Taxpayers whose principal activity is manufacturing may choose to use a four-factor formula (sales x 2, plus property and payroll) for tax years beginning on or after January 1, 1995, and before January 1, 2011. The manufacturer must use the four-factor method for a total of three consecutive tax years covering at least 36 calendar months.

Manufacturing means, for purposes of electing the four-factor apportionment method, combining or processing components or materials to increase their value for sale in the ordinary course of business. Manufacturing does not include construction, farming, processing of natural resources and most power generation.

A taxpayer may use this option if the businesss combined property and payroll factor percentages in the state exceed the sum of the taxpayers property and payroll factor for the first taxable year beginning on or after January 1, 1991. The taxpayer must make the election to use the four-factor method in writing no later than the filing date of the first return to which the election will apply. Statutory authority for this elective method is in Section 7-4-10(B) NMSA 1978.

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