Low cost of living, high quality of life.
For the past several years, Forbes magazine has consistently ranked Albuquerque among the nation's top ten in several crucial categories. In 2007, Albuquerque ranked #8 in the U.S. in two areas: Best Place for Business and Careers and Best City for Jobs. In 2006, Forbes ranked the state #7 for Lowest Business Costs. Together, the City of Albuquerque and the State of New Mexico offer business incentives, with generous, highly specialized programs spanning a variety of key industries. Significant programs include:
• Clean and Renewable Energy Incentives*
- Advanced Energy Tax Credits
- Alternative Energy Product Manufacturer's Tax Credit
- Bio Fuels Production and Sales Tax Incentives
- Renewable Energy Production Tax Credit
- Biomass-Related Equipment Compensating Tax Deduction
- Energy Efficiency and Renewable Energy Bonding Act
- The Efficient Use of Energy Act
- Clean Energy Grants Program
- Solar Market Development Income Tax Credit
- Wind Energy Equipment Gross Receipts Tax Deduction
• Technology Jobs Tax Credit
• Manufacturing Investment Tax Credit
• New Mexico 9000 ISO Compliance for Small Business
• Gross Receipts Tax Exemptions (IRBs)
• Property Tax Abatements (IRBs)
• High Wage Jobs Tax Credit
• Job Training Incentive Program
• Out-of-State Tuition Waiver and Lottery Scholarships
• Film Incentives
For a complete list of business incentives offered by the State of New Mexico, please click here.
Clean and Renewable Energy Incentives
A broad array of incentives are available to businesses relocating to New Mexico.
Advanced Energy Tax Credit
Advanced energy facilities, such as solar thermal electric, advanced technology coal or
recycled energy, may qualify for up to $60 million in credits. The credit is equal to 6 percent
of facility development and construction expenditures.
Alternative Energy Product Manufacturs' Tax Credit
This tax credit was created by the State of New Mexico to encourage the manufacturing of
"advanced energy products." Manufacturers can receive a 6% credit on their equipment.
The credit went into effect July 1, 2007.
Bio Fuels Production and Sales Tax Incentive
Provides a tax credit on blended biodiesel fuels (a minimum of 2% biodiesel). Gross receipts
and compensating tax may be deducted for installing biodiesel blending infrastructure up to
$50,000 per facility or $1 million per year.
Renewable Energy Production Tax Credit
Provides $0.01/kwh corporate income tax credit for 10 years for the first 4000,000 mwh of
electricity produced each year by a renewable energy facility using wind, solar or biomass energy.
Biomass-Related Equipment Compensating Tax Deduction
The value of biomass-related equipment such as: boiler, gasifier, furnace, turbine-generator,
storage facility, feedstock processing or drying equipment, feedstock trailer or interconnection
transformer and biomass materials used for processing into biopower, biofuels or bio-based
products may be deducted in computing the compensating tax due.
Energy Efficiency and Renewable Energy Bonding Act
Enables the state to issue bonds for $20 million in energy efficiency upgrades in state buildings and
schools, pay back the bonds with energy savings, and use the net profits for renewable energy
projects.
The Efficient Use of Energy Act
Public utilities required to evaluate the potential for energy efficiency improvements and implement
programs to increase energy efficiency.
Clean Energy Grants Program
Appropriates $3 million for grants for clean energy projects and hydrogen energy technology for
municipalities and other eligible community, tribal, and state entities.
Solar Market Development Income Tax Credit
Augments the federal solar tax credit by reimbursing up to 30 percent of the cost of a solar
photovoltaic or solar thermal system. Solar system owners can receive up to $2,000 federal
solar tax credits and up to $9,000 in state solar tax credits.
Wind Energy Equipment Gross Receipts Tax Deduction
New Mexico provides a gross receipts tax deduction for receipts from selling wind turbines,
nacelles, rotors, blades and related equipment to a state or federal government entity.
Technology Jobs Tax Credit
Qualified New Mexico facilities may take a credit equal to 4% (8% 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% (8% total urban, 16% 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.
Manufacturing Investment Tax Credit
New Mexico tax law provides for a credit equal to 5% of the value of qualified equipment and other property used directly and exclusively in a manufacturing operation. The credit can be applied against compensating or gross receipts tax or withholding tax due. Gross receipts tax acts very much like a sales tax; the city rate is 6.75%. Compensating or use tax applies to purchases made out of state that total 5%. The credit is limited to 85% 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.
New Mexico 9000 ISO Compliance for Small Business
New Mexico 9000 is an alliance of the New Mexico Economic Development Department, Honeywell Federal Manufacturing & Technologies, Los Alamos National Laboratory and Sandia National Laboratories that was created to provide assistance to New Mexico businesses in becoming ISO Compliant. Fees range from $1,000 to $6,000 instead of the $40,000 to $120,000 if a company complies with this program on its own.
Industrial Revenue Bonds
Significant property tax and compensating tax exemptions can occur through the use of an Industrial Revenue Bond (IRB). An IRB is a loan from the bond purchaser to a company where the loan proceeds and repayment flows through a governmental issuer. Instead of purchasing equipment directly, companies can enter into a lease with the issuer, provided the company will lease the equipment from the issuer and, at end of lease, purchase the equipment from the issuer for a nominal amount. In Albuquerque, the maximum life of an IRB is 20 years.
High Wage Job Tax Credit
The High Wage Jobs Tax Credit provides businesses with a tax credit equal to 10% of the combined value of salaries and benefits for each net new job that pays a salary of at least $40,000 per year in the Albuquerque metropolitan area and other communities larger than 40,000 in population. The value of the credit cannot exceed $12,000 per job. Qualified employers can take the credit for four years. The credit can be applied against the modified combined tax liability of a taxpayer, including the state portion of gross receipts tax, compensating tax and withholding tax.
Job Training Incentive Program
The New Mexico Job Training Incentive Program is a highly flexible state program to provide pre-employment (classroom) and on-the-job training. Customized training may be provided by post-secondary educational institutions, company trainers, or outside trainers. The state will reimburse:
• Up to 50% of trainees' wages, up to 1,040 hours in urban areas
• 100% of classroom training costs provided by New Mexico post-secondary education institutions (e.g. Albuquerque Technical Vocational Institute)
• 50% of trainees' travel and per diem for out-of-state training
• 50% of company or outside trainers' travel and per diem when using out-of-state trainers
*Source: New Mexico State Economic Development Department www.edd.nm.us
Out-of-State Tuition Waiver and Lottery Scholarships
The University of New Mexico and the Central New Mexico Community College will make in-state resident tuition rates available to relocating employees and their families who qualify for admission. In addition, all resident New Mexican high school seniors with at least a 2.5 GPA are eligible for the New Mexico Lottery Scholarship that pays for students to attend a state college, tuition free. The scholarship is funded by a New Mexico Lottery Program in which 100% of lottery net proceeds go to the Lottery Tuition Fund.
FILM INDUSTRY INCENTIVES
25% Film Production Tax Rebate
New Mexico offers a 25% tax rebate on all production expenditures (including New Mexico labor) that are subject to taxation by the State of New Mexico. This is a refund, not a credit.
Film Investment Loan Program
New Mexico offers a loan, with participation in lieu of interest, up to $15 million per project (which can represent 100% of budget) for qualifying feature films or television projects. Terms are negotiated and budget must be at least $2 million.
No State Sales Tax
Type 16 Nontaxable Transaction Certificates (NTTCs) work much like grocery-store coupons. A certificate is presented at the point of sale and no gross receipts tax (sales tax) is charged. Used primarily for commercials & PSAs. Not to be used in conjunction with the 25% tax rebate.
Film Crew Advancement Program
New Mexico offers a 50% reimbursement of wages for on-the-job training of New Mexico residents in advanced below-the-line crew positions. New Mexican Supervisors and Keys have the opportunity to hire and mentor qualifying New Mexico crew in advanced positions for this program.
*Source: NM Film Office www.nmfilm.com
*Source: New Mexico Partnership
Albuquerque Economic Development
*Note: Incentive details are provided for information purposes only. The information should not be relied upon as legal advice or a legal opinion for any specific facts or circumstances. For a complete analysis for individual fact situations we recommend that the reader consult with a qualified state tax lawyer or accountant. |