SPOTLIGHT PROGRAMS

High Wage Jobs Tax Credit: Refundable corporate income tax credit equal to 8.5% of wages and benefits paid for each job created and retained for a 44-week period.  The position must have an annual salary of at least $40,000 (project located in community with fewer than 60,000 residents) or $60,000 (project located in community with more than 60,000 residents) to qualify for the incentive.  The credit can be taken for 4 years, and the amount of credit claimed each year cannot exceed $12,750 per job. 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.

‍

‍Rural Jobs Tax Credit: Non-refundable corporate income, gross receipts or personal income tax credits are available to manufacturers and non-retail service companies that locate in rural communities.  Rural areas are divided into 2 tiers:

• Tier 2 = Nonmetro area municipalities that exceed 15,000 in population: Alamogordo, Carlsbad, Clovis, Gallup, and Hobbs
• Tier 1 = Everywhere else in a rural area

The maximum tax credit amount with respect to each qualifying job is equal to:

• Tier 1: 25% of the first $16,000 in wages paid for the qualifying job (may be taken at $1,000 per year for 4 years)
• Tier 2: 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)

A qualifying job is a job filled by an eligible employee for 48 weeks in a 12-month qualifying period.  Credits may be claimed for 2 or 4 years depending on the tier of the county.  Unused credits may be carried forward for up to 3 years.

‍

‍

TAX CREDITS

Investment Tax Credit for Manufacturers: Non-refundable corporate income, gross receipts, or personal income tax credit equal to 5.125% of the value of qualified equipment.  For every $750,000 of equipment, 1 employee must be added up to $30 million.  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. This is a double benefit because no gross receipts or compensating tax was paid on the purchase or importation of the equipment.‍

‍

Technology Jobs and R&D Tax Credit: Qualified New Mexico facilities may take a credit equal to 5 percent (10 percent in rural areas) of qualified research expenditures related to payroll, land, buildings, equipment, computer software, and upgrades, consultants and contractors performing work in New Mexico, technical books, manuals, and test materials. An additional 5 percent (10 percent in rural areas) may be applied against corporate income tax or personal income tax if base payroll expenses increased by at least $75,000 per $1,000,000 of expenditures claimed. The credit may be carried forward for up to three years.

‍

‍Alternative Energy Product Manufacturers Tax Credit: This program Provides a tax credit of 5% of the value of qualified equipment and other property used directly and exclusively in a manufacturing operation that makes components and systems for alternative energy. The Company must employ one new full-time employee for each $500,000 in qualified equipment up to $30,000,000 to receive the credit. A Company must employ one new full-time employee for each $1,000,000 in qualified equipment over $30,000,000 to receive the credit.‍

‍

Biodiesel 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 may be obtained from the Energy, Minerals, and Natural Resources Department to apply for this credit. The credit is equal to 30 percent of the purchase cost of the equipment, plus 30 percent 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 or compensating tax liability. The credit may be carried forward for four years from the date of the certificate of eligibility.

‍

‍New Market Development Tax Credit: The New Solar Market Development Tax Credit is available for New Mexico taxpayers who install solar energy systems on their residential, commercial, or agricultural properties that provide hot water, electricity, or space heat to the property on which it is installed. The tax credit is calculated as 10% of the system value up to $6,000 per taxpayer, per year. The tax credit can only be used to offset personal tax liabilities with the state. ‍

‍

Gross Receipts Tax Deduction: Gross receipts tax deductions are available for manufacturing equipment and consumables, directed energy systems, solar energy systems, wind and solar systems, and qualified space activities.

‍

‍

‍

‍

DIRECT FINANCIAL ASSISTANCE

LEDA Grants: The Local Economic Development Act (LEDA) allows municipalities in conjunction with the State to award discretionary cash grants to support infrastructure development and business attraction efforts that are consistent with local and regional economic development plans.

‍

‍

‍

JOB TRAINING

Job Training Incentive Program (JTIP): Provides reimbursable grants to cover training costs for newly created jobs. Reimbursements range from 50%-75% of employee wages and travel expenses. Qualifying projects include those involved in the manufacturing, processing, or assembling of agricultural or manufactured products; storing, warehousing, distributing, or selling products of agriculture, mining, or having been manufactured; or an “Economic Base Employer,” - defined as an employer who is deemed eligible for in-plant training assistance by the Economic Development Department’s Job Training Incentive Program.

‍

‍

‍

Last Updated: May 2023