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Are royalties derived from intangible property subject to tax?

If an entity receives royalties for the license to use a franchise in New Mexico, the royalties are subject to gross receipts tax. If the taxpayer is:

  • A C-corporation, it is also subject to corporate income tax (CIT) and corporate franchise tax
  • An S-corporation, it is subject to corporate franchise tax, and its shareholders are subject to personal income tax (PIT) and the gross receipts tax.
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