A bill that supporters say would force some out-of-state corporations to pay more in state taxes cleared an important Senate committee for the first time in eight years Wednesday night.

The Senate Corporations and Transportation Committee voted 5 to 4 to send Senate Bill 9, sponsored by Sen. Peter Wirth, D-Santa Fe, on to the Senate Finance Committee without a recommendation.

Wirth celebrated Wednesday's victory. But the bill faces an uncertain future as it moves on to Senate Finance, which has earned a reputation as a killing ground for legislation in recent years.

Gov. Susana Martinez also has said she would veto the bill if the Legislature passed it.

Wirth has repeatedly framed his bill as a way to help New Mexico businesses, and he did that again Wednesday night, arguing that local businesses, both small and large, are at a disadvantage because of New Mexico's tax code.

His bill would require all businesses filing state corporate income-tax returns to file them the same way, he said.

Currently, out-of-state corporations have a choice. They can either file a combined report that separates out how much profit was earned here versus what was earned in other states, or they can file a separate return that allows them to expense profits to states that don't have a corporate income tax, such as Delaware.

Removing that second option would allow New Mexico to capture new tax revenue from those out-of-state corporations currently shifting revenues to states with lower or no corporate tax rates. Wirth earlier in the week said he couldn't name which corporations might pay higher taxes if his bill were to become law. But he said the extra income netted through requiring all corporations to play by the same rules would allow New Mexico to lower its corporate income tax from 7.6 percent to 7 percent.

"It is fundamentally unfair to allow this shifting to happen," Wirth said.

A series of small-business people and liberal advocates stepped up to support Wirth's legislation, saying it made New Mexico's tax code fairer.

But opponents, including lobbyists for large U.S. and multinational corporations, said the legislation would likely lead to layoffs at companies hit by the new law.

Richard Minzner, a former state Taxation and Revenue secretary, told state lawmakers that companies would be encouraged to reduce their workforce in New Mexico if the legislation became law.

That's because income for a company and all its affiliates would be combined into one pool. Then the company would pay taxes on revenues found to have been generated in New Mexico based on the company's payroll here as well as the amount of property and sales generated here.

"If you lay off people in New Mexico, that payroll piece goes down," Minzner said, explaining that companies could reduce the workforce to avoid taxes.

Dan Najjar, representing Intel, also told lawmakers the corporation's New Mexico location is its highest-taxed plant anywhere in the globe, and this bill would raise it.

The Martinez administration, meanwhile, has said that passing Wirth's proposal would render New Mexico even less competitive in the contest for attracting businesses. That's because most states with combined reporting have formulas that allow companies to separate a more significant amount of profits earned through transactions to other states.

Opponents also said that New Mexico currently has one of the highest corporate income-tax rates in the region.

But Wirth argued that adopting his proposal would allow the state to lower the tax rate, a chief benefit, he said.

There was only one attempt to amend the bill Wednesday night, and it came from the committee chairman, Sen. Phil Griego, D-San Jose, who wanted to exempt all corporations from Wirth's proposal except big-box retailers with buildings larger than 30,000 square feet. But the committee shot the proposed amendment down.

Wirth's bill wasn't the only noteworthy legislation the Corporations Committee took up Wednesday.

Prior to debating Wirth's bill, the committee voted 8 to 2 to pass a bill to exempt qualified TV series from New Mexico's $50 million cap on film-industry incentives, enacted into law last year.

AMC's Breaking Bad and USA's In Plain Sight, both shot in Albuquerque, are examples of productions that could qualify. "They spend $1 million a week here, and we want them to continue here," Griego said.

Sen. William Burt, a Republican from Alamogordo, which has landed its share of film and TV productions, called the legislation a "jobs bill."

"Whether or not the governor signs it is an interesting question," added Sen. Tim Keller, D-Albuquerque.

Contact Trip Jennings at 986-3050 or tjennings@sfnewmexican.com.