Reduce Capital Expenditures
Identifying Resources to
Local Economic Development Act (LEDA)
Under the Local Economic Development Act (LEDA) (5-10-1 to 5-10-13 NMSA 1978) the New Mexico Economic Development Department (NMEDD) is granted authority to administer grants to Local Governments (Municipality and/or County); to assist expanding or relocating businesses that are Qualified Entities that will stimulate economic development and produce public benefits pursuant to LEDA. Additional consideration is given to project that demonstrate:
- Significant Community Impact and Support;
- Rural and Underserved Areas of New Mexico;
- Increased Wages and Job Creation;
- Significant New Capital Investment; and
- Environmentally Sustainable Outcomes.
- Final Application Round Deadline: December 7, 2021
Industrial Revenue Bond (IRB)
Industrial revenue bonds (IRBs) are the pre-eminent economic development tool in New Mexico. They are, fundamentally, tax subsidies. Depending on the type of IRB project, the holder of the bonds, and other factors, the subsidies may be one or more of (i) a property tax exemption, (ii) a gross receipts tax deduction (and/or compensating tax exemption), (iii) an exemption of bond interest from New Mexico income taxation, and (iv) an exemption of bond interest from federal income taxation.
Consumables Gross Receipts Tax Deduction for Manufacturers
Under Section 7-9-46 NMSA 1978, a seller may deduct receipts from sales to a manufacturer of tangible personal property that becomes and ingredient or component part of a manufactured product, or is a consumable and is consumed in the manufacturing process. The deduction for sales of tangible personal property consumed in the manufacturing process is 100% on or after January 1, 2017.
Investment Tax Credit
The Investment Credit Act provides a credit for certain equipment purchased or brought into New Mexico in connection with a manufacturing operation. The credit does have a specific employment requirement that is associated with the cost of the equipment being claimed. For applications submitted on or after July 1, 2020 but before July 1, 2030:
- You must have employed one additional full-time employee for every $750,000 (or portion of that amount) in value of qualified equipment for which the credit is claimed on the application, up to a value of $30 million, and
- You must have employed one additional full-time employee for every $1,000,000 (or portion of that amount) in value of
qualified equipment over $30 million.