NM Manufacturing Investment Tax Credit

NM Manufacturing Investment Tax Credit

Offers New Mexico manufacturers a tax credit on qualifying imported equipment tied to job and payroll expansion.

Eligibility · United States · US-NM

The New Mexico Manufacturing Investment Tax Credit, formally known as the Investment Credit under the Investment Credit Act (NMSA 1978 §§7-9A-1 through 7-9A-11), is a non-refundable state tax credit administered by the New Mexico Taxation and Revenue Department (TRD) Business Credit Audit Team. The program reduces the effective cost of capital equipment for New Mexico manufacturers by crediting 5.125% of the value of qualified manufacturing equipment imported into New Mexico and placed into use in a manufacturing operation. The credit offsets gross receipts tax, compensating tax, or withholding tax owed by the manufacturer. Where the equipment purchase is not subject to gross receipts or compensating tax — for example, equipment purchased from out of state without incurring compensating tax — the 5.125% rate is applied directly to the equipment value.

Eligibility is restricted to taxpayers classified as manufacturers with a plant located in New Mexico. Equipment must be used directly and exclusively in a manufacturing operation to qualify; general business equipment does not satisfy this requirement. An employment trigger is required: the manufacturer must hire additional workers to earn or fully unlock the credit, with the ratio of required new hires to equipment cost determined by statute thresholds in the Investment Credit Act. Approved credit not used in the year of claim may be carried forward to subsequent reporting periods. There is no annual statewide cap on aggregate credit amounts, making the program open to manufacturers of any scale.

The program is active on a rolling, per-equipment-purchase basis — there is no competitive application cycle or annual deadline. Manufacturers submit claims through TRD's Business Credit Audit Team (TRD-BusinessCredit@tax.nm.gov). The credit stacks with the Technology Jobs and R&D Tax Credit and the Job Training Incentive Program (JTIP) administered by New Mexico Economic Development Department, making it part of a layered incentive package commonly used by manufacturers expanding New Mexico operations.