Manufacturing Incentives

Manufacturing Investment Tax Credit
Double-Weighted Sales Factor Option

Manufacturing Investment Tax Credit

New Mexico provides a tax credit that can be claimed against a manufacturer’s gross receipts tax, compensating tax and withholding tax based on the value of qualifying manufacturing equipment placed in service in New Mexico when there is an increase in employment.

• Qualifying Operations
• combining or processing components or materials; includes genetic materials
• excludes construction, farming or power generating equipment for regulated utilities.

• Qualifying Equipment
• essential machines, mechanisms, tools used directly and exclusively in manufacturing operation
• not vehicles used off-site
• not previously used in New Mexico
• placed in manufacturing operation in New Mexico within prior year.

• Credit
• five percent of value of qualifying equipment
• applicable against gross receipts tax, compensating tax, and withholding tax
• partially refundable
• unused credit carries forward.

• Employment Requirements
• one additional full-time equivalent employee for every $500,000 in value of qualifying equipment up to $30,000,000 in equipment.
• One additional full-time equivalent employee for every $1,000,000 in value of qualifying equipment over $30,000,000 in value of equipment.

• Can Be Used in Addition to Industrial Revenue Bond
• Industrial Revenue Bonds allows purchase of manufacturing equipment free of gross receipts or compensating tax.

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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Double-Weighted Sales Factor Option for Corporate Income Tax

This optional formula for calculating New Mexico income tax liability applies to businesses involved in manufacturing. The double-weighted sales factor provision is currently slated to sunset for tax years beginning on or after January 1, 2011.

• Applies to businesses who combine or process components and materials, but does not include construction, farming, public utilities, or processing of natural resources including oil and gas.
• It benefits businesess with significant investment in plant and payroll in New Mexico, but that deliver most of their product out of state.
  
• If a company elects the double-weighted sales factor formula, it must use it for a minimum of three years.

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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