A bill perennially left for dead cleared the Senate for the first time Monday, cheering some supporters who hope to force some out-of-state corporations to pay more in state taxes.

But Senate Bill 9, sponsored by Democratic Sen. Peter Wirth of Santa Fe, faces an uncertain future as it heads to the House of Representatives and as Gov. Susana Martinez continues to threaten to veto the legislation if it reaches her desk.

With 28 Democrats favoring and 13 Republicans opposing, Wirth's legislation passed the Senate floor Monday on a party-line vote after more than an hour of debate.

The bill's passage handed Wirth a victory of sorts following his quest to pass similar legislation in each of the past eight regular legislative sessions without as much success.

This time around, the bill's chances were aided by an amendment added over the weekend by the Senate Finance Committee that limited the measure and made it more palatable to some Democratic senators.

"Is it our job to look after out-of-state corporations? This bill is a victory for them," Sen. Eric Griego, D-Albuquerque, said on the Senate floor as he unsuccessfully tried to change Wirth's bill back to the original form that included all corporations.

For eight years, Wirth has sought to amend the tax code to make all corporations, out-of-state and in-state, file corporate income-tax returns the same way.

Currently, out-of-state corporations have a choice. They can either file a combined report that separates out how much profit was earned in New Mexico 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.

Wirth's original bill would have required all out-of-state corporations to file returns like their in-state counterparts. But the bill that passed the Senate on Monday would require only out-of-state big-box retailers with stores 30,000 square feet or larger to file returns the same way as their in-state counterparts, meaning many out-of-state corporations would be exempted from that rule.

The bill that passed also would lower New Mexico's corporate income tax to 7.5 percent from 7.6 percent. That is a significantly smaller drop in the overall tax rate than what was proposed in Wirth's original bill. The original legislation would have lowered the tax rate to 7.0 percent.

"Sen. Griego is right," Wirth said of the compromise SB 9 he presented on the Senate floor Monday. "It's a baby step. But it's a very important step."

The debate over the bill's pros and cons followed familiar terrain Monday, as it has throughout the 2012 legislative session.

Opponents, including lobbyists for several large U.S. and multinational corporations, have said at various hearings during the session that the bill's passage likely would lead to layoffs at companies hit by the new law. The Martinez administration, meanwhile, has argued it would make New Mexico less competitive in attracting out-of-state private-sector jobs.

But Wirth and supporters of the legislation have argued that requiring out-of-state corporations to file taxes the same way as in-state companies would not only capture new tax revenue and lead to lower taxes for many corporations, but also would require out-of-state corporations to play by the same rules as New Mexico corporations.

Gov. Susana Martinez has repeatedly said she would veto the legislation if it made it to her desk, a message her office repeated Monday.

"The Governor is working to make New Mexico more competitive so that we can create jobs -- not less competitive, as would be the case under the legislation," Martinez's spokesman, Scott Darnell, wrote in an email. "It will kill jobs in New Mexico and may even reduce state revenues. So, no, she wouldn't sign the legislation."

The politics in the House are more volatile than in the Senate, where Democrats hold a 28-14 advantage over Republicans.

Democrats hold a a 36-33 majority in the House, and one lawmaker identifies as an independent.

"I would guess the overwhelming majority of my caucus supports this," House Majority Leader Ken Martinez, D-Grants, said Monday of his fellow House Democrats.

But the legislation likely would be doomed if one or two Democrats peeled off to oppose the legislation.

Wirth didn't know Monday who would carry his legislation on the House side, he said.

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