New Mexico ranks #7 overall out of the 51 U.S. jurisdictions for its friendliness towards faith-based nonprofit organizations, making it one of the best states in which to operate a faith-based nonprofit. New Mexico has several policies that facilitate the contributions of faith-based nonprofits, including an automatic exemption from state corporate income tax for religious organizations that have 501(c)(3) status and a broad exemption from charitable solicitation registration for religious organizations. New Mexico, however, has some policies that are burdensome to faith-based nonprofits operating in the state, such as a Blaine Amendment and a lack of protection for religious exercise during a state of emergency.
Religious Freedom:
State Constitutional Protection of Free Exercise:
0
/5
The New Mexico Constitution follows in lockstep with the federal constitution’s protections, meeting but not exceeding the required minimum protections of the First Amendment.
State Religious Freedom Restoration Act:
3
/5
New Mexico has enacted a RFRA that protects the religious free exercise of all individuals and entities by requiring government burdens on religious exercise to satisfy strict scrutiny. Since these protections originate in a statute rather than the state constitution, New Mexico does not receive the highest score for this factor.
Religious Freedom for Nonprofits with Public Programming:
3
/5
New Mexico’s nondiscrimination laws generally restrict religious freedom for religious organizations that offer public programming and facilities but provide accommodations or exemptions for the vast majority of religious organizations.
Religious Freedom for Faith-Based Employers:
3
/5
New Mexico’s nondiscrimination laws related to employment are broad but provide strong accommodations or exemptions to generally protect the autonomy of the vast majority of religious organizations.
Protections for Religious Exercise in State of Emergency:
-3
/5
New Mexico law has no explicit constitutional or statutory protections for religious exercise during a time of emergency.
Blaine Amendment:
-3
/5
The New Mexico Constitution contains a Blaine Amendment that could prevent the participation of faith-based schools in generally available public benefit programs on the same terms as similarly situated secular schools. This is not as broad as a general Blaine Amendment, which prohibits all aid to faith-based institutions, but is still detrimental to the work of faith-based institutions. Current U.S. Supreme Court precedent has rendered this language ineffective, but it could become effective in the future if Court precedent changes.
Regulatory Freedom:
Nonprofit Religious Corporation Act:
0
/5
New Mexico’s nonprofit corporation law mentions the option for nonprofit corporations to incorporate for religious purposes. However, the law lacks both: (a) specific provisions to protect the right of nonprofits incorporated for religious purposes to self-government in internal affairs and (b) an option to incorporate expressly as a nonprofit religious corporation.
Standards of Conduct for Directors of Religious Organizations:
3
/5
New Mexico law permits a director, in the fulfillment of the director’s fiduciary duties, to rely on the opinion of individuals who can reasonably be assumed to have expertise on a certain matter, but does not expressly allow a director to rely on guidance from religious figures within his or her faith tradition.
Charitable Registration Law:
5
/5
New Mexico generally requires charitable solicitation registration but provides a broad, automatic exemption for religious organizations.
Audit Requirements Pursuant to Charitable Registration:
-3
/5
As a condition of maintaining authorization to fundraise in the state, New Mexico generally requires the submission of reviewed or audited financials for organizations with annual contributions of $500,000 or more.
Corporate Income Tax:
5
/5
New Mexico imposes a corporate income tax but automatically exempts organizations with federal 501(c)(3) exempt status.
Sales and Use Tax, Sales:
3
/5
New Mexico imposes a sales and use tax (in New Mexico this is called a gross receipts and compensating tax) on religious organizations’ sales but generally provides a broad and comprehensive, entity-based tax exemption for 501(c)(3) religious organizations’ sales upon application.
Sales and Use Tax, Purchases:
3
/5
New Mexico imposes a sales and use tax (in New Mexico this is called a gross receipts and compensating tax) on religious organizations’ purchases but generally provides a broad and comprehensive, entity-based tax exemption for 501(c)(3) religious organizations’ purchases upon application.
Property Tax:
3
/5
New Mexico imposes property tax but, upon application, generally provides an exemption to religious organizations for property used for religious and/or charitable purposes.
