Incentives

The following state and local incentives are generally available to economic based businesses.  Industry specific incentives can be found here by business sector or here.

Manufacturing Investment Tax Credit

New Mexico tax law provides for a credit equal to 5.125 percent of the value of qualified equipment and other property used directly and exclusively in a manufacturing operation. The credit can be applied against compensating, gross receipts tax or withholding tax due.

The credit is limited to 85 percent of the sum of the taxpayer’s gross receipts tax, compensating tax, and withholding tax due for the reporting period. Any remaining available credit may be claimed in subsequent operating periods. The credit may be claimed for equipment acquired under an IRB. This is a double benefit since no gross receipts or compensating tax was paid on the purchase or importation of the equipment.

Criteria

The credit at above levels is available until June 30, 2020. After June 30, 2020, the value of equipment available for the credit is capped at $2 million.

Alternative Energy Product Manufacturer’s Tax Credit

Provides for a credit equal to 5 percent of the value of qualified equipment and other property used directly and exclusively in a manufacturing operation that makes components or systems for alternative energy products.

Alternative Energy Product: an alternative energy vehicle, fuel cell system, renewable energy system or any component of an alternative energy vehicle, fuel cell system or renewable energy system or components for integrated gasification combined cycle coal facilities and equipment related to the sequestration of carbon from integrated gasification combined cycle plants.

The credit can be applied against compensating, gross receipts tax or withholding tax due. Any remaining credit can be carried forward for up to five years.

Criteria

Technology Jobs Tax Credit

Qualified New Mexico facilities may take a credit equal to 4 percent (8 percent in rural areas) of expenditures related to qualified research for land, buildings, equipment, computer software and upgrades, consultants, technical books and manuals, test materials, costs associated with patents, payroll, and labor. The credit may be taken against gross receipts tax, compensating tax or state payroll tax, and may be carried forward.

An additional 4 percent (8 percent total urban, 16 percent total rural) may be applied against state income tax if base payroll expenses increase by at least $75,000 per $1,000,000 of expenditures claimed. The credit may be carried forward.

Credits are not available for expenditures on buildings owned by a local government entity in conjunction with an Industrial Revenue Bond or already owned by the taxpayer or an affiliate before February 2000.

Job Training Incentive Program

One of the strongest workforce training programs in the nation, this highly flexible program funds classroom and on-the-job training for newly created qualifying jobs in qualifying expanding or relocating businesses for up to six months. The state will reimburse up to 40 percent of trainees’ wages for companies located in urban areas and up to 65 percent for companies located in rural areas. Customized training may be provided by post-secondary educational institutions, company trainers, or outside trainers. Companies must be a new or expanding company in NM that manufactures/produces a product or a non-retail company that generates more than 50% of its service revenue from outside the state. Eligible employees must be NM residents for at least  one year during their lifetime.

Industrial Revenue Bonds

Significant real and personal property tax and compensating tax exemptions can occur through the use of an Industrial Revenue Bond (IRB). The amount of property tax exemption and term of bond is determined by each community.

An IRB is a loan from the bond purchaser to a company where the loan proceeds and repayment flows through a governmental issuer. Instead of purchasing a facility directly, companies can enter into a lease with the issuer, provided the company will lease the facility from the issuer and at end of the lease, purchase the facility from the issuer for a nominal amount.

High Wage Jobs Tax Credit

Provides businesses with a tax credit equal to 10 percent of the combined value of salaries and benefits for each net new job paying a net taxable wage of at least $40,000 per year in the Albuquerque metropolitan area and other communities larger than 40,000 in population. Companies located in communities with a population less than 40,000 are eligible for the same tax credit for each net new job paying a net taxable wage of at least $28,000.

Qualified employers can take the credit for four years. The refundable credit can be applied against the modified combined tax liability of the taxpayer, including the state portion of the gross receipts tax, compensating tax and withholding tax. Excludes the local portion of the gross receipts tax. Employees must be hired prior to July 1, 2015. 

Rural Jobs Tax Credit

Allows for a 6.25% credit on the first $16,000 of wages paid for a qualifying job in a rural area. Credit can be taken for 4 years in a Tier 1 community (population 15,000 or less) or 2 years in a Tier 2 community (population 15,000 – 30,000). Credit can be taken against the state portion of the gross receipts tax, compensating tax, withholding tax, or corporate income tax. The credit can be carried forward for 3 years or sold. Eligible employers are those who have been approved for the Job Training Incentive Program.

New Mexico Refundable Film Production Tax Credit

The state offers a 25 percent refundable tax credit on all direct production and post-production expenditures, including New Mexico crew, that are subject to taxation by the State of New Mexico. Eligible productions include feature films, independent films, television, national and regional commercials, video games, animation, webisodes, documentaries, and post-production (including "stand-alone" post production). There is no minimum expense requirement and no minimum shoot day requirement. There is a $50M rolling cap.

To learn more, visit New Mexico Film Office (http://www.nmfilm.com/)