New Mexico Basic Business Taxes & Direct Financial Incentives 2012
New Mexico's economic development, finance and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include property tax abatement for new business locations and expansions. Specific programs include the Enchantment Land Certified Development Company and New Mexico Community Development Loan Fund, as well as the Job Training Incentive Program.
This credit gives companies who hire employees at salaries of $28K or higher in rural areas, and $40K or higher in urban communities, tax credits equal to ten percent of the combined salary and benefits package for the year in which the job is created, and for the three qualifying periods following.
Manufacturer's Investment Tax Credit:
Manufacturers may take a tax credit of five percent 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. As with all of these incentives, this can be stacked and provides the credit even if the tax was exempted under an IRB.
Rural Jobs Tax Credit:
Employers receive a credit of $1,000 for each qualifying job the employer creates, for four consecutive years in communities of less than 15,000 residents, and two consecutive years in non-MSA communities of more than 15,000 residents.
Technology Jobs Tax Credit:
This credit has two parts: a basic credit and an additional credit, each equal to 4% of the qualified expenditures on qualified research at a qualified facility. The credit amount doubles for expenditures in facilities located in rural New Mexico.
Basic credit: The taxpayer claims the credit within one year following the end of the year in which the expenditure was made. The credit amount is applied against the taxpayer's state gross receipts, compensating and withholding liabilities until the credit is exhausted.
Additional credit: A taxpayer earns the additional credit by increasing its payroll. The annual payroll must increase by at least $75,000 over the base period and by at least $75,000 for each $1 million in qualified expenditures (equivalent to $40,000 in credit) it wishes to claim. The credit is not refundable, but excess credit amounts may be carried forward.
Job Training Incentive Program:
Widely regarded as one of the most effective in the country, the Job Training Incentive Program provides classroom and on-the-job training, paying from 40 percent to 70 percent (depending on job skill level, pay scale, and geographic location) of employee training costs and wages for an expanding or relocating business for up to six months.
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, but generally range from 50 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.
Alternative Energy Product Manufacturer's Tax Credit:
Manufacturers of electric or hybrid vehicles, fuel cell systems, renewable energy systems, IGCC systems, and carbon sequestration equipment may receive for a tax credit of up to 5 percent of their capital expenses. The credit may be applied against gross receipts, compensating, or withholding tax and may be carried forward for up to five years. Additional industry-specific incentives for aerospace and defense, value-added agriculture, energy and natural resources, tech commercialization, advanced manufacturing, logistics and distribution, digital media, and back office and technical support.
New Mexico Partnership
110 Second Street SW
Albuquerque, NM 87102
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.