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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 to meet your business needs and objectives. Contact the Santa Fe Office of Business Growth at 505-955-6092 or [bot protected email address]  for more information on incentives available to your particular business. 

 

  WORKFORCE INCENTIVES

Job Training Incentive Program (JTIP)

https://gonm.biz/business-development/edd-programs-for-business/job-training-incentive-program 

The Job Training Incentive Program (JTIP) funds classroom and on-the-job training for newly-created jobs in expanding or relocating businesses for up to 6 months. The program reimburses 50-75% of employee wages. Custom training at a New Mexico public educational institution may also be reimbursed. Eligibility for JTIP funds depends on the company’s business, the role of the newly-created jobs in that business, and the trainees themselves. Businesses eligible for consideration include companies that manufacture or produce a product in New Mexico, non-retail service companies that export a substantial percentage of services out of state (50% or more of revenues and/or customer base), and certain green industries. The company must be financially sound and must be creating new jobs as a result of expansion or relocation to the state of New Mexico.

Contact: Patrick Gannon, JTIP Program Manager, 505.827.2162, [bot protected email address]


High-Wage Jobs Tax Credit

https://gonm.biz/why-new-mexico/competitive-business-climate/incentives/high-wage-jobs-tax-credit 

Administered by the NM Taxation & Revenue Department, a taxpayer who is an eligible employer may apply for and receive a tax credit for each new high-wage economic-base job. The credit amount equals 8.5% of the wages and benefits paid for each new economic-base job created, up to $12,750 per job. Qualified jobs are those which pay at least $40,000/year in a community with a population of less than 60,000, those that pay at least $60,000/year in a community with a population of 60,000 or more, and are occupied for at least 44 weeks by the employee. Qualified employers can take the credit for 4 years. The credit may only be claimed for up to 1 year after the end of the 3 qualifying periods. The credit can be applied to the state portion of the gross receipts tax, compensating tax, and withholding tax. Any excess credit will be refunded to the taxpayer. The credit shall not exceed $12,750 per year, per job. Qualifying employees must be residents of New Mexico and cannot be a relative of the employer or own more than 50% of the company and cannot own, directly or indirectly, 50% in value of outstanding stock.

Contact: For the status of an application or to contact an auditor, call 505.795.1735 or send an email to [bot protected email address]


Technology Jobs Tax Credit

http://realfile.tax.newmexico.gov/FYI-106%20-%20Claiming%20Business-Related%20Tax%20Credits%20for%20Individuals%20and%20Businesses.pdf (see page 32)

A taxpayer who conducts qualified research and development at a facility in New Mexico – except at a facility operated for the U.S. government – may claim a basic credit equal to 4% of qualified expenditures. The 4% credit doubles when the qualified facility is in a rural area. A taxpayer may qualify for an additional 4% credit toward income tax liability by raising its in-state payroll $75,000 for every $1 million in qualified expenditures claimed. The minimum is $75,000. This credit also doubles if the qualified facility is in a rural area.

Contact: For the status of the credit application call: 505.383.0184 or 505.383.0171


Corporate-Supported Child Care

http://realfile.tax.newmexico.gov/FYI-106%20-%20Claiming%20Business-Related%20Tax%20Credits%20for%20Individuals%20and%20Businesses.pdf (see page 13)

Corporations providing or paying for licensed child care services for employees’ children under 12 years of age may deduct 30% of eligible expenses (up to $30,000) from their corporate income tax liability for the taxable year in which the expenses occur. If the credit claimed the first eligible year exceeds the taxpayer’s liability, the excess may be carried forward for up to 3 years. If the claimant will have a carry forward amount remaining they must keep a personal record of the credit used and submit that information for each of the following years the credit is claimed. The total amount claimed can never be more than the total amount of the credit originally awarded.

Contact: For assistance claiming the credit, contact 505.827.0825 in Santa Fe, or call toll free 866.809.2335, select option 4.


Job Mentorship Tax Credit

http://www.tax.newmexico.gov/Tax-Professionals/employment-enhancement-tax-credits.aspx

The job mentorship tax credit gives either a corporate or personal income tax credit to businesses hiring qualified students in a school-sanctioned, career-preparation education program. Qualifying businesses must employ students attending an accredited New Mexico secondary school full time. Credits are for 50% of the gross wages paid, subject to limitations. No business may claim more than ten students or $12,000 in any tax year, nor may any student displace a current employee. The credit cannot be allowed for more than 50% of gross wages paid on the first 320 hours of employment for each qualified student; and a credit cannot be allowed for more than three taxable years. Excess job mentorship tax credit may be carried forward from prior years. The credit can be claimed by one or more owners, partners or associates.

Contact: For assistance call 505.827.0792


Work Opportunity Tax Credit (WOTC)

https://www.dws.state.nm.us/en-us/WOTC

The Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers who hire individuals from eligible target groups with significant barriers to employment. These target groups are veterans, temporary assistance for needy families (TANF) recipients, supplemental nutrition assistance program (SNAP) recipients, designated community residents, vocational rehabilitation referral, ex-felons, supplemental security income (SSI) recipients, summer youth employees, and long-term unemployment recipients. The tax credit is designed to help job seekers gain on-the-job experience, move towards economic self-sufficiency, and help reduce employer's federal tax liability. Forms must be submitted within 28 calendar days of the employee's start date. The NMDWS WOTC Unit encourages online applications. Employers can earn a tax credit of between $1,200 and $9,600 per employee, depending on the target group of the new employee and the number of hours worked in the first year. Employees must work at least 120 hours in the first year of employment to receive the tax credit. Visit the DWS website listed above for the current maximum tax credit for each WOTC target group. See the brochure here

Contact: Juan Diaz, State WOTC Coordinator, 505.841.8444


Rural Jobs Tax Credit

https://gonm.biz/why-new-mexico/competitive-business-climate/incentives/rural-jobs-tax-credit 

This credit can be applied to taxes due on (state) gross receipts, corporate income, or personal income tax. Rural New Mexico is defined as any part of the state other than Los Alamos County; certain municipalities: Albuquerque, Rio Rancho, Farmington, Las Cruces, Roswell, and Santa Fe; and a 10-mile zone around those select municipalities. Company eligibility includes companies that manufacture or produce a product in New Mexico, non-retail service companies that export a substantial percentage of services out of state (50% or more revenues and/or customer base), and certain green industries. The rural area is divided into 2 tiers: Tier 2 represents non-metro area municipalities that exceed 15,000 in population and the maximum tax credit is 12.5% of the first $16,000 in wages paid for the qualifying job (may be taken at $1,000 per year for 2 years); Tier 1 represents everywhere else in a rural area and the maximum tax credit is 25% of the first $16,000 in wages paid for the qualifying job (may be taken at $1,000 per year for 4 years). A qualifying job is a job filled by an eligible employee for 48 weeks in a 12-month qualifying period. The credit may be carried forward for up to 3 years.

Contact: For the status of the credit application call 505.383.0184 or 505.383.0171


Foster Youth Employment Tax Credit

http://realfile.tax.newmexico.gov/rpd-41389.pdf 

A taxpayer that employs a qualified foster youth in New Mexico is eligible for a credit against the taxpayer’s liability in an amount up to $1,000 of the gross wages paid to each qualified foster youth by the taxpayer during the taxable year for which the return is filed. If the taxpayer employs a qualified foster youth for less than a full taxable year, the taxpayer is eligible for a credit amount equal to $1,000 multiplied by the fraction of a full year for which the qualified foster youth was employed. The taxpayer may not claim the foster youth employment income tax credit for any individual foster youth for more than one calendar year from the date of hire. The qualified youth will have to contact the Children, Youth, and Families Department’s Youth Services Bureau at 505-827-8400 or the other agency that they were in legal custody of. That government agency, department, or bureau will have to send a letter to the qualified youth that includes their name, date of birth, and the years that they were in that agency's custody.

Contact: Taxation & Revenue Department 505.827.0792, [bot protected email address]

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  FACILITY, EQUIPMENT & EXPENSES INCENTIVES

Investment Tax Credit

https://gonm.biz/why-new-mexico/competitive-business-climate/incentives/investment-tax-credit-for-manufacturers 

Manufacturers may take a credit against gross receipts, compensating or withholding taxes equal to 5.125% of the value of qualified equipment when the following employment conditions are met: 1) For every $500,000 of equipment, 1 employee must be added up to $30 million; and 2) For amounts exceeding $30 million, 1 employee must be added for each $1 million of equipment. The credit may (also) be claimed for equipment acquired under an IRB (Industrial Revenue Bond). This is a double benefit because no gross receipts or compensating tax was paid on the purchase or importation of the equipment. 

Contact: For the status of the credit application call 505.383.0184 or 505.383.0171


Industrial Revenue Bonds (IRBs)

New Mexico communities can issue IRBs to exempt companies from property taxes on land, buildings, and equipment. An IRB is an issuance of bonds by the City for a City-owned Qualifying Project and then a loan of the proceeds from the bond purchasers to a company, non-profit corporation, private higher educational institution or hospital ("Qualifying Entity" or QIE) where the bond proceeds and bond repayments flow through a local governmental "issuer" such as the City. Typically, the Qualifying Entity enters into a lease agreement with the City/Issuer to lease the facility from the City/Issuer and, at the end of the lease term, purchase the facility from the City/Issuer for a nominal amount. 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.


Preservation of Cultural Property Tax Credit

http://www.nmhistoricpreservation.org/programs/tax-credits.html 

The credit for preservation of cultural property is 50% of the approved eligible costs of a project for the restoration, rehabilitation or preservation of cultural properties listed on the official New Mexico Register of Cultural Properties, not to exceed $25,000. Any portion of the credit that remains unused at the end of the taxpayer's reporting period may be carried forward for four consecutive years. A taxpayer who files a New Mexico personal income tax return and who is not a dependent of another individual and who is the owner of the cultural property may claim the credit. A member/owner of a partnership, LLC, S corporation, joint venture or similar business association that has qualified for the preservation of cultural properties credit may claim the credit in proportion to the taxpayer's interest in the business association. To apply, the applicant must contact the Historic Preservation Division for information on obtaining certification for the project, and the State Coordination of New Mexico Arts and Cultural Districts, for more information regarding property located in an arts and cultural district certified by the state or a municipality pursuant to the Arts and Cultural District Act.

Contact: Rich Williams, State Coordinator of New Mexico Arts and Cultural Districts, 505.827.0168, [bot protected email address] and Harvey Kaplan, Department of Cultural Affairs’ Historic Preservation Division, Tax Credits & Architectural Review, 505.827.3971, [bot protected email address]


Federal Historic Preservation Tax Credit

https://www.nps.gov/tps/tax-incentives.htm

The Federal Historic Preservation Tax Incentives program encourages private sector investment in the rehabilitation and re-use of historic buildings. The National Park Service and the Internal Revenue Service administer the program in partnership with State Historic Preservation Offices. A 20% income tax credit is available for the rehabilitation of historic, income-producing buildings that are determined by the Secretary of the Interior, through the National Park Service (NPS), to be “certified historic structures.” The State Historic Preservation Offices and the National Park Service review the rehabilitation work to ensure that it complies with the Secretary’s Standards for Rehabilitation. The Internal Revenue Service defines qualified rehabilitation expenses on which the credit may be taken. Owner-occupied residential properties do not qualify for the federal rehabilitation tax credit. 

Contact: Harvey Kaplan, Department of Cultural Affairs’ Historic Preservation Division, Tax Credits & Architectural Review, 505.827.3971, [bot protected email address] and NPS’ Preservation Tax Incentives, 202.513.7270, [bot protected email address]


Consumables Gross Receipts Tax Deduction for Manufacturers

https://gonm.biz/why-new-mexico/competitive-business-climate/incentives/consumables-gross-receipts-tax-deduction-for-manufacturers

A seller may deduct receipts from sales to a manufacturer of tangible personal property that becomes an ingredient or component part of a manufactured product. For the purposes of this deduction, “consumable” is defined as tangible personal property that is incorporated into, destroyed, depleted, or transformed in the process of manufacturing a product, including electricity, fuels, water, manufacturing aids and supplies, chemicals, gases, repair parts, spares, and other tangibles used to manufacture a product.

Contact: Santa Fe Taxation & Revenue Department, 505.827.0951 

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  RESEARCH & DEVELOPMENT DEDUCTIONS

Tax Paid To Another State – Product Of Research And Development Service Tax Credit

http://realfile.tax.newmexico.gov/FYI-105%20-%20Gross%20Receipts%20and%20Compensating%20Taxes%20-%20An%20Overview.pdf (see bottom of page 35)

When a taxpayer pays gross receipts, sales or similar tax in another state, or political subdivision of that state, on the product of research and development services performed outside New Mexico but initially used in New Mexico a credit against gross receipts tax can be claimed. This credit can only be claimed for receipts after July 1, 1989, and the amount of the credit can not exceed 5.125% multiplied by the amount subject to by both New Mexico and the other state or political subdivision of that state.

Contact: Santa Fe Taxation & Revenue Department, 505.827.0951 or 866.809.2335


Technology Jobs and Research and Development Tax Credit

https://gonm.biz/why-new-mexico/competitive-business-climate/incentives/technology-jobs-tax-credit 

Administered by NM Taxation & Revenue Department (see page 33), the purpose of the credit is to provide a favorable tax climate for technology-based businesses engaging in research, development and experimentation and to promote increased employment and higher wages in those fields in New Mexico. A taxpayer conducting qualified research at a qualified facility and making qualified expenditures of no more than $5 million in New Mexico is eligible to claim the basic technology jobs and research and development tax credit of 5% against the taxpayer’s compensating tax, withholding tax or gross receipts tax, excluding local option gross receipts tax. The tax credit will double to 10% for expenditures in facilities located in rural New Mexico. The approved basic credit may be carried forward for a period of up to three years. That same taxpayer may apply for an additional tax credit of 5% against the taxpayer’s income tax or corporate income tax liability. The credit will double to 10% for taxpayers located in rural New Mexico. To qualify for the additional credit the taxpayer must increase the annual payroll expense $75,000 for every $1 million in qualified expenditures claimed. For a qualified research and development small business, which is defined as having no more than 50 employees, they too, can claim the basic credit and the same rules apply to them.

Contact: For the status of the credit application call: 505.383.0184 or 505.383.0171


Web Hosting Gross Receipts Tax Deduction

https://gonm.biz/why-new-mexico/competitive-business-climate/incentives/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.

Contact: Santa Fe Taxation & Revenue Department, 505.827.0951


Rural Software Development Gross Receipts Tax Deduction

https://gonm.biz/why-new-mexico/competitive-business-climate/incentives/rural-software-development-gross-receipts-tax-deduction 

Receipts from the sale of software development services may be deducted from gross receipts tax when the service is performed in a rural area. Software development services include custom software design and development and web site design and development, but does not include software implementation or support services. A rural area is defined as any not within the municipal boundaries of the cities of Albuquerque, Las Cruces, Rio Rancho and Santa Fe are not eligible for this deduction. 

Contact: Santa Fe Taxation & Revenue Department, 505.827.0951 

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  GREEN ENERGY INCENTIVES

Alternative Energy Product Manufacturers Tax Credit

Manufacturers of certain alternative energy products may receive a tax credit not to exceed 5% of qualified expenditures for purchase of manufacturing equipment used in the manufacturing operation. This credit is designed to stimulate the development of new alternative energy manufacturing facilities. To be eligible to claim a credit, the taxpayer must employ personnel to perform production tasks in conjunction with manufacturing equipment not previously existing at the site. Additionally, the manufacturer must employ at least one new full-time employee in addition to the number of full-time employees employed one year prior to the day on which the taxpayer applies for the credit. The manufacturer must be approved prior to claiming any tax credit.

Contact: For assistance, call 505.383.0184 or 505.383.0171


Biodiesel Blending Facility Tax Credit

https://gonm.biz/why-new-mexico/competitive-business-climate/incentives/biodiesel-blending-facility-tax-credit 

An operator of a refinery in New Mexico, any person who blends special fuel in New Mexico, or the owner of special fuel stored at a pipeline terminal in New Mexico, who installs biodiesel blending equipment for the purpose of establishing or expanding in a facility to produce blended biodiesel fuel is eligible to claim a credit against gross receipts tax or compensating tax. A certificate of eligibility must be first obtained from the Energy, Minerals, and Natural Resources Department (EMNRD) to apply for this credit. The credit is equal to 30% of the purchase cost of the equipment plus 30% of the cost of installing that equipment. The credit cannot exceed $50,000 with respect to equipment installed at any one facility. The credit may be applied against the taxpayer’s gross receipts tax liability or compensating tax liability. The credit may be carried forward for 4 years from the date of the certificate of eligibility 

Contact: EMNRD, 505.476.3315 and TRD, 505.476.3683


Biomass-Related Equipment & Materials Deduction

The value of equipment such as a boiler, turbine-generator, storage facility, feedstock processor, interconnection transformer, or biomass material used for bio-power, bio-fuels, or bio-based products may be deducted in computing the compensating tax due.

Contact: Santa Fe Taxation & Revenue Department, 505.827.0951


Renewable Energy Production Tax Credit

https://gonm.biz/why-new-mexico/competitive-business-climate/incentives/renewable-energy-production-tax-credit

A corporate or personal taxpayer who owns a qualified energy generator is eligible for a tax credit in an amount equal to 1 cent per kilowatt hour of electricity produced by the qualified energy generator using a qualified energy resource in the tax year. A variable rate of credit is added for electricity produced using solar energy. The rate starts at 1.5 cents in the 1st year of operation and increases in increments of .5 cent each of the next 5 years, to a maximum of 4 cents, and then will decline by .5 cent per year in the next 4 years to 2 cents in the 10th year of operation. The 1 cent per kilowatt hour rate applies for all other qualified energy generation facilities. The facility must generate a minimum of 1 megawatt. The total amount of electricity that can qualify for the corporate and individual income tax credits is 2 million megawatts for wind and biomass with an additional 500,000 megawatt hours allowed for solar-generated power.

Contact: Cherise Urioste, New Mexico Energy, Minerals and Natural Resources Department, 505.476.3251, [bot protected email address] or New Mexico Taxation and Revenue Department, 505.827.0792


Solar Energy Systems Gross Receipts Tax Deduction

http://realfile.tax.newmexico.gov/FYI-105%20-%20Gross%20Receipts%20and%20Compensating%20Taxes%20-%20An%20Overview.pdf (see page 28)

A deduction from gross receipts tax is available for the sale and installation of a solar energy system. “Solar energy system” means an installation that is used to provide space heat, hot water or electricity to the property in which it is installed and is an installation that utilizes solar panels that are not also windows, a dark-colored water tank exposed to sunlight, or a non-vented trombe wall. Solar energy system includes components or systems for collecting and/or storing energy, but does not include components or systems related to the use of the energy. Construction contractors who intend to take the solar energy systems deduction should not execute a Type 6 NTTC for the purchase of the solar energy system.

Contact: Santa Fe Taxation & Revenue Department, 505.827.0951


New Solar Market Development Tax Credit

http://www.emnrd.state.nm.us/ECMD/CleanEnergyTaxIncentives/SolarTaxCredit.html 

Provides a 10% tax credit with a value up to $6,000 for a solar system. Taxpayers who purchase and install a solar thermal or photovoltaic system on or after March 1, 2020 are eligible for this non-refundable tax credit. Applications will be accepted by the New Mexico Energy, Minerals and Natural Resources Department (ECMD) office starting July 1, 2020. 

Contact: Mark Gaiser, ECMD Clean Energy Program Manager, 505.476.3318, [bot protected email address]


Gross Receipts Tax Exemption for Wind and Solar Systems to Government Entities

http://www.emnrd.state.nm.us/ECMD/CleanEnergyTaxIncentives/GRTExemptionGov.html 

Receipts associated with the sale of certain wind turbine equipment to federal, state or local government entities are exempt from being added to gross receipts. Senate Bill 201, signed in March 2010, extended this exemption to solar thermal electric and photovoltaic systems sold to a government on or after July 1, 2010. 

Contact: Harold Trujillo, ECMD Energy Technology and Engineering Bureau Chief, 505.476.3372, [bot protected email address]


New Sustainable Building Tax Credit

http://www.emnrd.state.nm.us/ECMD/CleanEnergyTaxIncentives/SBTC.html 

A taxpayer may apply for this tax credit for investments in constructing or renovating sustainable residential or commercial buildings that meet specific “green” building standards. The new sustainable building tax credit is also available for the permanent installation of manufactured housing, regardless of where the housing is manufactured. The tax credit can be claimed by the owner of the building at the time it is certified as a sustainable building or by a subsequent owner, if no credit has already been claimed. The rate of the credit ranges from $0.30 up to $6.50 per square foot and varies with the type of building, the total qualified occupied square footage of the building and the degree of energy efficiency incorporated in the building.

Contact: Harold Trujillo, ECMD Energy Technology and Engineering Bureau Chief, 505.476.3372, [bot protected email address] or TRD,  505.827.0792


Advanced Energy Tax Credit

Receipts from selling or leasing tangible personal property or services that are eligible generation plant costs to a person that holds an interest in a qualified generating facility are deductible from gross receipts and compensating tax. In addition, a taxpayer who holds an interest in a qualified generating facility in New Mexico that files a corporate income tax return may claim a credit for 6% of the eligible generation plant costs of a qualified facility. The aggregate amount of tax credit that may be claimed with respect to a qualified generating facility is limited to $60,000,000. A qualified generating facility or an interest owner, on behalf of the qualified generating facility, must apply for a certificate of eligibility from the New Mexico Environment Department (NMED) before applying to obtain approval to claim the advanced energy tax credit. 

Contact: NMED, 505.476.4339 and Taxation and Revenue Department, 505.383.0184 or 505.383.0171 

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  FILM INDUSTRY INCENTIVES

Film Production Tax Credit

https://gonm.biz/why-new-mexico/competitive-business-climate/incentives/film-post-production-services-25-refundable-tax-credit 

The Film Production Tax Credit applies to post production expenditures which are directly attributable to the production of a commercial film or audiovisual product. The services must be performed in New Mexico. Eligible expenditures include editing, Foley recording, automatic dialogue replacement, sound editing, special effects, including computer-generated imagery or other effects, scoring and music editing, beginning and end credits, negative cutting, soundtrack production, dubbing, subtitling or addition or sound or visual effects. For additional information, visit the New Mexico Film Office.

Contact: NM Film Office, Economic Development Department, 505.476.5600, [bot protected email address]


Filmmaker Gross Receipts Tax Deduction (Sale To)

http://realfile.tax.newmexico.gov/FYI-105%20-%20Gross%20Receipts%20and%20Compensating%20Taxes%20-%20An%20Overview.pdf (see page 19)

Receipts from selling or leasing property and from performing services that qualify as production costs of qualified production companies can receive a deduction. The buyer must submit proof of registration as a qualified production company with the New Mexico Film Office of the Economic Development Department. NTTC Requirement: Type 16. This deduction is not available to film production companies taking the Film Production Tax Credit listed above. 

Contact: NM Film Office, Economic Development Department, 505.476.5600, [bot protected email address]


Film Lease Gross Receipts Tax Deduction

http://realfile.tax.newmexico.gov/FYI-105%20-%20Gross%20Receipts%20and%20Compensating%20Taxes%20-%20An%20Overview.pdf (see page 19)

Deduction to receipts from leasing theatrical and television films and tapes to movie theaters or similar facilities when the theater's receipts are subject to gross receipts tax.

Contact: NM Film Office, Economic Development Department, 505.476.5600, [bot protected email address]


Film Crew Advancement Program (FCAP)

https://nmfilm.com/film-crew-advancement-program-fcap/ 

This on-the-job training program focuses on NM residents working in primarily technical industry positions. This program serves as an incentive for participating companies to provide job opportunities to New Mexico residents who are ready to move up within their department or are adding a new skill set. The FCAP program provides a 50% reimbursement of the qualifying participants’ wages for up to 1040 hours physically worked by the crew member. Companies are approved by the Chair of the JTIP Board.

Contact: Rochelle Bussey, Sr. Manager of Operations and Workforce Development Programs, 505.476.5604, [bot protected email address]

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  OTHER INCENTIVES AND TAX CREDITS

Angel Investment Tax Credit

https://gonm.biz/why-new-mexico/competitive-business-climate/incentives/angel-investment-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. The taxpayer may claim the angel investment credit for one qualified investment per investment round. Any portion of the tax credit remaining unused at the end of the taxpayer’s taxable year may be carried forward for five consecutive years.

Contact: Angel Investment Tax Credit Program, 505.827.0300, [bot protected email address]


Double Weight Sales Factor

http://www.tax.newmexico.gov/uploads/files/Reports/2013%20Tax%20Expenditure%20Report%20TRD%202013-11-12%20final.pdf (see page 32 under “Manufacturing Income Apportionment”)

A taxpayer whose principal business activity is manufacturing may elect to have business income apportioned to New Mexico by multiplying the income by a “double-weighted sales” fraction, the numerator of which is the property factor plus the payroll factor plus twice the sales factor, and the denominator of which is four. The tax expenditure provides an optional, alternative method of income apportionment for manufacturers when calculating New Mexico corporate income tax liability. All other taxpayers are required to use a three-factor apportionment formula in which payroll, property, and sales are equally weighted. By increasing the weight of the sales factor, this policy also has the effect of promoting an export-based manufacturing industry because exported sales reduce the share of income apportioned to this state. 

Contact: Santa Fe Taxation & Revenue Department, 505.827.0951


New Mexico 9000

https://gonm.biz/business-development/edd-programs-for-business/iso-9001-training-preparation

The New Mexico Economic Development Department, in partnership with the New Mexico Manufacturing Extension Partnership (NM MEP), provides the tools and knowledge for ISO 9001:15 registration through the NM 9000 Certification Training program. New Mexico 9000 Certification Training provides new and expanding industries the tools and training to become more competitive. Training is delivered by NM MEP and funded through the JTIP Enhanced Skills Training Program, Step Up for up to two participants per company. NM MEP provides training on Quality Management Systems, which may include ISO9001: 15; ISO13485:08 AS9100:08; AS9120:09; and AS9101:201. Companies that need to maintain ISO Certification and/or registration, or those seeking certification in ISO Standards for the first time may be eligible to participate. Training is delivered by Certified ISO Experts at NM MEP at a minimal out-of-pocket expense to the company. Participating companies must demonstrate an in-kind match of at least 25% of the project’s reimbursable costs. Costs associated with obtaining, maintaining, and renewing ISO registration are tax deductible. The cost of the New Mexico 9000 training classes is based on annual company sales revenue, ranging from $550 to $3,300 for the training.

Contact: Sara Gutiérrez, 505.827.0249, [bot protected email address] or Claudia Serrano, 505.314.9131, [bot protected email address]


Beer and Wine Producers Preferential Tax Rate

https://gonm.biz/why-new-mexico/competitive-business-climate/incentives/beer-and-wine-producers-preferential-tax-rate 

Microbreweries producing less than 5,000 barrels of beer annually and small wineries producing less than 560,000 liters of wine per year qualify for a preferential tax rate. The Liquor Excise Tax Act imposes taxes on beer, wine, and spirituous liquors. The basic tax rate for wine is 45 cents per liter. Wine produced by a small vintner carries a tax of 10 cents per liter on the first 80,000 liters and 20 cents on production over that level up to 560,000 liters. The basic tax rate for beer produced by a brewery is 41 cents; beer produced by a microbrewery (producing less than 5,000 barrels annually) is taxed at 8 cents per gallon.

Contact: Santa Fe Taxation & Revenue Department, 505.827.0951 or 866.809.2335


Small Business Saturday Gross Receipts Tax Holiday

http://www.tax.newmexico.gov/small-business-saturday.aspx 

This deduction is currently for receipts that fall on small business Saturday for starting calendar year 2018 until year 2020 (see page 27).  For this one day, the state suspends collection of gross receipts tax on sales of qualifying items at certain small businesses. The tax holiday begins at 12:01 a.m. and concludes at midnight of Small Business Saturday. During that time the law provides a deduction from gross receipts for retail sales of qualifying tangible personal property; in effect allowing the retailer to sell the items “tax free.” The sales price of the property must be less than $500. Types of items that qualify are clothing, accessories, sporting goods, tools, books, art, cosmetics, musical instruments, cookware, bedding, furniture, toys, games, and electronics. In order for a business to qualify for the deduction, it must maintain its primary place of business in New Mexico, and employ no more than 10 employees at any point during the year. Businesses that operate under a franchise agreement do not qualify to deduct their receipts under this tax holiday.

Contact: Santa Fe Taxation & Revenue Department, 505.827.0951 or 866.809.2335


Service for Resale Tax Credit

http://realfile.tax.newmexico.gov/FYI-106%20-%20Claiming%20Business-Related%20Tax%20Credits%20for%20Individuals%20and%20Businesses.pdf (see page 28)

Taxpayers who owe gross receipts tax or governmental gross receipts tax may claim a credit against gross receipts tax for receipts from selling services for resale, provided the resale is in the ordinary course of business, the resale is not subject to either gross receipts tax or governmental gross receipts tax, and the buyer delivers to the seller appropriate documentation from the Taxation and Revenue Department (TRD) that the resale meets the criteria for “resale in the ordinary course of business.” The credit is equal to 10% of eligible receipts multiplied by 3.775% (.03775) for businesses within city limits, or 5% (.05) for businesses located in an unincorporated area of a County. Services sold to government entities or to persons acting as contractors operating national laboratories in New Mexico are not eligible. The service must be resold and may not be consumed in the ordinary course of business. 

Contact: For assistance, call 505.827.0792


Aircraft Deduction

https://gonm.biz/why-new-mexico/competitive-business-climate/incentives/aircraft-deduction 

For aviation companies the following are deductible from a company’s gross receipts tax owed to the state: 1) receipts from selling aircraft parts or maintenance services for aircraft or aircraft parts, 2) Receipts of an aircraft manufacturer from selling aircraft flight support, pilot training, or maintenance training services, 3) Receipts from the sale of or from maintaining, refurbishing, remodeling, or otherwise modifying a commercial or military carrier over 10,000 pounds gross landing weight, 4) 50% of gross receipts from selling other aircraft, and 5) 40% of the receipts from selling jet fuel for use in turboprop or jet engines. 

Contact: Contact: Santa Fe Taxation & Revenue Department, 505.827.0951


Locomotive Fuel Gross Receipts & Compensating Tax Exemption

https://gonm.biz/why-new-mexico/competitive-business-climate/incentives/locomotive-fuel-gross-receipts-compensating-tax-exemption 

Receipts from the sale of fuel to a common carrier to be loaded or used in a locomotive engine may be deducted from the gross receipts, and the value of fuel sold to a common carrier to be loaded or used in a locomotive engine may be deducted in computing the compensating tax.

Contact: Contact: Santa Fe Taxation & Revenue Department, 505.827.0951

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