Lawyers who practice in the tax and transaction areas have to become well versed in state taxation. This is especially true in a state like New Mexico where State taxation raises more issues than Federal taxation.
At the legislative level (and public policy level), state tax issues are probably the main concern faced by all states. The current economic client has only heightened state’s focusing on tax issues: Should states reduce taxes to provide incentive for economic activity or increase taxes to meet governmental needs? In the recent New Mexico Legislative session, tax issues predominated the discussion, with the chair of the Senate Finance Committee advocating for a tax commission to study our tax system. Most individuals who have followed New Mexico believe that the state’s taxing system no longer is based on recognized tax policy principles.
The State and Local Taxation course will address state tax issues in light of tax policy principles. The objective of the course is to have students study tax issues from both the legislative and practitioner perspectives. They, working in groups, will do this by drafting a Model Gross Receipts Tax Act and a Model Corporate Income Tax Act for New Mexico. Drafting those Acts requires an understanding of tax principles faced both at the public policy level and the practice level. We will then attempt to present the Acts to the relevant legislative tax committees for their consideration.
The course will first review tax policy principles. Understanding tax policy principles is essential to understanding any taxation, especially state taxation. Because state taxing powers are limited by the commerce and due process clauses of the Constitution, the course will next review the relevant Supreme Court decisions dealing with the constitutional limitations imposed on a state’s jurisdiction to tax, providing the test or standards given to us by the Court.
We will then focus our attention on the New Mexico Gross Receipts Tax Act and the New Mexico Corporate Income Tax Act. Although we are concentrating on New Mexico, the principles, and most of the underlying statutory provisions, are the same in most states.
After reviewing those different tax Acts, the class will be divided into two groups - the GRT (Gross Receipts Tax) group, and the CIT (Corporate Income Tax) group. Each group will draft the respective tax act. To help with this endeavor I have enlisted the services of Richard Anklam, who is the President of the New Mexico Tax Research Institute. Richard is a recognized expert in the area of taxation, not only in New Mexico but nationwide. I also plan to engage the services of other individuals who are knowledgeable in the area. New Mexico is blessed with practitioners who have national reputations.
Students will be evaluated on class participation and their model acts. There will be no casebook for the course. I will hand out materials and assign cases and other materials that are available online.
The course is limited to 12 students.
Updated: March 21, 2012