The New Mexico Legislature has again passed a bill that could require contractors operating the Los Alamos and Sandia national laboratories to pay the state’s gross receipts tax, even if the contractors are nonprofit organizations.
The state House of Representatives in Santa Fe passed Senate Bill 11 on Sunday by a vote of 64-0. The Senate passed the measure 29-6 on Feb. 5. The bill now heads to New Mexico Gov. Michelle Lujan Grisham (D) — the former Democratic congresswoman from Albuquerque — for a signature or veto. The Grisham administration had not said if it would sign or veto the measure at deadline Monday for Weapons Complex Morning Briefing.
If enacted, the bill would take effect July 1. The measure identifies types of businesses that are exempt from the state’s gross receipts tax, which is essentially a tax on revenue, but pointedly excludes from that exemption “receipts of a prime contractor that are derived from operating a facility in New Mexico designated as a national laboratory by an act of Congress.”
The state legislature passed a similar bill last year, but then-Gov. Susana Martinez (R) vetoed the measure. State proponents of a gross receipts tax for national labs estimate the Los Alamos National Laboratory alone pays $25 million to $30 million a year in such taxes.
Los Alamos prime contractor Triad National Security is organized as a nonprofit but lacks federal tax-exempt status. The company currently pays the gross receipt taxes levied by the state and Los Alamos County. At Triad’s request, the New Mexico Department of Revenue and Taxation assessed the company’s liability in 2018 and found that the nonprofit owed the tax.
The National Nuclear Security Administration, which owns the Los Alamos National Laboratory, has said it will decide by June whether to require Triad to apply for federal tax-exempt status.
National Technology and Engineering Solutions of Sandia manages Sandia in Albuquerque. That for-profit entity is a Honeywell subsidiary and already pays New Mexico gross receipts taxes.
