• The basic credit is equal to 4% of allocable expenditures made after July 2000 related to qualified research at a qualified New Mexico facility for depreciable land, rent, buildings, equipment, computer software and upgrades, technical books and manuals, test materials, consultants, and subcontractors performing work in New Mexico. The credit may be taken against gross receipts tax, compensating tax or state payroll tax.
   
• The additional credit is equal to the credit established for the basic credit that may be applied to state tax. However, the credit would require the taxpayer to increase its base payroll expense by $75,000 for every $1 million of investment for which the credit is claimed. For example: For every increase in payroll of $75,000 the company is entitled to an additional credit of $40,000.

Research and Development Tax Deduction

Any service that is exported from the state, including research and development services, are not subject to New Mexico gross receipts tax. These services must be produced by a business with a New Mexico office, sold to an out-of-state buyer and delivered and initially used out-of-state. This makes R & D a deductible transaction.

Laboratory Parnerships in Small Business

New Mexico is rich in both business support organizations and in technical support organizations like the ones below. From these groups, you may: