, high-quality original state forms and 		

Timely Returns

	
	
	

the most recent federal forms available. If they're 		
incorrect, use the line numbers from the actual form.
vouchers. TRD only accepts prescribed forms.

 Separately pay tax due and estimated taxes.
 Do not staple or tape the return or any attachments.
 Keep copies of the return and all attachments.

S-Corp							

An S-Corp return and payment are timely if the USPS
postmark on the envelope bears a date on or before the due
date. If the due date falls on a Saturday, Sunday, or a state or
national legal holiday, the return is timely if the postmark bears
the date of the next business day. Delivery through a private
delivery service is timely if the date recorded or marked by the
private delivery service is on or before the due date.

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General Instructions
Who is Required to File S-Corp Return
Corporations and limited liability companies (LLCs) that
elect to be taxed as S corporations for federal income tax
purposes must file a New Mexico S Corporate Income
and Franchise Tax Return if any of the following is true
about the entity. The entity is:
●● Registered to do business in New Mexico
●● Transacts business in, into, or from New Mexico
●● Derives any income from property or employment
within New Mexico

Exceptions
The following entities are exempt and not required to file
an SCorp return:
●● Insurance companies and reciprocal or interinsurance
exchanges that pay a premium tax to New Mexico
●● Rural electric cooperatives established under the Rural
Electric Cooperative Act, Section 62-15-28 NMSA 1978

Who is Required to Pay Franchise Tax

All S corporations engaging in business in New Mexico
and every domestic or foreign corporation having or
exercising its corporate franchise in this state, whether
actively engaged in business or not, must file a S-Corp
return and pay the $50 franchise tax, even if no income
tax is due. This includes the following:
●● Disregarded corporations doing business in New
Mexico
●● Limited liability companies that are required or elect to
file as a corporation for federal income tax purposes
and exercise its franchise in New Mexico
●● Entities with no nexus in New Mexico pursuant to P.L.
86-272 (not immune from paying franchise tax)

●● Insurance companies and reciprocal or interinsurance
exchanges that pay a premium tax to New Mexico
●● Rural electric cooperatives established under the Rural
Electric Cooperative Act

Which Return to File

Fiscal-year and short-year filers use the S-Corp return for
the tax year when the fiscal year or short year begins.
For example, if the tax year begins June 30, 2017, use
the 2017 S-Corp return, even though the ending date of
the tax year is 2018.
In general, the federal return you are required to or elect
to file determines the New Mexico income tax return you
file, as shown in the next table.
NOTE: The Department may require an entity that files
an S-Corp return to file RPD-41367, Pass-Through Entity
Withholding Detail (PTW-D) Report.
When to File Other Returns
If the business does not file a New Mexico S-Corp return,
New Mexico may require you to file one of the following
returns for New Mexico instead:

•	 CIT-1, New Mexico Corporate Income and Franchise
Tax Return

•	 PTE, New Mexico Information Return for Pass-Through
Entities

•	 PIT-1, New Mexico Personal Income Tax Return
•	 FID-1, New Mexico Fiduciary Income Tax Return
NOTE: Entities that file a 2017 S-Corp do not also file a
2017 PTE.

Assembling the Return

Exceptions
The only exceptions are the following:

For faster processing, please submit forms in the following
top to bottom order:
●● S-Corp
●● S-Corp-1

●● Corporations exempt from federal income tax under
the IRC that have no unrelated business income

If you file federal form

You must file New Mexico form

1065

U.S. Return of Partnership Income

PTE

Information Return for Pass-Through Entities

U.S. Corporation Income Tax Return

CIT-1

Corporate Income and Franchise Tax Return

	

1120	

1120-REIT U.S. Income Tax Return for Real Estate Investerment Trusts

S-Corp Sub-Chapter S Corporate Income and Franchise Tax Return

1120S 	

U.S. Income Tax Return for an S Corporation

S-Corp Sub-Chapter S Corporate Income and Franchise Tax Return

1040 	

U.S. Individual Income Tax Return

PIT-1

Personal Income Tax Return

U.S. Income Tax Return for Estates and Trusts

FID-1

Fiduciary Income Tax Return

1041

	

S-Corp							

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General Instructions
●● For all multistate filers:	
♦♦ S-Corp-A
♦♦ S-Corp-B
♦♦ S-Corp-C
♦♦ S-Corp-CR, tax credits and required attachments

●● RPD-41359, Annual Statement of Pass-Through
Entity Withholding
●● Form 1099-MISC or equivalent

●● Federal Form 1120, pages 1 through 5 only *
●● Any other required forms and attachments (see Other
Forms to File)
* Corporations filing under separate corporate entity or
combined filing methods must attach a pro forma federal
Form 1120, pages 1 through 5.
NOTE: If you include with the S-Corp return a pro forma
federal return, write pro forma across the top of the
federal return. If you include a copy of a state form as
backup for an amended return, write Do Not Process
across the top of the return.

Fully completed means a return that complies with all
the instructions for the return and contains all attachments
required by those instructions.

Other Documents That May Be Required
RPD-41096, Extension of Time to File
If a copy of the automatic or approved federal extension
form accompanies the S-Corp return when you file, the
Department accepts the extended time the IRS granted
and you do not need to file a New Mexico extension.

RPD-41287, 2017 Calculation of Penalty and Interest
on Underpayment of Estimated Tax
If the corporation has seasonal or annualized income and
wants to reduce penalty and interest on underpayment
of estimated tax, complete and file RPD-41287, 2017
Calculation of Penalty and Interest on Underpayment of
Estimated Tax.
RPD-41227, Renewable Energy Production Tax Credit
Claim Form
To claim the renewable energy production tax credit,
attach RPD-41227 to the return. Report the amount you
claimed on Schedule S-Corp-CR.

IMPORTANT: If any required forms or attachments are
missing, the New Mexico return is not complete and the
Department cannot process it.

This section describes the other forms and statements
that may be required.

IMPORTANT: To receive proper credit for withholding, you
must attach all annual statements to the S-Corp return. A
Schedule K-1 or its equivalent is not sufficient evidence of
New Mexico income tax withheld.

RPD-41228, Film-Related Tax Credit Claim Form
To claim an approved film-related tax credit, attach
RPD-41228 to the return. Report the amount you claimed
on Schedule S-Corp-CR.
Schedule S-Corp-CR, New Mexico Tax Credit Schedule
To claim any non-refundable or refundable credits,
complete and file Schedule S-Corp-CR with any required
backup documents. For information about credits, see
FYI-106, Claiming Tax Credits for CRS Taxes and
Business-Related Income. To find FYI-106, click
www.tax.newmexico.gov/forms-publications.aspx, then
click Publications, FYIs, and 100 Series-General
Information.

If the corporation has not received a federal extension
and needs an extension of time to file its S-Corp
return, or if the corporation needs additional time to file
the S-Corp beyond the federal extension date, request
an extension from the Department. New Mexico
requires the request by letter or by filing RPD-41096,
Extension of Time to File, on or before the due date of
the return.

RPD-41367, Pass-Through Entity Withholding Detail
(PTW-D) Report
If you are a personal services business required to
withhold on payments for certain services, file RPD-41367.

Annual Withholding Statements
If you report amounts withheld on S-Corp, lines 12 or
13, include a copy of all annual information returns and
withholding statements issued to the entity that show
income and New Mexico income tax withheld. These are
annual information returns and statements:
●● RPD-41285, Annual Statement of Withholding of Oil
and Gas Proceeds

IMPORTANT: Entities that file an S-Corp return do
not also file PTE, New Mexico Information Return for
Pass-Through Entities.

S-Corp							

A personal services business is a business
organization that receives payments for the services of a
performing artist for purposes of the film production tax
credit.

On RPD-41367 (now called PTW-D), a pass-through entity
(PTE) subject to withholding tax from its non-resident
owner's, partner's, member's, or beneficiary's (owner's)
net income according to the Oil and Gas Proceeds and
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General Instructions
Pass-Through Entity Withholding Tax Act (Sections 7-3A-1
through 7-3A-9 NMSA 1978) must annually report each
owner’s share of net income allocable to New Mexico and
remit the New Mexico tax withheld for each owner. Even if
no tax was withheld, the Department requires these PTEs
to file RPD-41367.
Pass-through entity means a personal services business
or any other business association other than any one of
the following:
●● A sole proprietorship
●● An estate or trust that does not distribute income to
beneficiaries
●● A corporation, limited liability company, partnership,
or other entity not a sole proprietorship taxed as a
corporation for federal income tax purposes for the tax
year
●● A partnership that is organized as an investment
partnership in which the partner’s income is derived
solely from interest, dividends, and sales of securities

●● A publicly traded partnership as defined in Section 7704(b)

of the Internal Revenue Code

NOTE: Except for a PTE that is a personal services
business, if the PTE entered into an agreement with the
owner for the owner to file and pay tax due on the owner’s
share of allocable net income of the PTE, the PTE must
mark 2 in the PTW-D Reason Code box in Supplemental
Page, column 5.
To amend an S-Corp return, follow these steps:
1.	 Use the S-Corp return for the year amended.
2.	 In the upper right under CHECK ONE, mark box 4b to
show this is an amended return.
NOTE: if you filed a PTE return in a year prior to tax
year 2011, use the PTE return for that year to amend
the return.
3.	 Attach all schedules previously filed with the original
return.
4.	 If you want the Department to compute penalty and
interest, leave S-Corp, lines 17 and 18 blank.
5.	 If additional tax is due, include payment for the full
amount and, unless you left lines 17 and 18 blank in
step 4, include interest calculated from the date the
original return was due and any applicable penalty.

S-Corp							

NOTE: Do not attach a copy of the originally filed
S-Corp return as backup for the amended return.
Revenue Agent Report Requirements
Report changes resulting from an IRS audit and their
Revenue Agent’s Report (RAR) within 180 days of the
date federal adjustments are final. Attach a copy of
the RAR including spreadsheets that detail the federal
adjustments by company name.

Payment Guidelines and Information

Taxpayer Access Point (TAP), our secure resource at
https://tap.state.nm.us, lets you e-file and e-pay the taxes.
NOTE: For more information about TAP, see pages 2 and
3 of these instructions.

●● A single member limited liability company that is treated
as a disregarded entity for federal income tax purposes

Amended Returns

6.	 If the New Mexico amended return reports changes as
the result of filing an amended federal return, attach
copies of the applicable federal forms and schedules.
In all other cases, attach an explanation of the
changes.

When to Use a Payment Voucher
Use a payment voucher when you send a payment by
mail. In the envelope, please include a check or money
order with the payment voucher.
Vouchers that Work in Our System
To make sure the Department can properly process the
payment voucher, follow these rules:
●● Use the original voucher, not a photocopy.
●● Cut on the dotted line for correct sizing.
●● If the voucher has a scanline, do not write on or near
it.
NOTE: For details about completing S-Corp-PV,
S-Corp-ES, and S-Corp-EXT vouchers, see Completing
Vouchers And Payments near the end of these
instructions.
Paying Taxes
You can use the following to make the payments:
●● Check or money order
●● Electronic check
●● Credit card
When you provide a check as payment, you authorize the
Department to use information from the check to make a
one-time electronic fund transfer from the account. When
we use information from the check to make an electronic
fund transfer, funds may be withdrawn from the account
as soon as the same day you make the payment.

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General Instructions
Corporations Required to Make Estimated Payments
A corporation is required to pay estimated S-Corp income
tax payments if all the following are true:
●● The corporation is subject to corporate income tax.
●● Its tax after applicable credits is $5,000 or more in the
current tax year.
When to Make an Extension Payment
Make an extension payment when you receive either a
federal automatic extension or a New Mexico extension.
An extension payment towards the tax liability avoids
accrual of interest.

NOTE: For more information about estimated tax
calculations, in the Completing Vouchers and
Payments section near the end of these instructions,
go to S-Corp-ES and see Calculating a Quarterly
Estimated Payment.
When Penalty and Interest Stop Accruing
After the principal tax liability is paid, penalty and interest
stop accruing.

IMPORTANT: An extension of time to file the S-Corp
return does not extend the time to pay. If tax is due,
interest continues to accrue. See the next section for
details.
What Makes a Payment On Time
Tax payments are timely if the envelope's postmark
bears a date on or before the due date. If the due date
is on a Saturday or a Sunday, or on a state or national
legal holiday, the payment is timely if the postmark bears
the date of the next business day. Delivery through a
private delivery service is timely if the date recorded or
marked by the service is on or before the due date.

Interest and Penalties

This section gives you general instructions and
information about interest and penalties.
Interest on Taxes Underpaid or Not Paid and IRC Rates

Interest accrues on tax, including estimated tax,
underpaid or not paid on or before the due date of the
S-Corp return, even if you receive an extension of time to
file. Interest is a charge for the use of money and by law
cannot be waived.

Interest is calculated on a daily basis at the rate
established for individual income tax purposes by
the IRC. The IRC rate, which changes quarterly, is
announced by the IRS in the last month of the previous
quarter. The annual rate for the last two years was 4%.
The annual and daily interest rates for each quarter are
posted on our website at www.tax.newmexico.gov. Under
ABOUT US, click the magnifying glass and search for
penalty & interest rates.
Negligence Penalty for Late Filing or Late Payment
The Department imposes a penalty when a return is not
filed or paid timely. The penalty is 2% of the tax due for
each month, or partial month, from the date the return was
due, not to exceed 20% of tax due. The penalty does not
apply if the entity has an extension of time to file and the
tax is paid by the extended due date.
S-Corp							

Underpayment Penalty and Interest for Estimated Tax
The penalty is 2% of the tax due for each month, or
partial month, from the date the return was due. Interest
is calculated on a daily basis at the rate established for
individual income tax purposes by the IRC.

Penalty on a Check Not Paid
A check not paid by the financial institution on which it
is drawn does not constitute payment. The Department
assesses the corporation a minimum penalty of $20 in
addition to other applicable penalties and interest.
A Refund and Possible Interest on the Refund
If the return shows an overpayment and you requested
a refund of all or part of the overpayment, please allow
at least 12 weeks for processing before contacting the
Department. Processing time varies according to when
you file the return.
You may be entitled to interest on an overpayment under
certain conditions. The interest rate is the same charged
for underpayments.
The Department shall pay no interest in any of these
situations:
●● If the interest is less than $1.00
●● If the refund is approved within 55 days of the date of
the claim for refund for current tax year
●● If the refund is approved within 120 days of the date of
the claim for refund for prior tax years
●● If the Department cannot process the S-Corp return
due to missing information
●● If the interest is for a refund of any credits claimed
for the Investment Credit Act, Laboratory Partnership
with Small Business Tax Credit Act, Technology Jobs
and Research and Development Tax Credit Act, Film
Production Tax Credit Act, Affordable Housing Tax
Credit Act, Rural Job Tax Credit, or High wage Job Tax
Credit.
To process an S-Corp return, the return must be fully
completed. This means the return complies with all
instructions for the return and contains all attachments
required by those instructions. The Department pays any
refund interest due when a return is complete.

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General Instructions
NOTE: For a list of required forms, see Assembling The
Return earlier in these instructions.

agreements, exchanges information with the IRS, other
state agencies, and taxing authorities in other states.

Collection of Debts from a Refund
If the entity owes other taxes to the Department, we keep
all or part of an overpayment. The Department applies the
amount due to the liability and notifies you.

Occasionally, computation errors in a tax return delay
processing or result in adjustments to a refund or the
amount you owe. If the Department adjusts the tax return
or issues an assessment of additional tax, the Department
provides you a description of your rights as a taxpayer.

If the entity owes amounts due under the Unemployment
Compensation Law or the Workers' Compensation
Administration Act, the law also requires the Department
to transfer all or part of an overpayment to those
accounts. The Department refunds any amount over the
liability and debt.

After You File the Return

The return may be subject to further review, verification,
or correction any time after you file the return. New
Mexico, pursuant to reciprocal information exchange

S-Corp							

If you disagree with any adjustment the Department
makes, follow the procedures in Publication FYI-406,
Your Rights Under the Tax Law. FYI-406 describes how
to dispute the Department's adjustment or assessment
through either the claim-for-refund procedure or the
protest procedure.
You can get a copy of Publication FYI-406 at
www.tax.newmexico.gov/forms-publications.aspx. Then click
Publications, FYIs, and 400 Series-Tax Administration.

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Line Instructions to Complete the S-CORP Returns and Schedules
S-Corp

purposes. If you do not know the NAICS code, see the
instructions for federal returns at https://www.irs.gov.

Line 1a through Line 6c and Line A through F
Type or print the entity's information at the top of the
S-Corp return as described here. Then complete all
information in lines A through F, and mark all relevant
boxes.

Line 6a and 6b. Fiscal year or short-year filers enter tax
year start and end dates (the dates the entities' books
open and close for the tax year) from their federal returns.

Line 1a. Entity's registered name.

Line 6c. If the due date was extended, enter the date and
include a copy of the extension with the S-Corp return.

Line 2a. Number and street name of the entity's mailing
address.

Line A. The state where the entity was organized.

Line 3a. City, state, and postal or ZIP code of the entity's
mailing address. Verify that the entire mailing address is
correct.

Line B. Date the entity was organized.

Line 3b. If the entity's address is a foreign address, enter
the country's full name. Follow the country's practice to
enter the foreign province and/or state.

Line D. If the New Mexico business was terminated in
New Mexico, enter that date.

Line C. Date business began in New Mexico.

Box 4a. If this is an original return, mark box 4a.
Box 4b. If this is an amended return, mark box 4b.
NOTE: For more information about amended returns, see
Amended Returns in the General Instructions section.
Line 5a. The entity's FEIN is required.
IMPORTANT: The Department cannot process a return
without the FEIN. Failure to provide the FEIN results in
processing delays and may cause rejection of the return.
Line 5b. New Mexico 11-digit CRS identification number.
The entity uses this number to report and pay state
and local option gross receipts tax and New Mexico
withholding and compensating tax under the Combined
Reporting System (CRS). If the entity has no gross
receipts, withholding, or compensating tax reporting
requirements, leave blank.

Line E. Enter the name of the entity's registered agent
and the agent's address, including street address, city,
state, and ZIP code.
Line F box. Mark this box if the New Mexico activities
were immune from New Mexico corporate income tax
under P.L. 86-272 (the entity had no nexus) for the 2017
tax year. You must also complete and include S-Corp-A
with the S-Corp return.

Line and Other Entries on S-Corp

Follow these instructions to complete lines 1 through 22
on the S-Corp return, and the signature and preparer
information at the bottom of the page.
Lines 1 through 4 are for S corporations with income
subject to federal tax. S corporations use these lines to
calculate New Mexico tax.

NOTE: If not applicable, a CRS number is not required.

Line 1. Income taxable to corporation. From S-Corp-C,
line 4, column 1, enter the total allocated and apportioned
income taxed to the corporation.

Line 5c. The entity's 5- or 6-digit NAICS code. This is the
North America Industry Classification System business
activity code reported for New Mexico and federal filing

Line 2. Tax on amount on line 1. This entry = line 9
amount x tax rate (see tax rate table).

Line 2.

Corporate Income Tax Rates
For tax years beginning 1/1/2017, but prior to 1/1/2018.

Net Taxable Income

Tax

Not over $500,000............................................

4.8% of net taxable income

Over $500,000.................................................
	

$24,000 plus 6.2% of the
excess over $500,000

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S-Corp
Line 3. New Mexico percentage. If on S-Corp-C, line 5
you show the percentage of New Mexico allocated and
apportioned income, enter the percentage. Otherwise,
enter 100%.

●● Has or exercises its corporate franchise in New
Mexico, whether engaged in active business or not
●● Is an otherwise tax-exempt corporation with unrelated
business income

Line 4. New Mexico income tax. This entry = line 2 x the
percentage on line 3.

IMPORTANT: It is your responsibility to comply with
all additional filing requirements imposed by the New
Mexico Secretary of State, Corporations Bureau. For
information call (505) 827-4511 in Santa Fe or toll free
(800) 477-3632, email [email protected], or visit
http://www.sos.state.nm.us. Click Corporations and then
select items under Domestic or Foreign.

Line 5. Total tax credits applied against the income
tax liability on line 4. If you are claiming any tax credits
to apply to the income tax liability, complete Schedule
S-Corp-CR. Then enter the amount on S-Corp-CR, line A,
the total of the credits to apply to the tax liability due.
About Tax Credits and Backup Documents
●● The sum of credits claimed on S-Corp-CR may not
exceed the income tax claimed on S-Corp, line 4.
●● To calculate the amount an entity may claim for any
tax year, follow the directions on the tax credit claim
form or in the tax credit instructions.
●● For the Department to consider a credit claim, you
must include with the S-Corp return the required
documents for each tax credit, along with applicable
forms, statements, or other required backup.
To see which backup documents are required to claim
a tax credit, use the S-Corp-CR Instructions available at
www.tax.newmexico.gov/forms-publications.aspx. Click
Income Taxes, Subchapter S Corporate Income Tax
Return Forms, and then S-Corp-CR Instructions.
NOTE: For more information about business-related
credits, see FYI-106, Claiming Tax Credits for CRS Taxes
and Business-Related Income. You can find FYI-106 at
www.tax.newmexico.gov/forms-publications.aspx. Click
Publications followed by FYIs, and then click 100
Series-General Information.
Line 6. New Mexico income tax less tax credits. This
entry = line 4 income tax - line 5 credits. Enter zero or a
larger amount.
Line 7. Franchise Tax. The $50 franchise tax is due for
each tax year, including short years. You may not prorate
the franchise tax based on a short-year return.
Every domestic or foreign entity taxed as an S corporation
must pay the $50 franchise tax if any of the following
requirements are true. The entity:
●● Transacts business in, into, or from New Mexico
●● Derives income from property or employment within
this state

Line 8. Total income and franchise tax. This entry =
line 7 franchise tax amount + line 6 net income tax
amount.
Line 9. Amended Returns Only. If this is an amended
return, enter the total amount of all 2017 refunds received
and overpayments applied to 2018.
Line 10. Subtotal. This entry = line 8 total income and
franchise tax amount + line 9 refunds and overpayments.
Line 11. Total Payments. Mark one or more of these
boxes to show the source of the entity's total payments:
●● Estimated
●● Extension
●● Applied from prior year
Enter the total amount of all estimated, extension, and
tax payments applied from the prior year. For amended
returns, include additional tax paid on or after the due date
of the return.
IMPORTANT: If any amounts on line 11 were paid using
an FEIN other than the one entered at the top of the
S-Corp return, a schedule is required with the name and
FEIN under which the payment was made.
Line 12. New Mexico income tax withheld from oil
and gas proceeds. From annual withholding statements
1099-MISC and RPD-41285, Annual Statement of
Withholding of Oil and Gas Proceeds, enter the total of
all New Mexico income tax withheld from oil and gas
proceeds. Include a copy of each statement with the
S-Corp return.
Requirements
●● Only report New Mexico tax withheld on oil and gas
proceeds received by the entity.
●● The only withholding statements the Department
accepts are 1099-MISCs and RPD-41285s issued to
the entity.

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S-Corp
Line 13. New Mexico income tax withheld from
pass-through entities. From annual withholding
statements 1099-MISC and RPD-41359, Annual
Statement of Pass-Through Entity Withholding, enter the
total of all New Mexico income tax withheld on the net
income from a PTE. Include a copy of each statement
with the S-Corp return.
Requirements
●● Only report New Mexico tax withheld on the net
income received from a PTE.
●● The only withholding statements the Department
accepts are 1099-MISCs and RPD-41359s issued to
the entity.
Line 14. Amount from lines 12 and 13 passed to
owners. If the entity passed to owners the income tax
withheld from oil and gas proceeds or PTEs, enter the
amount withheld and reported on RPD-41367.
Line 15. Total payments and tax withheld. This entry =
[line 11 total payments + (line 12 + line 13 taxes withheld)]
- line 14 amount withheld.
Line 16. Tax due. If line 10 is greater than line 15, this
entry = line 10 subtotal - line 15 total payments and tax
withheld.
Line 17. Penalty. The minimum penalty is $5 and the
maximum penalty is 20% of the entity's tax due. If any of
the following is true, this entry = line 16 tax due + penalty:
●● You file late and owe tax.
●● You do not pay the tax on or before the due date of
the return.
●● You do not pay the tax on or before the extended due
date of the return.
Formula to Calculate Penalty
Penalty = tax due from line 16 x 2% x number of months
or partial months past due date or extended due date
If you want the Department to calculate the penalty for
you and send a bill, leave this line blank.
Line 18. Interest. If either of the following is true, this
entry = line 16 tax due + interest:
●● You did not pay the tax due on line 16 by the original
due date.
●● You received an extension of time to file.
Formula to Calculate Interest
Interest = tax due from line 23 x daily interest rate for the
quarter x number of days late

If you want the Department to calculate interest for you
and send you a bill, leave this line blank.
Line 19. Total amount due. This entry = line 16 tax due +
line 17 + line 18.
Line 20. Overpayment. If the amount in line 15 is greater
than the amount line 10, this entry (the refund amount) =
line 15 total payments and tax withheld - line 10 subtotal.
Line 20a. If you want to apply some or all of an
overpayment from line 20 to the 2018 liability, enter the
amount to apply. Otherwise, enter zero.
Line 20b. If you want to receive a refund of all or part of
an overpayment, this entry = line 20 overpayment - line
20a amount to apply to the 2018 liability.
Line 21. Total portion of tax credits to refund. Enter
from Schedule S-Corp-CR, line B, the portion of approved
tax credits the Department may refund to you.
NOTE: S-Corp-CR, line A shows the amount of these
credits to apply to the tax due on the S-Corp return. This is
the same amount as on S-Corp, line 5.
About the Film Production Tax Credit
The amount of film production tax credit you may claim
against the tax due on this S-Corp return and the amount
you may receive as a refund are subject to certain
limitations governing the payment of film production tax
credit claims. For details about these limitations and
how they may impact the return, see the instructions for
RPD-41228, Film Production Tax Credit Claim Form.
Line 22. Total refund of overpaid tax and refundable
credit due to you. This entry = line 20b amount of
overpayment to refund + line 21 tax credit to refund.
Refund Express
If you want a refund of overpaid tax and any refundable
credit (S-Corp, line 22) directly deposited into a checking
or savings account, complete the Refund Express
section. Failure to complete all lines and boxes in this
section results in the Department denying the request and
mailing a paper check to you.
NOTE: The Department is not responsible if a financial
institution refuses a direct deposit, or if misapplication of
a direct deposit refund was caused by a taxpayer's error,
negligence, or malfeasance.
Requirements for Refund Express
●● Lines 1 and 2 and boxes 3 and 4 are complete in the
Refund Express section.

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S-Corp
S CORPORATION'S NAME
123 Main Street
Anyplace, NM 87000

1540

15-000000000

SA

MP

LE

PAY TO THE
ORDER OF ___________________________________________________________________________

$

_________________________________________________________________________________________________ DOLLARS
ANYPLACE BANK
Anyplace, NM 87000

Routing
Number

Account
Number

Do not include the
check number

For _____________________________________	

A211500151 A

_________________________________________________

2015551517 C

●● The account must be located in the territorial
jurisdiction of the U.S.
●● Direct deposits are only allowable to the taxpayer’s
account. The Department denies any request to
deposit funds into another payee's account.
●● The financial institution accepts direct deposits
payable to the name on the S-Corp return.
Why Use Refund Express
●● Prevent any mailed check delays. Refund Express
does not guarantee that you receive a refund sooner,
but the refund reaches the bank more quickly.
●● Payment is more secure. There is no check to get lost.
●● It is convenient. Avoid an extra trip to the bank.
●● It saves tax dollars. Direct deposit costs less than a
check.

1540

the financial institution's location is within the territorial
jurisdiction of the U.S., which includes any of the following:
●● Within the U.S.
●● On a U.S. military base
●● In American Samoa, Guam, the Northern Mariana
Islands, Puerto Rico, or the U.S. Virgin Islands
What Happens for Different Answers
●● If you mark an X in the YES box, you cannot use
Refund Express. Either use a different bank account
or to leave the Refund Express section blank to
receive a paper check.
●● If you do not answer the question, the Department
mails the refund to you in a paper check. To comply
with federal banking rules, anyone who wants their
refund directly deposited into their account must
answer this question.

Refund Express Lines 1 and 2 and Boxes 3 and 4
Line 1. The routing number, for bank identification, has
nine digits. If the first two digits are not 01 through 12 or
21 through 32, the system rejects the direct deposit and
you receive a check. On the sample check on this page,
the routing number is 211500151.

●● If you answer the question incorrectly, the National
Automated Clearing House Association (NACHA)
or the Office of Foreign Assets Control (OFAC) may
delay, reject, or freeze the refund.
●● If the bank does not accept the Refund Express
entries, the Department mails a check to you.

Line 2. The account number has up to 17 characters.
Include hyphens, but omit spaces and special symbols
as you enter the number from left to right. Leave unused
boxes blank. On the sample check, the account number is
2015551517. Do not include the check number.

Taxpayer's Signature
An officer of the corporation must sign and date the
S-Corp return. Enter the following information:
●● Title [of officer]
●● Contact phone number
●● Taxpayer's email address

Box 3. Mark an X in the Checking or Savings box to
indicate the type of account.
Box 4. Mark an X in the YES or NO box to answer
whether the funds for a refund would go to or through
an account located outside the U.S. Marking NO means

Paid Preparer's Use Only
Any person, other than an employee of the corporation,
who prepares the return for compensation must also sign
and date the return. A preparer other than an employee of
the corporation is required to enter the following:
●● Printed preparer's name
●● New Mexico CRS identification number, if the preparer
has one

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S-Corp and S-Corp-1
●● FEIN, if applicable
●● PTIN, the Preparer Tax Identification Number
●● Preparer's phone number
The Department considers an improperly signed or
unsigned return invalid and incomplete for filing purposes.
If the Department receives completed information after
the due date, the Department may assess penalty and
interest.

S-Corp-1

Complete all information in lines 1 through 12 to show the
calculation of net income taxable to owners.
Line 1. Ordinary income (loss) from federal Form
1120S, Schedule K. Enter the ordinary income or loss
as recognized from federal tax return Form 1120S,
Schedule K.
Line 2. Other income (loss) from federal Form 1120S,
Schedule K. Except for guaranteed payments to partners
and health insurance payments made on behalf of the
partners or partners' dependents, enter the sum of all
other income or losses recognized on federal tax return
Form 1120S, Schedule K.
Line 3. Interest income from municipal bonds,
excluding New Mexico bonds. Enter interest income
from non-New Mexico state and local bonds not subject
to federal income tax under Internal Revenue Code (IRC)
Section 103.
Line 4. Subtotal of lines 1 through 3. This entry = line 1
ordinary income (loss) + line 2 other income (loss) + line 3
interest income from municipal bonds except New Mexico
bonds.
Line 5. Interest from U.S. government obligations or
federally-taxed New Mexico bonds. An S corporation
may deduct interest or dividend income from U.S.
government obligations from the corporation's taxable
income only if, and to the extent that, it was included
in taxable income on line 1. This entry, a net amount =
S-Corp line 1 - expenses related to income from U.S.
obligations.

IMPORTANT: Income from Fannie Mae, Ginnie Mae,
Freddie Mac, and other U.S. guarantee entities is not
deductible. Income from repurchasing agreements (repos)
of U.S. obligations is not deductible. Interest on notes
issued by Federal Home Loan Bank obligations are
deductible, but not dividends issues by the Federal Home
Loan Bank. That portion of income paid by mutual funds,
unit investment trusts, and simple trusts derived from
investments in U.S. obligations is deductible.
Interest income for bonds issued by the State of New
Mexico or its political subdivisions is also deductible on
this line to the extent that income was included in federal
taxable income.
Line 6. Allowable deductions from Schedule K.
Except for health insurance payments made on behalf
of the partners or partners' dependents, enter the
allowable deductions recognized on federal Form 1120S,
Schedule K. Not allowed to claim at the entity level on the
S-Corp return are net operating loss carryover nor oil and
gas depletion deductions.
Line 7. Allocated income. If applicable, enter the total
allocated income from S-Corp-B, column 1, line 8.
Line 8. Apportionable income. This entry = line 4
subtotal - (line 5 interest + line 6 allowable deductions +
line 7 allocated income).
Line 9. Average New Mexico percentage. Enter the
average New Mexico percentage from S-Corp-A, line 5.
Line 10. New Mexico apportionable income. This
entry = line 8 apportionable income x line 9 average New
Mexico percentage.
Line 11. New Mexico allocated income. If applicable,
enter New Mexico allocated income from S-Corp-B,
column 2, line 9.
Line 12. NEW MEXICO taxable income. This entry = line
10 apportionable income + line 11 allocated income.
NOTE: If the S-Corp is required to file RPD-41367, report
this amount RPD-41367, line 1.

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S-Corp-A: New Mexico Apportionment Factors
When to Use Schedule S-Corp-A
If the entity's income is derived from both inside and
outside New Mexico, use S-Corp-A to apportion the
entity's income from the entity's regular trade or business
activities.
All reporting entities, except those with 100% New Mexico
activity, must complete Schedule S-Corp-A in its entirety,
including reporting entities with:
●● Activities in New Mexico that are immune from
corporate income tax under P.L. 86-272
●● No business activity in New Mexico during the tax year
Apportionable income means income arising from
transactions and activities in the regular course of
a corporation’s trade or business. If the acquisition,
management, or disposition of the property constitutes
integral parts of the entity's regular trade or business,
apportionable income includes income from both
tangible and intangible property. It includes investment
income related to or used in the entity's overall business
operations.
You are required to include on S-Corp-A the following
sources of apportionable income:
●● Dividend income from the investment of working
capital or dividend income from an investment that is
functionally connected to the entity's trade or business
●● Interest income from the investment of working capital,
interest income from capital investments used in the
overall business operations, or interest income from an
investment that is functionally connected to the entity's
trade or business
●● Royalty income and fees from patents, copyrights,
franchises, trademarks, and licenses developed in
the regular course of the entity's trade or business,
or royalty income and fees from a product or mineral
interest used in the regular course of the entity's trade
or business
●● Rental or subrental income from property purchased,
leased, or used in the regular course of the entity's
trade or business
●● Gains or losses from the sale of assets used in the
regular course of the entity's trade or business, or
assets sold that had been treated as business assets
in prior years
●● If held within the regular course of the entity's trade or
business, income from a partnership or non-corporate
entity

Construction contractors, railroads, airlines, trucking
companies, financial institutions, television and radio
broadcasters, and publishers are subject to special
apportionment rules. Taxpayers electing the combined
or consolidated methods of reporting must apply these
apportionment rules to each qualifying entity included on
the return.
Consistency in Reporting
Consistency in a entity's reporting is required and
includes:
●● Classification of income as allocable or apportionable
●● Valuation of property and inclusion in the property
factor
●● Treatment of compensation for the payroll factor
●● Exclusion or inclusion of receipts in the sales factor for
returns filed in all states
An entity must disclose any change or inconsistency from
prior year returns in a statement attached to the return.
The statement identifies the amounts and reasons for the
changes or inconsistencies.
Petition Procedure Open to Taxpayers
If the procedures for allocation and apportionment
required for S-Corp-A and S-Corp-B do not fairly
represent the extent of the taxpayer’s business activity
in New Mexico, the taxpayer may petition to use, or the
Secretary of Taxation and Revenue may require taxpayers
to use, another method to apportion or allocate all or part
of the taxpayer’s income.

Completing Schedule S-Corp-A

When you complete S-Corp-A, follow these basic
requirements for the property, payroll, and sales factor
sections:
●● Percentages. Calculate each percentage to four
decimal places. For example, 22.5431%.
●● Lines 1, 2, and 3. If you complete column 2, you must
complete column 1, Total Everywhere.
	
IMPORTANT: If column 1 is blank, the Department 		
	
apportions 100% of the income to New Mexico.

PROPERTY FACTOR
Lines 1a, 1b, 1c, and 1d. For each line, as applicable,
enter amounts in the columns for inventory, real property,
personal property, and rented property.
Line 1e. In column 1, enter the total of the column
amounts for lines 1a, 1b, 1c, and 1d. In column 2, enter
the total of the column amounts for lines 1a, 1b, 1c, and
1d.

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S-Corp-A: New Mexico Apportionment Factors
Line 1. Property factor. In columns 1 and 2, enter a
positive number or, if the result is a negative number,
enter zero. Calculate the percentage for this factor as
follows:
	
	

amount in column 2
amount in column 1

x 100 = property factor percentage

In other words:
1.	 Divide the average value of the real and tangible
personal property owned or rented and used in New
Mexico during the tax year to produce apportionable
income by the average value of all real and tangible
personal property owned or rented everywhere and
used during the tax year to produce apportionable
income.
2.	 To find the property factor percentage, multiply the
result by 100.
Valuation of Property
Property shall be valued according to the following rules:
●● Inventory shall be valued according to the valuation
method used for federal income tax purposes.
●● Value property owned during the tax year shall be
valued at its original cost before the allowance for
depreciation amount at the time of acquisition by the
taxpayer and adjusted by the taxpayer and adjusted
by subsequent capital additions, improvements, and
partial dispositions.
●● Value property rented from others shall be valued
at eight times the net annual rental rate. The net
annual rate is the annual rent paid less any annual
rent received from subrental of the same property. If
property owned by others is used by the corporation
at no charge or rented by the corporation at a nominal
rate, the net annual rental rate is determined on
the basis of a reasonable market rental rate for the
property.
Determine the average value of property by doing the
following:
1.	 Add the total value of property held by the taxpayer
at the beginning of the tax period to the total value of
property held at the end of the tax period.
2.	 Divide the sum by two.
NOTE: If the Department determines a monthly average
is necessary to correctly reflect the average value of
the taxpayer’s property, the Department may require
the taxpayer to calculate an average value on a monthly
basis.

PAYROLL FACTOR
Line 2a. In columns 1 and 2, enter the total wages,
salaries, commissions, and other compensation of
employees related to apportionable income.
Line 2. Payroll factor. In columns 1 and 2, enter a
positive number or, if the result is a negative number,
enter zero. Calculate the percentage for this factor as
follows:
amount in column 2
				
amount in column 1

x 100 = property factor percentage

In other words:
1.	 Divide the total amount paid as compensation to
employees in New Mexico during the tax year by the
total amount paid as compensation to employees
everywhere during the tax year.
2.	 To find the payroll factor percentage, multiply the
result by 100.
Compensation means wages, salaries, commissions,
and any other form of remuneration paid to employees
for personal services. Only amounts paid directly to
employees are includable in the payroll factor.
Employees include leased employees where the taxpayer
is considered an employer for payroll tax purposes.
Employees are not independent contractors to whom the
taxpayer issues federal Form 1099.
Include in the payroll factor only compensation attributable
to business operations subject to apportionment. Exclude
from the payroll factor compensation of an employee
whose primary activities relate to the production of
non-business income; however, you may include this
compensation as a related expense of the allocated
activity.

SALES FACTOR
Line 3a. In columns 1 and 2, enter the total amounts of
gross receipts.
Line 3. Sales factor. If you have a federal taxable
income or loss, in column 1 enter only a positive number.
Otherwise, in columns 1 and 2 enter a positive number or,
if the result is a negative number, enter zero.Calculate the
percentage for this factor as follows:
amount in column 2
				
amount in column 1

x 100 = property factor percentage

In other words:
1.	 Divide the total gross receipts attributable to New
Mexico during the tax year, excluding returns,

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S-Corp-A: New Mexico Apportionment Factors
allowances, and allocated income, by the total gross
receipts attributable to New Mexico during the tax
year, excluding returns, allowances, and allocated
income.
2.	 To find the sales factor percentage, multiply the result
by 100.
Gross receipts means all income from transactions
and activities in the regular course of business including
income from licensing intangible personal property.
What are New Mexico Sales?
Sales of tangible personal property are New Mexico sales
if either of the following is true. The property is:
●● Delivered or shipped to a purchaser other than the
U.S. government within New Mexico regardless of the
FOB (free on board) point or other conditions of the
sale
●● Shipped from an office, store, warehouse, factory, or
other place of storage in New Mexico and either of the
following is true:
♦ 	The purchaser is the U.S. government.

IMPORTANT: You are required to provide the average
percentage on line 5 to all owners of the entity. Also enter
this percentage on S-Corp-1, line 9.
The three-factor formula is for all taxpayers except the
following exclusions, described in detail later in this
section:
●● Exclusion 1. Qualifying manufacturers who elect to
use the apportionment formula with a single-weighted
sales factor.
●● Exclusion 2. A taxpayer whose principal business
activity in New Mexico is a headquarters operation
and who elects to use the single-weighted sales factor
formula.
●● Exclusion 3. Taxpayers allowed or required to
eliminate one or more factors because the threefactor formula does not fairly represent the extent of
their business activity in New Mexico.
Taxpayers who elect to use the manufacturers
apportionment formula or who are required to use one
of the other exclusions, must follow the instructions
described next.

♦ 	 The taxpayer is not taxable in the state of the		
For Help Electing an Exclusion Method
purchaser.
For help electing any exclusion method or if you have any
questions, call (505) 827-0825 or toll free (866) 809-2335,
Sales other than sales of tangible personal property are
or email [email protected].
New Mexico sales if any of the following are true:
●● The income-producing activity was performed in New
Exclusion 1
Mexico.
Electing Manufacturers Apportionment Formula
●● The income-producing activity was performed
Taxpayers whose principal activity is manufacturing
both inside and outside New Mexico, but a greater
may elect to use the special apportionment formula
proportion was performed within New Mexico than
shown in this section. For tax years beginning on or
in any other single state. The proportion shall be
after January 1, 2014, the election allows taxpayers to
determined by the cost of performance in each state.
apportion their business income to New Mexico using an
●● The gross receipts were from the rental, lease,
alternative method that, over a five-year period, phases in
licensing, or any other use of either real or tangible
a single-weighted sales factor.
personal property during the time the property was in
New Mexico.
If elected, the taxpayer apportions taxable income
●● The gross receipts were from the performance of
by multiplying it by a fraction. The numerator is the
personal services in New Mexico.
single-weighted sales factor plus the property and payroll
factors of the business in New Mexico during the tax year.
Line 4. Sum of factor percentages. Add lines 1, 2, and
The denominator is the total number of factors (8 + 1 + 1).
3 to find the sum of factor percentages and then enter the
percentage sum.
The election for this special factor method applies to the
tax year in which the manufacturer notifies the Department
Line 4a. Count of factors. Count all the factors you used
of their election, until the manufacturer notifies the
and enter the total count here.
Department, in writing, that the election is terminated. The
manufacturer, however, shall not terminate the election
until the method of apportioning business income has
Line 5. Average New Mexico Percentage. New Mexico
been used by the taxpayer for at least three consecutive
uses an evenly weighted three-factor formula. Taxpayers
tax years, covering at least 36 calendar months.
who use the three-factor formula complete lines 4, 4a,
and 5 on Schedule S-Corp-A.
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S-Corp-A: New Mexico Apportionment Factors
Single-Weighted Sales Factor For Electing Manufacturers
For Tax Years Beginning
January 1, 2017 through December 31, 2017

Apportionment Formula
(8 x sales factor) + property factor + payroll factor
10

This election applies to the separately filed return of the
taxpayer or to the combined or consolidated return the
taxpayer elected to be included in.
The statutory authority for this elective method is Section
7-4-10B NMSA 1978.
Manufacturing means combining or processing
components or materials to increase their value for sales
in the ordinary course of business, but does not include
any of the following:
(a) construction
(b) farming
(c) power generation, except for electricity generation at a
facility other than one for which both location approval
and a certificate of convenience and necessity are
required prior to commencing construction or operation
of the facility, pursuant to the Public Utility Act
(Articles 1 through 6 and 8 through 13 of Chapter 62
NMSA1978)
(d) processing natural resources, including 			
	hydrocarbons
Electing the Manufacturers Method
To elect to use the manufacturers apportionment formula,
do the following:
1.	 No later than the filing date of the first return to which
the election applies, notify the Department in writing.
2.	 Submit the notification to the Taxation and Revenue
Department, CIT Unit, P.O. Box 630, Santa Fe,
NM 87504-0630.
3.	 On Schedule S-Corp-A, complete line 5B.
NOTE: To terminate the election, submit that notification
to the address in step 2.

Exclusion 2
Electing Headquarters Operation Apportionment
Formula
Taxpayers whose principal business activity in New
Mexico is a headquarters operation may elect to use
a single-weighted sales factor apportionment formula.
For tax years beginning on or after January 1, 2015, the
election allows the taxpayer to apportion the business

income to New Mexico using a single-weighted sales
factor.
If elected, the taxpayer apportions taxable income by
multiplying it by a fraction. The numerator is the total sales
of the business in New Mexico during the tax year. The
denominator is the total sales of the taxpayer from any
location within or outside of the state during the tax year.
The election for the special factor method applies to the
tax year in which the business notifies the Department of
their election, until the business notifies the Department,
in writing, that the election is terminated. The taxpayer,
however, shall not terminate the election until the method
of apportioning business income has been used by the
taxpayer for at least three consecutive tax years, covering
at least 36 calendar months.
The statutory authority for this elective method is Section
7-4-10C NMSA 1978.
Headquarters operation means (a) and all its items are
true or (b) and all its items are true:
(a) the center of operations of a business:
1) where corporate staff employees are physically	
	
	employed
2) where centralized functions are performed, 		
	 including administrative, planning, managerial, 		
	 human resources, purchasing, information 		
	 technology, and accounting, but not including a		
	 call center
3) the function and purpose of which is to manage 		
	 and direct most aspects and regional and regional 		
	 headquarters, if the national headquarters is 		
	 subordinate only to the ownership of the business 		
	 or its representatives and the regional headquarters 	
	 is subordinate to the national headquarters
(b) the center of operations of a business:
1) the function and purpose of which is to manage 		
	 and direct most aspects of one or more 			
	 centralized functions 	
2) from which final authority over one or more 		
	 centralized functions is issued

S-Corp							- 17 -				

www.tax.newmexico.gov

S-Corp-A: New Mexico Apportionment Factors
Electing the Headquarters Operation Method
To elect to use the headquarters operation apportionment
formula, do the following:
1.	 No later than the filing date of the first return to which
the election applies, not