BUSINESS INCENTIVES   

State and Local General Incentives for Businesses
Expanding in or Relocating to New Mexico:

High Wage Jobs Tax Credit

A taxpayer who is an eligible employer may apply for and receive a tax credit for each new high-wage, economic-based job. The credit amount equals 10 percent of the wages and benefits paid for each new economic-base job created.

Qualified jobs:

Qualified employers can take the credit for four years. The credit can be applied to the state portion of the gross receipts tax, compensating tax, and withholding tax. Any excess credit will be refunded to the taxpayer. The credit shall not exceed $12,000 per year, per job.

Job Training Incentive Program (JTIP)
 (formerly the Industrial Development Training Program)

New Mexico has one of the most aggressive training incentive packages in the country The Job Training Incentive Program (JTIP), administered by the Economic Development Department, provides classroom and on-the-job training and is not restricted to economically disadvantaged persons. Trainees must be New Mexico residents and final selection rests solely with the employer. Costs that are reimbursable include a trainee's starting hourly wage (up to 1,040 hours) at 50% in urban areas and up to 65% in rural areas, classroom time in educational institutions, trainers' wages and instructional materials.

Child Care Corporate Income Tax Credit

Corporations providing or paying for licensed child care services for employees’ children under 12 years of age may deduct 30 percent of eligible expenses from their corporate income tax liability for the taxable year in which the expenses occur. For a company operating a value-added day care center for its employees, this credit reduces the cost to provide this benefit to employees. The corporate income tax credit is 30 percent of eligible costs up to $30,000 in any taxable year. Unused credit amounts may be carried forward for three years.

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:

New Mexico 9000

Through New Mexico 9000, businesses may obtain IS0 9000 certification on a sliding scale based on gross receipts. Also, the New Mexico 9000 process takes only one year.

Capital Equipment Tax Credit

The Capital Equipment Tax Credit Act provides an inducement for in-coming call center operations to make major expansions and relocate facilities in rural New Mexico. This legislation provides tax relief on the purchase of capital equipment for such facilities. The credit allows for a gross receipts and compensating tax credit equal to the state-imposed rate of 5%. Qualified equipment is defined as equipment that is depreciable for federal income tax purposes.

Welfare-To-Work (WTW) Opportunity Tax Credit

Employers may receive federal tax credits for each qualified WTW individual employed. The WTW Tax Credit extends over a 2-year period. The maximum credit may equal $8,500 per employee.

Qualified Business Facility Rehabilitation Credit

This credit may betaken against corporate income tax (or personal income tax) for the restoration, rehabilitation, or renovation of a qualified business facility in an enterprise zone. A qualified business facility is a building that has been vacant for at least 24 months and will be put into use by a person in the manufacturing, distribution, or service industries. The credit is equal to 50% of the project cost, up to a maximum of $50,000.

Community Development Incentive Act (CDIA)

New Mexico state law allows a local government (except Class A counties or municipalities) to exempt a company from personal property taxation for up to 50% of the rate imposed, for a period of up to five years, for the purpose of job creation. The only portion of the property tax levy not exempted is that imposed by the local school district. CDIA

Community Development Block Grants (CDBG)

CDBG Funds are allocated on a yearly basis from the U.S. Department of Housing and Urban Development. Albuquerque, Santa Fe, and Las Cruces each administer their own programs. The New Mexico Department of Finance and Administration administers the program for the balance of the state. The grant is made to a local unit of government, which then makes loans to the private sector.

The loan can be used for acquisition of real property and equipment, working capital and construction, but may not be used to finance the movement of equipment or plants from one location to another. The CDBG funds require a 2:1 match between non-CDBG and non-public cash funds to the CDBG amount. The loans are extremely flexible with respect to pay back; the terms are negotiated between the local unit of government and the private company involved. Loan maximum is $500,000. (Tied to number of jobs created, usually $15,000/job). This program is subject to change by the U.S. Congress. Terms cited were available in 1994.

New Mexico & Federal Loan/Grant Programs
Enchantment Land Certified Development Company (ELCDC)

The ELCDC is a SBA licensed not-for-profit organization authorized to implement the SBA 504 programs. A 504 program provides long-term (20years), low down payment (10%), reasonably priced, fixed rate loans for land, buildings and equipment for expanding small businesses. The ELCDC sells a debenture with a 100 percent SBA guarantee for up to 40% of the project or $750,000 (in some cases $1,000,000) whichever is less, the company puts in 10% equity and the remaining 50% is from a first mortgage loan from a private sector lender. Since 1992 the program has loaned $266. Million on 245 projects and helped create over 4000 jobs.

Local Economic Development Act

The Local Economic Development Act provides local governments with an avenue to finance economic development projects. The projects may include the purchase of land, buildings, and infrastructure defined by the local economic development plan. The economic development projects may be financed by the following two methods:

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