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Governor proposes tax cuts to boost NM economy

SANTA FE, N.M. (AP) -- Republican Gov. Susana Martinez is asking the Legislature to reduce New Mexico's corporate income tax as an economic development incentive to make the state more competitive in recruiting businesses.

Martinez outlined the proposal Tuesday in her state of the state speech to a joint session of the Legislature.

The governor proposes to lower the corporate income tax rate to 4.9 percent from 7.6 percent over several years. She also recommends revamping how taxes are determined for corporations that operate in multiple states. Companies would have the option of basing their tax liability on their sales in New Mexico.

Currently, a corporation's tax obligation is tied to its payroll, property and sales in New Mexico.

The governor also proposes a tax credit for small businesses that create jobs.