taxpayer's income from business activity is taxable without this state if such taxpayer, by reason of such business activity, is taxable in another state within the meaning of Section 7-4-4 NMSA 1978. A taxpayer is taxable within another state if it meets either one of two tests:

1. A. if by reason of business activity in another state the taxpayer is subject to one of the types of taxes specified in Subsection A of Section 7-4-4 NMSA 1978, namely: a net income tax, a franchise tax measured by net income, a franchise tax for the privilege of doing business or a corporate stock tax; or

2. B. if by reason of such business activity another state has jurisdiction to subject the taxpayer to a net income tax, regardless of whether or not the state imposes such a tax on a taxpayer.

   [1/15/1974, 9/15/1988, 9/20/1993, 1/15/1997; 3.5.4.8 NMAC - Rn & A, 3 NMAC 5.4.8, 6/29/2001]