Provides businesses with a tax credit equal to 10 percent of the combined value of salaries and benefits for each net new job paying a net taxable wage of at least $40,000 per year in the Albuquerque metropolitan area and other communities larger than 40,000 in population. Companies located in communities with a population less than 40,000 are eligible for the same tax credit for each net new job paying a net taxable wage of at least $28,000.
Qualified employers can take the credit for four years. The refundable credit can be applied against the modified combined tax liability of the taxpayer, including the state portion of the gross receipts tax, compensating tax and withholding tax. Excludes the local portion of the gross receipts tax. Employees must be hired prior to July 1, 2015.
Conditions:
- Net taxable wages, without company paid benefits, must equal at lease $40,000 in an urban community or $28,000 in a rural area to qualify as a high wage job.
- Net taxable wages include: hourly wage, bonus, salary, vacation, sick/holiday time.
- Company must generate more than 50% of its sales outside of New Mexico or must be eligible for the Job Training Incentive Program.
- Employer must be growing in employment greater than the year before.
- Eligible employees cannot be relatives of the qualified employer or own more than 50% of the company.
- Jobs must be occupied by an eligible employee for 48 weeks.
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Manufacturing Investment Tax Credit
New Mexico tax law provides for a credit equal to 5.125 percent of the value of qualified equipment and other property used directly and exclusively in a manufacturing operation. The credit can be applied against compensating, gross receipts tax or withholding tax due. Gross receipts tax acts very much like a sales tax; the Albuquerque rate is 7.0 percent. Compensating (or use) tax applies to purchases made out of state and totals 5.125 percent.
The credit is limited to 85 percent of the sum of the taxpayer’s gross receipts tax, compensating tax, and withholding tax due for the reporting period. Any remaining available credit may be claimed in subsequent operating periods.
The credit may be claimed for equipment acquired under an IRB. This is a double benefit since no gross receipts or compensating tax was paid on the purchase or importation of the equipment.
Criteria
| For Claims |
1 New Worker Employed for Each |
| $0 - $30,000,000 |
$500,000 in qualified equipment |
| Over $30,000,000 |
$1,000,000 in qualified equipment |
The credit at above levels is available until June 30, 2020. After June 30, 2020, the value of equipment available for the credit is capped at $2 million.
Alternative Energy Product Manufacturer’s Tax Credit
Provides for a credit equal to 5 percent of the value of qualified equipment and other property used directly and exclusively in a manufacturing operation that makes components or systems for alternative energy products.
Alternative Energy Product: an alternative energy vehicle, fuel cell system, renewable energy system or any component of an alternative energy vehicle, fuel cell system or renewable energy system or components for integrated gasification combined cycle coal facilities and equipment related to the sequestration of carbon from integrated gasification combined cycle plants.
The credit can be applied against compensating, gross receipts tax or withholding tax due. Any remaining credit can be carried forward for up to five years.
The effective date of this credit is July 1, 2007.
Criteria
Employer must meet the following criteria for new jobs added:
- Company must employ one new full-time employee for each $500,000 in qualified equipment up to $30,000,000 to receive the credit
- Company must employ one new full-time employee for each $1,000,000 in qualified equipment over $30,000,000 to receive the credit
Technology Jobs Tax Credit
Qualified New Mexico facilities may take a credit equal to 4 percent (8 percent in rural areas) of expenditures related to qualified research for land, buildings, equipment, computer software and upgrades, consultants, technical books and manuals, test materials, costs associated with patents, payroll, and labor. The credit may be taken against gross receipts tax, compensating tax or state payroll tax, and may be carried forward.
An additional 4 percent (8 percent total urban, 16 percent total rural) may be applied against state income tax if base payroll expenses increase by at least $75,000 per $1,000,000 of expenditures claimed. The credit may be carried forward.
Credits are not available for expenditures on buildings owned by a local government entity in conjunction with an Industrial Revenue Bond or already owned by the taxpayer or an affiliate before February 2000.
Child Care Tax Credit
New Mexico tax law provides for a corporate income tax credit of up to 30 percent of eligible expenses, net of reimbursements for child care services incurred and paid by the taxpayer in the taxable year for dependent children of their employees. A taxpayer that operates a child care facility used primarily by the dependent children of the taxpayer's employees may also claim a corporate income tax credit up to 30 percent of the net cost of operating a child care facility.
The credit may not exceed $30,000 in any taxable year and unused credits can be carried forward for three consecutive years.