{"id":7229,"date":"2003-12-03T15:40:44","date_gmt":"2003-12-03T22:40:44","guid":{"rendered":"https:\/\/www.tax.newmexico.gov\/all-nm-taxes\/?p=7229"},"modified":"2026-04-11T13:34:42","modified_gmt":"2026-04-11T19:34:42","slug":"xerox-corporation","status":"publish","type":"post","link":"https:\/\/www.tax.newmexico.gov\/all-nm-taxes\/2003\/12\/03\/xerox-corporation\/","title":{"rendered":"Xerox Corporation"},"content":{"rendered":"

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12\/03\/2003<\/div>\n<\/div>\n
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03-22<\/a><\/p>\n

A field audit of the taxpayer for 1995, 1996 and 1998, found that in calculating New Mexico taxable corporate income under the combined filing method, Xerox had deducted dividends and Subpart F income received from foreign subsidiaries whose operations were unitary with Xerox\u2019s domestic unitary operations. \u00a0Xerox also excluded dividends received from certain nonunitary domestic subsidiaries from its New Mexico return. \u00a0In determining Xerox\u2019s corporate income tax liability for the audit years, the Department allowed the exclusion of domestic dividends from nonunitary subsidiaries, but included the dividends and Subpart F income Xerox received from its unitary foreign subsidiaries as apportionable business income. \u00a0The Department then allowed factor relief for the foreign source income, using what is commonly referred to as the \u201cDetroit formula\u201d. \u00a0The Department assessed Xerox additional corporate income tax and interest, and Xerox protested the assessment. \u00a0As grounds for its protest, Xerox argued that under the U.S. Supreme Court\u2019s holding in Kraft and the N.M. Supreme Court\u2019s holding in Conoco, taxing Xerox\u2019s unitary foreign dividends while excluding from tax its nonunitary domestic dividends resulted in an unconstitutional discrimination against foreign commerce. \u00a0The protest was denied for the following reasons:<\/p>\n

    \n
  1. The facts of Kraft and Conoco, which addressed the disparate tax treatment of unitary foreign dividends and unitary domestic dividends under the separate entity filing method are distinguishable from the facts of this case, which involve the disparate tax treatment of unitary foreign dividends and nonunitary domestic dividends under the combined filing method. \u00a0<\/li>\n
  2. The differential tax treatment of which Xerox complains was not based on the location of its subsidiaries\u2019 activities, i.e., foreign or domestic, but on whether a subsidiary was unitary or nonunitary with the business operations of its parent corporation. \u00a0<\/li>\n<\/ol>\n

    Xerox did not presented any evidence or argument to show that New Mexico\u2019s apportionment formula\u2014as applied under the combined filing method and modified by the Detroit formula\u2014did not result in a fair approximation of the corporate income that is “reasonably related\u201d to Xerox\u2019s activities in New Mexico. \u00a0<\/p>\n<\/div>\n

    [\/et_pb_text][et_pb_text _builder_version=”4.6.6″ _module_preset=”default”]<\/p>\n

    Back to Tax Decisions & Orders<\/a><\/p>\n

    [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":"

    12\/03\/2003 03-22 A field audit of the taxpayer for 1995, 1996 and 1998, found that in calculating New Mexico taxable corporate income under the combined filing method, Xerox had deducted dividends and Subpart F income received from foreign subsidiaries whose operations were unitary with Xerox\u2019s domestic unitary operations. \u00a0Xerox also excluded dividends received from certain […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[43],"tags":[],"class_list":["post-7229","post","type-post","status-publish","format-standard","hentry","category-tax-decisions-orders"],"yoast_head":"\nXerox Corporation : All NM Taxes<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link 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