Step Up Program

The Step Up Program is a new part of the Job Training Incentive Program. It helps qualified companies train existing workers in areas such as new technology integration and production processes by reimbursing a portion of the cost associated with enhancing their job skills.

Company Eligibility

Companies must meet basic JTIP eligibility requirements, producing a product or receiving more than half their revenues from out-of-state sales. Additional requirements include:

• operating in New Mexico for at least one year prior to application date
• demonstrable financial viability
• current on all state tax obligations.

Reimbursement guidelines

The Step Up Program:

• reimburses 50% of training expenses with a cap of
• $2K per employee
• $100K per company
• requires a 5% wage increase for an employee within 6 months of training to receive reimbursement for employee development
• to receive reimbursement for training on new equipment and processes requires a capital investment of:
• $100K in rural communities or companies with fewer than 20 employees
• $500K in companies with 20 or more employees.

Child Care Corporate Income Tax Credit

New Mexico provides for a corporate income tax credit of up to 30% of the net cost for paying for or directly providing licensed child care for employee children under the age of twelve:

• For a taxpayer that pays a third party for child care during the hours of employment, the credit is 30% of the amount paid net of reimbursements from employees or other sources.

• For a taxpayer that operates a nonprofit licensed child care facility primarily for employee children, the credit is 30% of the cost of operating the facility, net of reimbursements received from employees, federal tax credits or other sources.

• The credit may only be claimed for the taxable year in which the expenses are incurred, but if not exhausted the excess can carry over for up to three years.
• The credit may not exceed $30,000 in any taxable year

For more information or an analysis of tax incentives for your company, call 800-226-2935 or email us .

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Community Development Incentive Act

This incentive is designed to give businesses a less expensive property tax abatement alternative to Industrial Revenue Bonds (IRBs), particularly when the project is too small to warrant the time and expense associated with IRBs. It is particularly appropriate for mid-size companies that wish to install equipment worth $1 million or more, although there is no actual minimum. The Community Development Incentive Act (CDIA) applies only to equipment (commercial personal property) at a new business facility (including some expansions), not to the acquisition of land or buildings. Unlike IRBs, this incentive does not provide gross receipts tax relief on the purchase of equipment.

• Governing bodies of municipalities and counties may enact a resolution to exempt up to 100% of property taxes for commercial personal property (not real property) for up to 20 years.
• A 'facility' means any factory, mill, plant, refinery, warehouse, dairy, feedlot, building or complex of buildings located within the state, including the land on which the facility is located and all machinery, equipment and other real and tangible personal property located at or within the facility and used in connection with the operation of the facility.
• A 'new business facility' means a facility that is employed by the taxpayer in the operation of a revenue-producing enterprise. The facility may not be a replacement business facility (by the taxpayer or a related entity).
• Albuquerque: 2/3 of county portion of property tax (50% of total property tax). Belen: 2/3 of city and county property tax.

For more information or a free custom analysis of tax incentives for your company, call 800-226-2935 or email us .

Rural Jobs Tax Credit

The Metro New Mexico communities of Belen, Los Lunas and Estancia Valley qualify as rural for purposes of this tax transferable tax credit. Passed by the 2001 legislature, the law states that:

• Credit can be taken against the state portion of the gross receipts or compensating tax and corporate or personal income tax.
• An annual tax credit equal to 6.25% of the first $16,000 of wages paid to a full-time employee ($1,000 maximum credit per employee).
• Credit can be taken for four years in a Tier 1 area (unincorporated area or municipality with a population of 15,000 or less) or two years in a Tier 2 community (municipality in a rural area with a population of more than 15,000) if qualifying employee has worked 48 weeks during the year the credit is taken and has worked at a job qualifying for training assistance.
• The credit can be carried forward for 3 years.
• The credit is transferable.
• New Mexico's Economic Development Department will certify eligibility.

For more information or a free custom analysis of tax incentives for your company, call 800-226-2935 or email us .

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Industrial Revenue Bonds

Use of an Industrial Revenue Bond (IRB) for larger industrial projects effectively allows qualifying businesses to purchase plant and process equipment free of gross receipts or compensating tax, and with a full or partial exemption from property tax on project property for up to thirty years.

Technically, an IRB is a loan from the bond purchaser to a company where the loan proceeds and repayment flow through a county or municipal issuer ('issuer'). Bond funds are used by a business to buy land and equipment as agents for the government entity. A company enters into a lease with the government entity to use the property in its operations. The agreement provides the company will lease the facility from the issuer and, at the end of the lease, purchase the facility from the issuer for a nominal amount. The government entity does not exercise any control over plant operations and has no interest in doing so. The county or municipality has no financial risk in the arrangement which essentially lets a private business take advantage of the tax exempt status of counties and municipalities.

IRBs in Metro New Mexico have advantages, conditions, and cautions.

• A city council or county commission must vote to 'induce' an IRB.
• The company must secure its own lender (purchaser) or have the IRBs bought by a related entity.
• The loan proceeds and repayment flow through a governmental issuer.
• Tax-free IRBs are limited to manufacturing companies with a maximum project size of $10M. Taxable IRBs have no size limit.
• A remaining property tax exemption may be passed on to new owner or flow through a lease to a new user.
• Benefit of remaining property tax exemption can, in some cases, be passed on to new project owner or flow through a lease in the event of sale or lease to new user.
• Some communities impose termination penalties (“claw back provisions”).
• Some communities require payments in lieu of property taxes (“PILOT payments”).
• Clients considering the use of IRBs should not commit to legally binding contracts for the purchase of equipment, facilities or land involving substantial expenditures, except on a contingent basis, until the city or county that will issue the IRB approves an inducement or ordinance. Transactions of this type, made before an IRB has been induced or authorized, should have a provision that clearly states that the offer is contingent upon IRBs being issued.
• The rationale behind this approach is to allow the client to have sufficient flexibility in regard to the transaction prior to the time that official action is taken, and not to take steps that could be perceived as assuring the development of a project regardless of the decision of the city or county.

For more information or a free custom analysis of tax incentives for your company, call 800-226-2935 or email us .

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High-Wage Jobs Tax Credit

New Mexico wants to partner with employers in creating new, higher-paying jobs. Eligible employers can receive a refundable tax credit that can be claimed against gross receipts, compensating and withholding taxes for up to four years for each qualifying new high-wage job.

• Eligible Employers
  
• Fifty percent of sales in the year prior to claiming credit were to customers outside of New Mexico. OR...
• Eligible for Job Training Assistance Program assistance on or before date new high wage job created. AND...
• Must be an increase in number of new high-wage jobs at job location over prior year.

• Qualifying Employee
• resident of New Mexico
• employed in new job created between July 1, 2004 and July 1, 2009
• holds job for at least 48 weeks in year before applying for credit
• in a municipality with population 40,000 or over (Albuquerque or Rio Rancho), is paid wages (exclusive of some benefits) of at least $40,000 for the twelve months following job start
• in a municipality with population under 40,000 or unincorporated areas, is paid wages (exclusive of some benefits) of at least $28,000 for twelve months following job start.

• Amount of Credit
• Ten percent of wages and benefits paid to qualifying employee up to $12,000 per qualifying employee per year
• Claimed against sum of state (but not local option) gross receipts tax, compensating tax and withholding tax, minus any other credits claimed against these taxes.

• Credit Refundable If Not Exhausted

For more information or analysis of tax incentives for your company, call 800-226-2935 or email us .

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Job Training Incentive Program

The New Mexico Job Training Incentive Program (JTIP) is one of the strongest workforce training programs in the nation. Since 1972, this highly flexible program has provided classroom and on-the-job training for new hires. Step Up is a new reimbursement program to cover the costs of additional training of existing employees for New Mexico manufacturers and service businesses that derive at least 50% of their revenue out-of-state. The JTIP program: 

• Provides customized training by New Mexico post-secondary educational institutions or company trainers.
• Requires companies to submit a proposal to the JTIP board.

Reimbursement Details:

• 50% of trainees' wages up to 1,040 hours/trainee in urban areas (population greater than 40,000).
• 60%-75% of trainees' wages up to 1,040 hours/trainee in rural areas and on tribal land.
• An additional 5% of trainee wages for approved jobs that meet High Wage Job Tax Credit wage guidelines.
• 100% of instructional costs provided by New Mexico accredited post-secondary educational institutions, such as community colleges and four-year colleges.
• Partial reimbursement for travel and per diem required of trainees or company trainers up to 5% of trainee wage reimbursement.

Conditions:

Eligible businesses are:

• Manufacturers
• Service exporters who derive 50% of their revenue from sales outside of New Mexico
• Warehouse and distribution operations with 50% of revenues from sales outside of New Mexico.

And must be adding net new jobs.

• Businesses new to New Mexico qualify.
• Existing businesses qualify if new jobs represent an increase over the average previous three-year employee count.
• Previous JTIP recipients qualify if new jobs represent an increase over the highest employment level achieved under the previous JTIP contract.
• The recapture clause would deny claims for any company that closed its doors within one year of training employees.
  

Trainee eligibility:

• Participants must have been a New Mexico resident for one continuous year at any time prior to hire.
• Trainees must be guaranteed full-time year-around employment upon successful completion of training.
• Production and technical jobs to support production (e.g., computer programmers, engineers, software developers, production and front line managers) qualify.
• For each funding request, a maximum of 10% of qualifying jobs may be administrative (e.g., senior managers, accounting, marketing and secretarial).
• “Temp to perm' jobs qualify provided:
• trainee becomes a full-time employee of the company prior to the end of approved training period; and
• trainee working through temp agency must receive comparable medical, dental and vision benefits as full-time employee of the company.
• JTIP will only reimburse a portion of the wage paid to the trainee by the temporary agency, not the agency fees.
• Initial funding request must include the number of trainees to be hired within the first four months. Allocation for those not hired during this period will be returned to the JTIP fund. Employees must complete the entire training program before reimbursement.
• Companies can apply for subsequent contracts if they can demonstrate an expansion beyond peak employment as established in the prior application.
• In urban areas, companies hiring more than 20 people must offer health insurance and subsidize at least 50% of the premium for employees.
• Retraining does not qualify for assistance.

Proposal Details

Companies must submit a proposal for funding to the New Mexico Economic Development Department's JTIP division. Proposals are considered by the JTIP board at monthly meetings.

• Application is made to the Job Training Incentive Board and funding is subject to availability.
• Initial funding request must include the number of trainees to be hired within the first four months. Allocation for those not hired during this period will be returned to the JTIP fund.
• Employee must complete entire training program before reimbursement.
• Proof of actual training hours will be required.
• Companies can apply for subsequent contracts if they can demonstrate an expansion beyond peak employment as established in the prior application.

The maximum wage reimbursement is tied to hours required to learn the job and the hourly wage. The Job Training Incentive Board uses Job Zones as outlined by the federal Department of Labor's O-Net and the JTIP Wage Table to determine the maximum allowable training hours for a position.

2007-08 Job Training Incentive Program Wage Table for New Mexico

For more information or an analysis of tax incentives for your company,
call 800-226-2935 or email us .

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