New Mexico Administrative Code › Title 3 - TAXATION › Chapter 5 - UNIFORM DIVISION OF INCOME FOR TAX PURPOSES › Part 19 - EQUITABLE ADJUSTMENT OF STANDARD ALLOCATION OR APPORTIONMENT › Section 3.5.19.15 - SPECIAL RULES - TRUCKING COMPANIES

Current through Register Vol. 35, No. 13, July 16, 2024
A. The special rules established in Section
				3.5.19.15 NMAC apply to trucking companies.
B.
In general.
As used in
				this section, the term "trucking company" means a motor common carrier, a motor
				contract carrier or an express carrier which primarily transports tangible
				personal property of others by motor vehicle for compensation. Where a trucking
				company has income from sources both within and without this state, the amount
				of business income from sources within this state shall be determined pursuant
				to this section. In such cases, the first step is to determine what portion of
				the trucking company's income constitutes "business" income and what portion
				constitutes "nonbusiness" income under Subsections A and E of Section
				7-4-2 NMSA 1978 and
				Sections 3.5.1.9 and 3.5.1.10 NMAC. Nonbusiness income is directly allocable to
				specific states pursuant to the provisions of Sections
				7-4-5
				through
				7-4-9
				NMSA 1978, inclusive. Business income is apportioned among the states in which
				the business is conducted and pursuant to the property, payroll and sales
				apportionment factors set forth in this section. The sum of the items of
				nonbusiness income directly allocated to this state and the amount of business
				income attributable to this state constitutes the amount of the taxpayer's
				entire net income which is subject to tax in this state.
C.
Business and nonbusiness
				income.
For definitions and rules for determining business and
				nonbusiness income, see Sections 3.5.1.9 and 3.5.1.10 NMAC.
D.
Apportionment of business
				income.
(1) In general. The property
				factor shall be determined in accordance with Parts 3.5.11 through 3.5.13 NMAC,
				inclusive, the payroll factor in accordance with Parts 3.5.14 and 3.5.15 NMAC,
				and the sales factor in accordance with Parts 3.5.16 through 3.5.18 NMAC,
				inclusive, except as modified by this section.
(2) The property factor.
(a) Property valuation. Owned property shall
				be valued at its original cost and property rented from others shall be valued
				at eight (8) times the net annual rental rate in accordance with Section
				7-4-11
				NMSA 1978 and Part 3.5.11 NMAC.
(b)
				General definitions. The following definitions are applicable to the numerator
				and denominator of the property factor, as well as other apportionment factor
				descriptions.
(i) "Average value" of property
				means the amount determined by averaging the values at the beginning and end of
				the income tax year, but the taxation and revenue department may require the
				averaging of monthly values during the income tax year or such averaging as is
				necessary to reflect properly the average value of the trucking company's
				property.
(ii) "Mobile property"
				means all motor vehicles, including trailers, engaged directly in the movement
				of tangible personal property, other than support vehicles used predominantly
				in a local capacity. Mobile property shall include purchased
				transportation.
(iii) A "mobile
				property mile" is the movement of a unit of mobile property a distance of one
				mile whether loaded or unloaded.
(iv) "Original cost" is deemed to be the
				basis of the property for federal income tax purposes (prior to any federal
				income tax adjustments, except for subsequent capital additions, improvements
				thereto, or partial dispositions); or, if the property has no such basis, the
				valuation of such property for interstate commerce commission purposes. if the
				original cost of property is unascertainable under the foregoing valuation
				standards, the property is included in the property factor at its fair market
				value as of the date of acquisition by the taxpayer.
(v) "Property used during the course of the
				income tax year" includes property which is available for use in the taxpayer's
				trade or business during the income year.
(vi) "Purchased transportation" means the
				taxpayer's use of a motor vehicle owned and operated by another for the purpose
				of transporting tangible personal property for which a charge, whether based
				upon a per diem, mileage, or other basis, is incurred.
(vii) "Temporarily used" means the use of any
				mobile property owned by another for a period not to exceed a total of 30 days
				during any income tax year.
(viii)
				The "value" of owned real and tangible personal property means its original
				cost.
(ix) The "value" of rented
				real and tangible personal property means the product of eight (8) times the
				net annual rental rate.
(c) The denominator and numerator of the
				property factor.
(i) The denominator of the
				property factor shall be the average value of all of the taxpayer's real and
				tangible personal property owned or rented and used during the income year. The
				numerator of the property factor shall be the average value of the taxpayer's
				real and tangible personal property owned or rented and used in this state
				during the income year. In the determination of the numerator of the property
				factor, all property, except mobile property as defined in this section, shall
				be included in the numerator of the property factor in accordance with Sections
				7-4-11
				to
				7-4-13
				NMSA 1978, inclusive, and Parts 3.5.11 through 3.5.13 NMAC,
				inclusive.
(ii) Mobile property as
				defined in this section, which is located within and without this state during
				the income year, shall be included in the numerator of the property factor in
				the ratio which mobile property miles in the state bear to the total mobile
				property miles.
(3) The payroll factor.
(a) The denominator of the payroll factor is
				the compensation paid everywhere by the taxpayer during the income year for the
				production of business income. The numerator of the payroll factor is the total
				compensation paid in this state during the income year by the taxpayer. With
				respect to all personnel, except those performing services within and without
				this state, compensation paid to such employees shall be included in the
				numerator as provided in Section
				7-4-14
				and
				7-4-15
				NMSA 1978 and Parts 3.5.14 and 3.5.15 NMAC.
(b) With respect to personnel performing
				services within and without this state, compensation paid to such employees
				shall be included in the numerator of the payroll factor in the ratio which
				their services performed in this state bear to their services performed
				everywhere based on mobile property miles.
(4) The sales (revenue) factor.
(a) In general.
(i) All revenue derived from transactions and
				activities in the regular course of the taxpayer's trade or business which
				produce business income shall be included in the denominator of the revenue
				factor.
(ii) The numerator of the
				revenue factor is the total revenue of the taxpayer in this state during the
				income year. The total state revenue of the taxpayer, other than from hauling
				freight, mail, and express, shall be attributable to this state in accordance
				with Sections
				7-4-16
				to
				7-4-18
				NMSA 1978 and Parts 3.5.16 through 3.5.18 NMAC.
(b) Numerator of the sales (revenue) factor
				from freight, mail, and express. The total revenue attributable to this state
				during the income year from hauling freight, mail, and express shall be:
(i) intrastate: All receipts from any
				shipment which both originates and terminates within this state; and
(ii) interstate: That portion of the receipts
				from movements or shipments passing through, into, or out of this state as
				determined by the ratio which the mobile property miles traveled by such
				movements or shipments in this state bear to the total mobile property miles
				traveled by movements or shipments from points of origin to
				destination.