The county fears the loss of GRT if the Los Alamos laboratory gets the status of non-profit organization


By Rebecca Moss
The new mexican

Los Alamos County officials fear that a flow of tax revenue from the Los Alamos National Laboratory – tens of millions of dollars a year – will dry up in the coming months if the new entrepreneur in Los Alamos Laboratory management gets the status of the nonprofit organization of the IRS.

Under current state legislation, the 501 (c) (3) statute would exempt the lab from the tax and the state and county would lose revenue for essential services, including the services of the state. Fire, road infrastructure, public transit system, schools and utilities. for low-income residents.

Los Alamos National Security LLC, a former laboratory subcontractor, was a for-profit corporation; During his 12 years of leadership, he paid the gross revenue tax of 7.3125% in the county, as did all other for-profit businesses.

Compared to other companies in Los Alamos County, however, the lab has a disproportionate impact. Its annual multibillion dollar budget brings the state about $ 50 million in taxes each year, of which $ 20 million goes to Los Alamos County.

That's about 40 percent of the county's total general funds, said county director Harry Burgess.

On November 1, a new company, Triad National Security LLC, took over operations in Los Alamos. Each of its three partners – the University of California, the Battelle Memorial Institute and the A & M University System of the University of Texas – is a non-profit organization.

Triad pays taxes on gross revenues since the beginning of its activities at the lab, "based on a New Mexico ruling [Taxation and Revenue Department], "said Matt Nerzig, a spokesman for the lab and Triad.

But Burgess now fears that the company plans to file a nonprofit status application.

In fact, it was only in 2006, when the laboratory was taken over by Los Alamos National Security, that the county started collecting taxes on gross receipts. Before LANS, the university was run by the University of California.

"We have always been a city with a horse," Burgess said. "We are essentially a bedroom community for the lab and, as such, we provide services largely to those who are employed by the lab."

Operating these services without tax revenues from the lab would be difficult, he said.

According to Burgess, the laboratory's taxes cover the $ 5 million annual budget allocated to a fire department trained to deal with emergency situations specific to the laboratory's operations. Firefighters have recently increased by 15 people, he said.

The road and water infrastructure built by the federal government for the Manhattan project is deteriorating and needs to be replaced, he added. Some of the tax money is earmarked for grants to schools, airport operations and economic development.

Senator Carlos Cisneros, of D-Questa, said the loss of tax revenue would also be felt by the state over time, especially years without an oil boom.

Cisneros is one of the co-sponsors of a bill introduced in the 2019 legislative session that aims to amend the New Mexico Tax Code to prevent tax exemptions on gross revenues. awarded to major entrepreneurs trained to operate one of the state's national laboratories.

"We are counting on this funding for education and government services," said Cisneros.

If oil and gas go south, it takes a part of the budget and we are back in recession mode, "he said. "So, that extra $ 30 million from the national lab is just as crucial for the state of New Mexico as it is for the local government."

Nerzig did not answer the question of whether Triad was considering applying for tax exemption.

The National Nuclear Security Administration, which oversees the laboratory, also did not respond to questions asked on Friday.

If Triad obtains the 501 (c) (3) status, Los Alamos County will have to refund the taxes already collected from the company.

"It's a very difficult thing for a municipality," said Los Alamos County Councilor David Izraelevitz.

Like Burgess, Izraelevitz worries for the future of the tax revenues of the laboratory.

"At this point, we are essentially going from one month to the next," he said, "until we hear no confirmation from them as to whether or not know whether they will apply or not. "