INCENTIVES
INDUSTRY-SPECIFIC TAX CREDITS AND DEDUCTIONS
AEROSPACE
Aircraft Maintenance or Remodeling Tax Deduction
Receipts from maintaining, refurbishing, remodeling or otherwise modifying a commercial or military carrier (aircraft) over 10,000 pounds gross landing weight may be deducted from gross receipts.
Aircraft Manufacturing Tax Deduction
Receipts of an aircraft manufacturer or affiliate from selling aircraft or aircraft parts, or from selling services performed on aircraft or aircraft components or from selling aircraft flight support, pilot training or maintenance training services may be deducted from gross receipts.
Research and Development Tax Deduction
Aerospace services are the research and development services sold or for resale to an organization for resale by the organization to the U.S. Air Force. When R&D services are sold to another corporation for resale to the Air Force, the seller’s receipts are deductible. If the R&D services are sold to an intermediary for resale to a corporation for resale to the Air Force, those receipts are also deductible.
Space Gross Receipts Tax Deductions
There are four separate deductions connected with the operation of a spaceport in New Mexico. Businesses may deduct the receipts from launching, operating or recovering space vehicles or payloads; from preparing a payload in New Mexico; from operating a spaceport in New Mexico; and from the provision of research, development, testing and evaluation services for the United States Air Force operationally responsive space program.
AGRI-BUSINESS
Agricultural Business Tax Deductions and Exemptions
Gross receipts tax deductions are available for: 1) feed for livestock, including the baling wire or twine used to contain the feed, fish raised for human consumption, poultry or animals raised for hides or pelts and seeds, roots, bulbs, plants, soil conditioners, fertilizers, insecticides, germicides, insects, fungicides, weedicides and water for irrigation and 2) Warehousing, threshing, cleaning, harvesting, growing, cultivating or processing agricultural products including ginning cotton, and testing and transporting milk. Gross receipts tax exemptions are permitted for feeding, pasturing, penning, handling or training livestock and, for agribusinesses, selling livestock, live poultry and unprocessed agricultural products, hides and pelts.
CLEAN AND RENEWABLE ENERGY
Advanced Energy Tax Credits
Advanced energy facilities, such as solar thermal electric generating, advanced technology coal generating 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 Manufacturers 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 the their capital expenses. The credit may be applied against gross receipts, compensating, or withholding tax and may be carried forward for up to 5 years.
Biodiesel Blending Facility Tax Credit
A business which installs biodiesel blending equipment owned by the rack operator for the purpose of establishing or expanding a facility to produce blended biodiesel fuel is eligible to claim a credit against gross receipts tax and compensating tax.. The credit is equal to 30% of the purchase cost of the equipment and the cost of installing that equipment. The credit cannot exceed $50,000 with respect to equipment installed at any one facility nor can the claims exceed $1,000,000 per calendar year.
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Blended Biodiesel Fuel Tax Credit
Provides a tax credit on blended biodiesel fuels (minimum of 2 percent 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.
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Hybrid Vehicle Tax Exemption
Purchasers of hybrid gasoline-electric vehicles with an EPA fuel economy rating of 27.5 miles per gallon or better can save between $600 and $1,000 in-state tax savings in addition to the federal tax deduction.
Renewable Energy Production Tax Credit
Each renewable energy generator of one megawatt or more may earn an income tax credit (personal or corporate) of 2.7 cents (on average) per kilowatt-hour for the first four hundred thousand megawatt-hours (=400,000,000 kilowatts) of electricity produced for ten consecutive years, beginning with the first year of production. New Mexico’s is fully refundable.
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Solar Energy Systems Gross Receipts Tax Exemption
Power produced from solar electric and solar thermal energy systems is exempt from gross receipts tax when the generated power is used on-site.
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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.
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Sustainable Building Tax Credit
This credit provides income tax credits for building energy-efficient, sustainable commercial, institutional and residential buildings. Homes must be 40 percent more energy efficient than the standard building code. Commercial and institutional buildings must be 50 percent more energy efficient.
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TECHNOLOGY AND MANUFACTURING
Research and Development Gross Receipts Tax Deduction
R&D services exported from the state are deductible from the gross receipts tax.
Research & Development Small Business Tax Credit
Qualified small businesses receive a tax credit equal to the sum of all gross receipts, compensating and withholding taxes due if at least 20% of their total annual expenses are for R&D.
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Rural Software and Web Site Gross Receipts Tax Deduction
Receipts from software and web development services located in rural New Mexico are deductible from the gross receipts tax.
Technology Jobs Tax Credit
Tax credits up to 4% of expenditures (including payroll) available for research and development in urban areas, doubling to 8% in rural communities.
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TELEMARKETING
Telemarketing Gross Receipts Tax Exemption
Receipts from WATS (Wide Area Telephone Service) and private communications services are exempted from gross receipts tax and interstate telecommunications gross receipts tax act.