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14. The alternative energy products manufacturing tax credit may be investment tax credit), equipment, software, payroll and technical manuals
claimed against gross receipts (except local option gross receipts and materials. After approval, the basic credit may be applied against state
taxes), compensating, withholding tax and other CRS taxes. The taxes due on the Form CRS-1, excluding local option gross receipts taxes.
excess credit may be carried forward for up to five years. An eligible taxpayer must apply to this Department for approval of basic
credit amounts within one year following the end of the reporting period
invEstmEnt crEDit in which the qualified expenditure occurred.
New Mexico has an Investment Credit Act (7-9A-1) to augment its favorable An additional credit, equal to 5%, can be earned by certain taxpayers
tax climate for manufacturing operations and to promote increased who are qualified research and development small businesses and who
employment in New Mexico. The credit may be claimed by the taxpayer increase their payroll expenses at a qualified facility over the prior year.
incorporating the qualified equipment into a manufacturing operation in These additional credits can only be applied to income tax liabilities. An
New Mexico, provided certain employment conditions are met. eligible taxpayer must apply to this Department for approval of additional
The value of the qualified equipment is the adjusted basis established for credit amounts within one year following the end of the calendar year in
the equipment under the applicable provisions of the Internal Revenue which the qualified expenditure occurred. A recapture clause applies to
Code. The employment conditions are: both the basic and additional credits.
1. for every $750,000 of equipment, one employee must be added up
to $30 million, and t axp aiDato nothEr statE
2. for amounts exceeding $30 million, one employee must be added The amount of sales, compensating or similar tax (up to a 5.125% rate)
for each $1 million of equipment. paid to another state on property acquired in that state or another state for
A taxpayer must apply for the credit. Additional information on the credit use in New Mexico may be credited against the amount of compensating
is provided with application forms available from the Department. Once tax due to New Mexico on the property (7-9-79).
approval is granted by the Department, the amount of any available credit
may be applied against the taxpayer’s compensating tax, gross receipts t axp aiDato nothEr statE; proDuct of rEsEarch anD DEvElopmEnt
tax or withholding tax due. The amount of investment credit claimable on sErvicE
any Form CRS-1 is limited to 85% of CRS taxes due. On January 1 of When a taxpayer pays gross receipts, sales or similar tax in another
any year certain claimants may cash in their remaining approved credit. state, or political subdivision of that state, on the product of research and
development services performed outside New Mexico but initially used in
rural oB ax J t crEDit New Mexico a credit against gross receipts tax can be claimed. This credit
Eligible employers may earn a credit for each qualifying job created on can only be claimed for receipts after July 1, 1989, and the amount of
or after July 1, 2006. The credit may be applied against the state taxes the credit can not exceed 5.125% multiplied by the amount subject to by
due on the CRS return (excluding local option gross receipts taxes) or both New Mexico and the other state or political subdivision of that state.
against personal or corporate income tax. To claim this credit taxpayers should use the Non-New Mexico Research
An “eligible employer” is one who is eligible for in-plant training assistance. and Development Credit Form (RD-1).
A “qualifying job” is one that is occupied by an eligible employee for at least
48 weeks in a 12-month qualifying period. The “rural area” of New Mexico compEnsatinG ax on t construction proJEcts
excludes Albuquerque, Los Ranchos, Los Alamos, Rio Rancho, Santa When a person in the construction business owes gross receipts tax on
Fe, and Las Cruces, and the area within ten miles of these municipalities. the sale of a construction project, the person may take a credit against
A “tier one” area is defined as a municipality within a rural area with a the gross receipts tax due for the amount of any compensating tax (NOT
population of 15,000 or less. A “tier two” area is a municipality within a GROSS RECEIPTS TAX) previously paid on construction materials and
rural area with a population over 15,000. services incorporated into the construction project (7-9-79).
The credit amount equals 25% of the first $16,000 in wages paid for a The credit must be taken for the same report period in which the gross
qualifying job in a “tier one” area and 12.5% of the first $16,000 in a “tier receipts tax is paid. Use the Form ACD-31077, Special Contractor’s Report
two” area. If the job is located in a “tier one” area, the employer may for Compensating Tax Credit to compute the credit and attach the form to
receive a credit for four consecutive years; if it is in a “tier two” area, the the Form CRS-1 with the schedule of computation.
employer may take the credit for two consecutive years. A credit once Forms for claiming the above credits and further information on the
earned is transferable. credits may be obtained from the Department’s district tax offices or the
Santa Fe headquarters. Contact information for those offices is located
laBoratory partnErship crEDit on page 2 of this Kit.
When a national laboratory offers certain types of eligible assistance to
individual small businesses (“small business” as defined in the federalhiGh-WaGE JoBs ax t c rEDit
Small Business Act, P.L. 85-536) in New Mexico and incurs expenses for Eligible employers can claim a credit equal to 10% of wages and benefits
doing so, it may take a credit against the state portion of gross receipts for new employees in "high-wage, economic-based" jobs. The law limits
tax of up to $20,000 per business or $40,000 for a business in a rural the credits to $12,000 per job per qualifying period. More than 50% of
area. The limit on assistance to a particular small business would apply sales must be to persons outside New Mexico, and the employer must
to the total amount of assistance provided by all national laboratories to be eligible for in-plant training assistance. Other conditions: the jobs must
that business. When claiming this credit, it cannot be claimed against be created between July 1, 2004, and June 30, 2020, be occupied for at
the local option gross receipts tax liability. The maximum credit for an least 48 weeks of qualifying period, and if the job is created before July
individual national laboratory is $2,400,000 in any calendar year. Qualified 1, 2015, pay at least $40,000 annually if located in or within 10 miles of a
expenses range widely from wages/benefits to providing mentors to the municipality of 60,000 or within Los Alamos County; jobs that are located in
small business in partnership with the laboratory. The business must a municipality with a population or less than 60,000 or in an unincorporated
certify to the laboratory that the assistance it seeks is not available at area that is not within 10 miles of a municipality with a population of 60,000
reasonable cost through private industry. or must pay at least $28,000. Jobs created after July 1, 2015, are eligible
if they pay at least $60,000 annually if located in or within 10 miles of a
tEchnoloGy JoBs anD rEsEarch anD DEvElopmEnt t axcrEDit municipality with a population of 60,000 or within Los Alamos County; jobs
Any taxpayer doing qualified research at a facility in New Mexico (other that are located in a municipality with a population of less than 60,000 or
than one operated for the United States government) may claim the basic in an unincorporated area that is not within 10 miles of a municipality with
credit equal to 5% of qualified expenditures. Qualified expenditures include a population of 60,000 or more must pay at least $40,000.
rent, facility operation and maintenance (except for facilities owned by An "eligible employer" means an employer who: (1) made more than fifty
the taxpayer before July 3, 2000, owned by a local government as an percent of its sales to persons outside New Mexico during the applicable
industrial revenue bond project or for which the taxpayer received an qualifying period; or (2) is certified by the Economic Development
Department to be eligible for development training program assistance
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