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The following state and local incentives are generally available to economic based businesses.

Single Sales Factor Apportionment

Effective in taxable year starting January 1, 2014 businesses engaged in manufacturing may choose to take part in the phased-in single sales factor apportionment for calculation of their corporate income tax liability. As of January 1, 2015 eligible headquarters operations may elect the single sales factor apportionment for calculation of their corporate income tax liability. The election must be made in writing and will remain in effect until the taxpayer notifies the Taxation and revenue Department that the election is terminated. The election must remain in effect at least three consecutive taxable years containing thirty-six calendar months.

Double-Weighted Sales
Triple-Weighted Sales
70% Sales
80% Sales
Single Sales Factor

Manufacturer's Gross Receipts Tax Exemption on Consumables

Beginning January 1, 2013 a manufacturer may deduct a percentage of the gross receipts tax paid on consumables used in the manufacturing process. "Consumable" means tangible personal property that is incorporated into, destroyed, depleted, or transformed in the process of manufacturing a product and includes electricity, fuels, water, supplies, chemicals, gases, repair, and spare parts, but does not include tools or equipment used to create the product. The GRT exemption will be 100% phased-in on January 1, 2017.

Manufacturing Investment Tax Credit

New Mexico tax law provides for a credit equal to 5.125 percent of the value of qualified equipment and other property used directly and exclusively in a manufacturing operation. The credit can be applied against compensating, gross receipts tax or withholding tax due.

The credit is limited to 85 percent of the sum of the taxpayer’s gross receipts tax, compensating tax, and withholding tax due for the reporting period. Any remaining available credit may be claimed in subsequent operating periods. The credit may be claimed for equipment acquired under an IRB. This is a double benefit since no gross receipts or compensating tax was paid on the purchase or importation of the equipment.


For Claims 1 New Worker Employed for Each
$0 - $30,000,000 $500,000 in qualified equipment
Over $30,000,000 $1,000,000 in qualified equipment


The credit at above levels is available until June 30, 2020. After June 30, 2020, the value of equipment available for the credit is capped at $2 million.

Alternative Energy Product Manufacturer’s Tax Credit

Provides for a credit equal to 5 percent of the value of qualified equipment and other property used directly and exclusively in a manufacturing operation that makes components or systems for alternative energy products.

Alternative Energy Product: an alternative energy vehicle, fuel cell system, renewable energy system or any component of an alternative energy vehicle, fuel cell system or renewable energy system or components for integrated gasification combined cycle coal facilities and equipment related to the sequestration of carbon from integrated gasification combined cycle plants.

The credit can be applied against compensating, gross receipts tax or withholding tax due. Any remaining credit can be carried forward for up to five years.


Employer must meet the following criteria for new jobs added:

  • Company must employ one new full-time employee for each $500,000 in qualified equipment up to $30,000,000 to receive the credit
  • Company must employ one new full-time employee for each $1,000,000 in qualified equipment over $30,000,000 to receive the credit

Technology Jobs and Research and Development Tax Credit

Qualified New Mexico facilities may take a credit equal to 5% (10% in rural areas) of expenditures related to qualified research for payroll, land, buildings, equipment, computer software and upgrades, consultants and contractors performing work in New Mexico, technical books, manuals and test materials. The credit may be taken against compensating tax, gross receipts tax (excluding the local options portion of the gross receipts tax), and withholding tax. The credit may be carried forward for up to three years.

An additional 5% (10% total urban, 20% total rural) may be applied against corporate income tax or personal income tax if base payroll expenses increase by at least $75,000 per $1,000,000 of expenditures claimed. The additional credit may be carried forward for up to three years.

Credits are not available for:

  • Investments in real property owned by the city of the county in conjunction with an Industrial Revenue Bond
  • Investments in personal property that have been given a credit under the Investment Credit Act
  • National Laboratories
  • Property owned by the tax payer or an affiliate prior to July 3, 2000
  • Contract research & development

Job Training Incentive Program

Highly flexible state program to provide on-the-job training for qualified employees of qualified employers. Customized training may be provided by post-secondary educational institutions, company trainers, or outside trainers.

The state will reimburse for:

  • Up to 50 percent of trainees' wages up to 1,040 hours for companies located in urban areas and up to 65% of trainee's wages for up to 1,040 hours for companies located in rural areas
    • Companies may receive an additional wage reimbursement of 5% reimbursement for an eligible high-wage job
    • Companies may receive an additional 5% wage reimbursement for one of the three following conditions:
      • Trainee has taken the WorkKeys® assessment as a part of the hiring process
      • Trainee has graduated within the past twelve months from a post-secondary training of academic program at a New Mexico institute of higher education
      • Trainee is a U.S. Veteran
  • Classroom training costs provided by New Mexico post-secondary educational institutions, ($35 per hour for instructors’ time capped at $1,000 per employee).

Company eligibility:

  • Must be a new or expanding company in New Mexico that manufactures/produces a product or a non-retail company that generates more than 50 percent of its service revenue from outside the state.
    • Contract customer service centers must meet or exceed at least the local entry wage of the industry to qualify as well as provide evidence of a minimum 5-year lease or purchase of a facility in New Mexico.
  • Corporate, international, national, regional and divisional headquarters located in New Mexico may qualify provided at least 50% of the company's revenues are derived from operations outside of New Mexico. Eligible positions may include non-executive professional support positions including finance, human resources, legal, facilities management, engineering, research and development, planning, IT, sales, marketing and general administration.
  • Manufacturers which perform research and development and engineering functions for their own products in New Mexico, but manufacture elsewhere are eligible.
  • Start-ups and early stage manufacturing company may be eligible. The company must be adequately capitalized to reach first production and/or able to deliver service per criteria and procedures as set forth by and at the discretion of the JTIP board.


  • Maximum wage reimbursement is tied to hours required to learn the job and the hourly wage.
  • “Hands-on” or production jobs qualify; technical jobs such as first-line supervisors and engineering generally qualify; support, administrative and sales positions are limited to 20 percent of total number of positions that qualify for funding, e-training does not qualify for assistance.
  • Companies can apply for subsequent assistance if they have maintained hiring levels that exceed the peak employment as established by the initial application.
  • Companies have six months from the board approval date to fill
  • In urban areas, companies hiring more than 20 people must offer health insurance and subsidize at least 50 percent of the premium for employees who elect coverage.
  • Temporary to permanent employees qualify provided trainees becomes full-time employees of the company prior to the end of the JTIP contract period; and trainees working through temporary agency receive comparable medical, dental and vision benefits as full-time employees of the company.
  • Reimbursement is subject to availability of funds and approval by the Job Training Incentives Board.

Industrial Revenue Bonds

Significant real and personal property tax and compensating tax exemptions can occur through the use of an Industrial Revenue Bond (IRB). The amount of property tax exemption and term of bond is determined by each community.

An IRB is a loan from the bond purchaser to a company where the loan proceeds and repayment flows through a governmental issuer. Instead of purchasing a facility directly, companies can enter into a lease with the issuer, provided the company will lease the facility from the issuer and at end of the lease, purchase the facility from the issuer for a nominal amount.

IRBs can also be used when a developer is involved. A separate series of bonds are issued to finance the developer’s real estate and building costs and the tax savings of the IRB can flow through to the ultimate user through a sublease.

The benefit of the remaining property tax exemptions can be passed on to the new owner or flow through a lease in the event of a sale or lease to a new user under certain qualifying conditions. City Council or County Commission must vote to induce an IRB, and the community does not lend its credit to an IRB. The company must secure its own purchaser of IRBs or the company can purchase its own IRB.

High Wage Jobs Tax Credit

Provides businesses with a tax credit equal to 10 percent of the combined value of salaries and benefits for each net new job paying a net taxable wage of at least $60,000 per year in the Albuquerque metropolitan area and other communities larger than 40,000 in population. Companies located in communities with a population less than 40,000 are eligible for the same tax credit for each net new job paying a net taxable wage of at least $40,000.

Qualified employers can take the credit for four years. The refundable credit can be applied against the modified combined tax liability of the taxpayer, including the state portion of the gross receipts tax, compensating tax and withholding tax. Excludes the local portion of the gross receipts tax. 


  • Net taxable wages, without company paid benefits, must equal at least $60,000 in an urban community or $40,000 in a rural area to qualify as a high wage job.
  • Net taxable wages include: hourly wage, bonus, salary, vacation, sick/holiday time.
  • Company must generate more than 50% of its sales outside of New Mexico or must be eligible for the Job Training Incentive Program.
  • Employer must be growing in employment greater than the year before.
  • Eligible employees cannot be relatives of the qualified employer or own more than 50% of the company.
  • Jobs must be occupied by an eligible employee for 48 weeks.

Rural Jobs Tax Credit

This credit can be applied to taxes due on (state) gross receipts, corporate income, or personal income tax. The maximum credit for each qualifying job is equal to 25% of the first $16,000 in wages paid for the qualifying job (may be taken at $1,000 per year for 4 years) in Tier 1 communities (population less than 15,000 in population). A qualifying job is a job filled by an eligible employee for 48 weeks in a 12-month qualifying period.  The credit may be carried forward for up to 3 years.  For more information go to GoNMBiz.

New Mexico Refundable Film Production Tax Credit

The state offers a 25 percent production refundable tax credit on all direct production and post production expenditures, including New Mexico crew, that are subject to taxation by the State of New Mexico. Eligible productions include feature films, independent films, television, national and regional commercials, video games, animation, webisodes, documentaries, and post-production (including "stand-alone" post production). There is no minimum expense requirement and no minimum shoot day requirement. There is a $50M rolling cap.

To learn more, visit New Mexico Film Office.

New Mexico Film Investment Loan Program

New Mexico offers a loan with participation in lieu of interest for up to $15 million per project (which can represent 100 percent of the budget) for qualifying feature film or television productions. Terms are negotiated. The following conditions must apply for qualification:

  • The budget must be least $1 million and a guarantor for the principal loan and distribution agreement must be in place.
  • 85 percent of the film must be shot in New Mexico, with 60 percent of the below-the-line payroll allocated to New Mexican residents.

Aircraft Maintenance or Remodeling Tax Deduction

Receipts maintaining, refurbishing, remodeling or otherwise modifying a commercial or military carrier over 10,000 lbs gross landing weight may be deducted from gross receipts.

Aircraft Manufacturing Tax Deduction

Receipts of an aircraft manufacturer or affiliate from selling aircraft or aircraft parts; services performed on aircraft or aircraft components; and aircraft flight support, pilot training or maintenance training services, may be deducted from gross receipts.

Space Gross Receipts Tax Credit

Businesses may deduct receipts from launching, operating, preparing, recovering space vehicles or payloads from a spaceport in New Mexico and also from the provision of research and development, testing and evaluation services for the U.S. Air Force operationally responsive space program. Tax credits are also available for research and development services sold or for resale to the U.S. Air Force.

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