High Wage Jobs Tax Credit:
Refundable credit for companies who hire employees at salaries of $40K or higher in rural areas, and $60K or higher in urban communities, tax credits equal to 10% of the combined salary and benefits package for the year in which the job is created and may be taken for four years.
Manufacturer's Investment Tax Credit:
Manufacturers may take a tax credit of 5.125% of the value of qualified equipment and other property used in their operation. The credit can be applied against compensating, gross receipts or withholding tax up to 85% of the total. Any remaining available credit may be claimed in subsequent reporting periods. In addition, the company must add one new job for each $500,000 in qualified equipment claimed up to $30,000 spent; and one new job for each $1,000,000 in qualified equipment expenditures claimed over $30 million.
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.
Technology Jobs Tax Credit:
A taxpayer who conducts qualified research and development at a facility in New Mexico is allowed a basic tax credit equal to 4% of qualified expenditures, and 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 tax credit doubles for expenditures in facilities located in rural New Mexico (as defined for this tax credit as anywhere outside Rio Rancho or more than 3 miles outside Bernalillo, Dona Ana, San Juan, or Santa Fe counties).
Corporate Income Tax Reduction
The corporate income tax act is amended to reduce the top corporate tax rate from its present law 7.6% to 5.9% over five years. The reduction begins in 2014, with a rate reduction to 7.3% followed by 6.9% in 2015 and 6.6% in 2016. In 2017, the top bracket is collapsed into the middle bracket (presently 6.4%), with a 6.2% rate. For tax years 2018 and following, the top bracket of two becomes 5.9%. The bottom 4.8% bracket remains the same.
Industrial Revenue Bonds:
Our communities can issue Industrial Revenue Bonds (IRBs) to exempt a substantial portion of a company's property taxes on land, buildings and equipment. IRBs vary by community, up to 95 percent for 20 to 30 years. In addition, the IRB provides a complete exemption for compensating taxes on equipment, generating approximately six percent savings.
New Mexico State Contact:
Steve Vierck, CEcD, President & CEO
Eric CdeBaca, Vice President, Business Development
Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings. This information was last updated January 2016.