New Mexico Credits and Incentives

As we’ve mentioned before, our Georgia clients frequently ask us to investigate potential credits and incentives in other states where they have operations, potential acquisitions, or strong relationships with customers or vendors. In addition, private equity groups ask us about potential $$ for their portfolio companies.
We were recently asked about credits and incentives in New Mexico, so we spoke with economic development professionals in Albuquerque.  Also see New Mexico’s economic development site, click here.
New Mexico offers a meager selection of credits and incentives for new and existing businesses.  CNBC ranked New Mexico #42 in their 2017 America’s Top States for Business survey (Georgia was #2 in the same survey).  New Mexico’s worst categories were Education (No. 45) and Business Friendliness (No. 45).
Incentives and Credits include:
Rural Jobs Tax Credit — Qualified employers locating in a rural area and approved for the program are eligible to receive a tax credit (6.25% of the first $16,000 in wages) for up to four consecutive years.
Manufacturers’ Investment Tax Credit equal to 5.125% of the value of qualified equipment and other property used in operations to be applied against compensating, gross receipts or withholding tax. Other limits and conditions apply.
Technology Jobs Tax Credit is available for 5% of qualified research expenditures (10% in rural areas). May be taken against gross receipts tax, compensating tax or state payroll tax, and may be carried forward. An additional 5% may be applied against state income tax if base payroll expenses are increased by at least $75,000 per $1,000,000 of expenditures claimed.
Other Incentives — The Job Training Investment Program (JTIP) provides companies with reimbursement for training costs associated for newly created jobs. Reimbursements typically range from 50%-80% of employee wages and travel expenses, depending on several factors.
Compared to Georgia, New Mexico has:
  • Comparable corporate and lower personal income tax rates.
  • Comparable combined state and local tax burden
  • A more narrow range of incentives.
To summarize, New Mexico is below average for business tax incentives,but if you like a dry desert climate with very cool mountains, you’re in luck!