Incentives

 New Mexico has a strong portfolio of incentives designed to encourage businesses to grow, invest and provide employment.  These incentives, together with Federal and other programs, can  be combined into a package that matches your business needs and objectives. [INSERT VIDEO Case Study: Apjet FROM Incentives and Financing page in santafebiz.org]  Incentives are generally designed for manufacturing businesses (broad definition, eg includes film), or if a company derives more than 50% of its revenues from out-of-state sales, then it qualifies as an economic-based company.

Workforce Incentives

Job Training Incentive Program

The program reimburses between 30 -40 percent of trainee wages and provides for partial reimbursement of per diem and travel expenses.

High-Wage Jobs Tax Credit

This tax credit equals 10 percent of the wages and benefits for each new economic-base job created. Qualified employers can receive the credit for up to four years. Qualifying jobs pay at least $40,000 in a municipality with a population of 40,000 or more.

Technology Jobs Tax Credit

This credit has two parts: a basic credit for research expenses and an additional credit for increased payroll expenses. Each is equal to 4 percent of the qualified expenditures on research at a qualified facility.

Child Care Tax Credit

Corporations providing or paying for licensed child care services for employees’ children under 12 years of age may deduct 30 percent of eligible expenses ( up to $30,000) from their corporate income tax liability for the taxable year in which the expenses occur. Unused credit amounts may be carried forward for three years.

Film Crew Advancement Program

This program reimburses 50% of wages for on-the-job training of NM residents in advanced below-the-line crew positions.

Job Mentorship Tax Credit

This tax credit provides for up to 50% of total wages or $12,000 for as many as 10 ‘youths participating in career preparation education programs.’

Welfare to Work Tax Credit

The credit equals 50 percent of the federal welfare-to-work credit for which the employer is eligible, up to $1,750 for the first year of employment and rising to $2,500 for the second year. The state credit piggybacks on the federal credit and can be applied to New Mexico personal or corporate income tax. Credit can be earned on the same individual for up to 2 years

Incentives for Facility, Equipment, and Expenses

Manufacturing Investment Tax Credit

Manufacturers may qualify for a tax credit equal to five percent of the value of qualified equipment imported to New Mexico.

Industrial Revenue Bonds

New Mexico communities can issue IRBs to exempt companies from property taxes on land, buildings, and equipment. Companies creating new business facilities can receive a property tax exemption for up to 20 years.

Community Development Incentive Act

Municipalities and counties may exempt a new business facility from property tax for up to 20 years. This incentive is designed to give communities a less expensive alternative to IRBs (Industrial Revenue Bonds), particularly when the project is too small to warrant the expense associated with IRBs.

Cultural Property Preservation Tax Credit

Taxpayers may take this credit on corporate or personal income tax returns for restoring, rehabilitating, or preserving properties listed on the New Mexico Register of Cultural Properties.

Federal Historic Preservation Tax Credit

This offers a maximum tax credit of 20% on the substantial rehabilitation of historic buildings. A project must be for more than $20,000.

OTHER INCENTIVEs and tax creditS

Double Weight Sales Factor

New Mexico taxes the total corporate income times the average proportion of corporate sales, payroll and property in New Mexico. The 3 factors (sales, payroll and property) have equal weight (33.3 percent each) in the formula. For a limited time (through the year 2010) manufacturers may elect to use a modified formula which gives the sales factor a 50 percent weight, reducing the other two to 25 percent apiece. The sales factor now has twice the significance of the other two, thus, the “double-weighted sales factor formula.”

New Mexico 9000

Under New Mexico 9000, businesses may obtain IS0 9000 certification on a sliding scale costing $1,000 to $6,000 (compared with $120,000 by conventional means). Also, NM 9000 process takes only one year.

High Tech Industry Incentives

Angel Investment Tax Credit

A taxpayer who files a New Mexico income tax return and who is a “qualified investor” may take a tax credit of up to $25,000 (25 percent of a qualified investment of not more than $100,000) for an investment made in a New Mexico company that is engaging in high-technology research or manufacturing. The taxpayer may claim the Angel Investment Credit for up to two qualified investments in a taxable year, provided that each investment is in a different qualified business.

Research and Development Deductions

R & D Gross Receipts Tax Deduction
Any service that is exported from the state, including research and development services are not subject to New Mexico gross receipts tax. These services must be produced by a business with a New Mexico office, sold to an out-of-state buyer and delivered and initially used out-of-state. This makes R & D a deductible transaction.

R&D Small Business Tax Credit
Qualified small businesses receive a tax credit equal to the sum of all gross receipts, compensating and withholding taxes due if at least 20% of their total

Technology Jobs Tax Credit

This credit has two parts: a basic credit for research expenses and an additional credit for increased payroll expenses. Each is equal to 4 percent of the qualified expenditures on qualified research at a qualified facility.

Web Hosting Gross Receipts Tax Deduction

Receipts from hosting world-wide web sites may be deducted from gross receipts. Hosting means storing information on computers attached to the internet.

Green Energy Incentives

Alternative Energy Product Manufacturers Tax Credit

Manufacturers of alternative energy vehicles, fuel cell systems, renewable energy systems, or any component of an advanced energy vehicle, fuel cell system, or renewable energy system, may qualify for a tax credit of five percent of the taxpayer’s qualified expenditures and may be deducted from the taxpayer’s modified combined tax liability.

Bio Fuels Production and Sales Tax Incentive

A tax credit on blended bio-diesel fuels (minimum of 2% bio-diesel).

Biomass-Related Equipment Compensating Tax Deduction

The value of biomass-related equipment may be deducted from a company’s compensating tax due.

Clean Energy Grant Program

Appropriates $3 million for grants for clean energy projects and hydrogen energy technology for municipalities and other eligible community, tribal, and state entities.

Renewable Energy Production Tax Credit

Each renewable energy generator of one megawatt or more may earn an income tax credit (personal or corporate)of $0.01 cents (avg) per kilowatt hour for the first four hundred thousand megawatt hours (=400,000,000 kws) of electricity produced for ten consecutive years beginning with the first year of production.

Solar Energy Systems Gross Receipts Tax Exemption

Power produced from solar electric and solar thermal energy systems is exempt from gross receipts tax when the generated power is used on site.

Solar Market Development Tax Credit

Augments federal tax credit by reimbursing up to 30 % of the cost of a solar PV or solar thermal system. This can be a corporate or personal tax credit.

Wind Energy Equipment Gross Receipts Tax Deduction

New Mexico provides a gross receipts tax deduction for receipts from selling wind turbines, nacelles, rotors, blades and “related equipment” to a state or federal government entity.

Sustainable Building Tax Credit

Income tax credits for building energy efficient sustainable commercial, institutional and residential buildings. Commercial and institutional buildings must be 50% more energy efficient than standard building code.

Film Industry Incentives

Film Production Tax Rebate

Tax rebate on up to 25% of production expenditures that are subject to State taxes

Filmmaker Gross receipts tax exemption

The State of New Mexico charges a gross receipts tax, or sales tax, at the point of sale. As an incentive, the state will issue Type 16 Nontaxable Transaction Certificates (NTTCs), which work much like grocery-store coupons. A certificate is presented at the point of sale and no gross receipts tax is charged.

Film Crew Advancement Program

This program reimburses 50% of wages for on-the-job training of NM residents in advanced below-the-line crew positions.

Teleservices Incentives

Telemarketing Exemptions and Deductions

Receipts for WATS (wide area telephone service) and private communication services are deducted from gross receipts tax. Receipts from selling interstate telecommunications services that originate or terminate in NM are exempt from the gross receipts tax.

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