Also referred to as the Baa Program, the State of New Mexico
Investment Council is authorized to invest up to $20 million in a debt
instrument rated Baa or better, or secured by a letter of credit from an
institution rated A or better. Proceeds may be used to purchase land,
building and equipment. The yield on the investment is set at the
treasury yield for a comparable maturity plus 50 to 100 basis points,
depending on the financial condition of the borrower and the nature of
In New Mexico Real Property-Related
The State of New Mexico Investment Council is authorized to invest in
participations of up to 80% in a loan by a financial institution to a
start-up, expanding or relocating corporation.
Eligible uses of the funds include the purchase of land and attached
buildings, and refinancing existing debt if the loan is for expansion
purposes. Loan amounts may range from $500,000 to $2,000,000. Loan
maturities are not less than five years or more than 15 years.
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A tax credit in an amount equal to the gross receipts tax rate or the
compensating tax rate is applied to the value of capital equipment
purchased specifically for use in an eligible call center in New Mexico.
The total value over three years of the capital equipment purchased must
total at least $250,000 if the call center is located in a rural
community and $1 million if the call center is not located in a rural
Gross Receipts Tax Exemption
An exemption of the receipts from the provision of wide-area
telephone service (WATS) and private communications service from the
interstate telecommunications gross receipts tax of 4.25%. Wide-area
telephone service means a telephone service that entitles a subscriber
to either make or receive large volumes of communications to or from
persons in specified geographical areas. Private communications services
are defined as dedicated service for individual customers entitled to
exclusive or priority use of communication channels between a location
within New Mexico and one or more locations outside the state.
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Intrastate Transportation and Services in
Receipts of a public distribution warehouse center from handling,
storage, finished goods mixing, physical distribution, drayage or
packaging of property or any other accessorial services on property that
has moved or will move in interstate or foreign commerce, including
subsequent or related intrastate transportation of that property by a
carrier provided or contracted for by the distribution warehouse center,
may be deducted from gross receipts. This deduction is available for
both in-house and contract handling.
A credit against corporate income tax is allowed for certain child
care services provided or paid for by a employer for employees' children
for 30% of eligible costs, up to $30,000. Unused credit amounts may be
carried forward for three years.
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Personal and corporate tax credits are provided for a corporation
that employs long-term family assistance recipients, i.e. New Mexico
Works Act, TANF or AFDC in high unemployment counties and piggybacks on
the federal credit. The refundable tax credit amounts to 17.5% of the
first $10,000 paid in the second year's wages, assuming that
more of the eligible employee's wages for that tax year were paid by the
For Certain Medical
and Health Care Services
A gross receipts tax deduction is provided to a corporation for
receipts from payments received by board certified doctors and
osteopaths from the federal government for provision of certain services
to Medicare beneficiaries. This deduction is phased in over three years.
The unemployment compensation rates for a corporation are determined
through an economic model taking into account the contributions paid,
benefit changes, unemployment compensation account balances, average
annual taxable payroll and reserve ratios.
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The Industrial Development Training Program provides training funds
to a corporation or institution to prepare New Mexico residents for
full-time employment. Training costs are reimbursed at up to 75%
in a metropolitan area) of the wage rate per hour paid to the
trainee. When classroom training is conducted by a public training
institution, 100% of the training cost is reimbursed to the institution.
The Job Training Partnership Act provides funds for job training to a
corporation to prepare employees, both youth and adult, for productive
employment. Training costs are reimbursed at up to
costs associated with hiring and training JTPA eligible employees.
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Community Development Block Grant Program (CDBG):
A grant may be provided to a local government to finance
infrastructure improvements; acquisition of land, building, machinery
and equipment; construction of facilities; and working capital. The
maximum loan is $400,000. The interest rate and term are negotiable.
There are matching requirements and a percentage of low to moderate
income employees must be hired.
Community Development Revolving Loan Fund:
The New Mexico Economic Development Department may provide a loan to
a local government on behalf of a corporation. Eligible activities
include infrastructure improvements; acquisition of land, building,
machinery and equipment; and construction of facilities. The maximum
loan is $250,000 with no minimum. The interest rate is fixed at one half
the Treasury bond equivalent rate and the maximum term is 10 years. The
funds must be used only to improve publicly-owned property.
New Mexico Finance Authority:
The New Mexico Finance Authority may provide financing to a local
government on behalf of a corporation for infrastructure projects
including, but not limited to: buildings, water sewage and waste
disposal systems, streets; municipal utilities and parking facilities.
There are no limits on loan amounts. Interest rates are tied to bond
market rates and average 6%. The maximum term is 20 years.
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New Mexico offers a corporation three options for reporting corporate
income tax that are known as the "ladder".
Separate Corporate Entity. Under this method of reporting, the
corporation files with New Mexico as though the corporate entity filed
as a separate entity for federal purposes, regardless of how the
corporation actually did file for federal purposes.
A corporation filing as a separate entity with New Mexico must submit
a copy of its federal Form 1120 or other applicable form following all
federal rules for determination of income. If a corporation is included
in a federal consolidated return, it must submit a pro-forma 1120
separate return following all appropriate rules for the determination of
Combination of Domestic Unitary Corporations. Two or more
corporations engaged in a unitary business may elect to report the
combined income of all members of the unitary business whether or not
the unitary business filed a federal consolidated return.
Unitary corporations means two or more integrated corporations that
are more than 50% owned and controlled by the same person and for which
at least one of the following conditions exists:
1. There is unity of operations evidenced by central purchasing,
advertising, accounting or other centralized services;
2. There is a centralized management or executive force and
centralized system of operation; or
3. The operations of the corporations are dependent on or
contribute property or services to one another individually or as a
A domestic unitary group of corporations that reports using the
combination method must prepare and submit a simulated federal return
using the appropriate federal Form 1120 or other applicable form
following all federal rules for consolidation except those rules
relating to ownership. All unitary corporations must be included in the
return, including those not engaged in business in New Mexico.
Federal Consolidated Group. A corporation filing a federal
consolidated return may elect to report the income of all the affiliated
corporations included on the federal return.
A consolidated group includes a parent corporation and its
subsidiaries, even corporations that are non-unitary. If the taxpayer
elects to file a consolidated New Mexico income tax return, it must be
filed on the same basis as the federal consolidated return, applying
property, payroll, and sales factors to the total consolidated group
including the non-unitary corporations.
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