When a resident individual is liable to another state for tax upon income derived from sources outside this state but also included in net income under the Income Tax Act as income allocated or apportioned to New Mexico pursuant to Section 7-2-11 NMSA 1978, the individual, upon filing with the secretary satisfactory evidence of the payment of the tax to the other state, shall receive a credit against the tax due this state in the amount of the tax paid the other state with respect to income that is required to be either allocated or apportioned to New Mexico. However, in no case shall the credit exceed the amount of the taxpayer's New Mexico income tax liability on that portion of income that is required to be either allocated or apportioned to New Mexico on which the tax payable to the other state was determined. The credit provided by this section does not apply to or include income taxes paid to any municipality, county or other political subdivision of a state.

History: 1953 Comp., § 72-15A-11, enacted by Laws 1965, ch. 202, § 11; 1970, ch. 34, § 1; 1973, ch. 133, § 1; 1974, ch. 56, § 2; 1981, ch. 37, § 23; 1990, ch. 49, § 7; 1992, ch. 78, § 1; 2013, ch. 179, § 1.

The 2013 amendment, effective July 1, 2013, limited the tax credit paid to another state to the amount of tax liability in New Mexico; and in the second sentence, after "credit exceed", deleted "five and one-half percent" and added "the amount of the taxpayer's New Mexico income tax liability on that portion".

Applicability. — Laws 2013, ch. 179, § 2 provided that the provisions of Laws 2013, ch. 179, § 1 apply to taxable years beginning on or after January 1, 2013.

The 1992 amendment, effective May 20, 1992, added all of the present language of the first sentence beginning with "with respect to income"; and inserted "that is required to be either allocated or apportioned to New Mexico" in the second sentence.

The 1990 amendment, effective May 16, 1990, deleted the subsection designation "A" and "Except as provided otherwise in Subsection B of this section" at the beginning, inserted "as income allocated or apportioned to New Mexico pursuant to Section 7-2-11 NMSA 1978" and substituted "secretary" for "director" in the first sentence, rewrote the third sentence which read "This credit does not apply to or include income taxes paid to any municipality" and deleted former Subsection B which read "This credit does not apply during the first taxable year in which an individual incurs tax liability as a resident. Income of such an individual shall be allocated and apportioned in accordance with Section 7-2-11 NMSA 1978".

Am. Jur. 2d, A.L.R. and C.J.S. references. — 71 Am. Jur. 2d §§ 530 to 532, 549 to 551.

What constitutes doing business, business done, or the like, outside the state for purposes of allocation of income under tax laws, 167 A.L.R. 943.

Other state or country, credit for income tax paid to, construction and application of statutory provisions allowing, 12 A.L.R.2d 359.

84 C.J.S. Taxation §§ 60 to 68; 85 C.J.S. Taxation §§ 1738 to 1755.