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Investment Tax Credit for Manufacturers (Investment Credit Act)
Manufacturers may take a credit equal to 5% of the value of qualified equipment imported and put into use in a manufacturing plant in New Mexico, provided the manufacturer meets the criteria of hiring additional workers to earn the credit, as follows:
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For Claims
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1 new worker employed for each
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0-$30,000,000:
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$500,000 qualified equipment;
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Over $30,000,000
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$1 million in qualified equipment.
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The credit may be claimed for equipment acquired under an IRB. This is a double benefit because no gross receipts or compensating tax was paid on the purchase or importation of the equipment.
The credit is taken through the CRS-1 form. This is the form on which state and local gross receipts, compensating and withholding taxes are paid to the state. The manufacturer simply reduces its payment of those state taxes (by as much as 85% per reporting period) until the amount of investment credit is exhausted. There also are provisions for issuing a refund when the credit balance falls under $500,000. The credit does not apply against local gross receipts taxes, so the full amount of those taxes remains due every month. Excluded from the manufacturer definition are construction, farming, certain types of power generation and processing natural resources and hydrocarbons.
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