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Double Weight Sales Factor
A corporation (or family of corporations filing together) with income from sources within New Mexico as well as from sources outside the state, apportions the income based on a three-factor formula. New Mexico taxes the total corporate income times the average proportion of corporate sales, payroll and property in New Mexico. The 3 factors (sales, payroll and property) have equal weight (33.3 percent each) in the formula. For a limited time (through the year 2010) manufacturers may elect to use a modified formula which gives the sales factor a 50 percent weight, reducing the other two to 25 percent apiece. The sales factor now has twice the significance of the other two, thus, the “double-weighted sales factor formula.”
For purposes of electing the four-factor apportionment method, “manufacturing” excludes construction, farming, power generation, and processing of natural resources, while allowing certain natural-gas-fired, wholesale power plants to qualify. The taxpayer, having elected to use the double-weighted formula, must use it for at least three consecutive years.
Industrial Revenue Bonds
New Mexico communities can issue IRBs to exempt companies from property taxes on land, buildings, and equipment. Companies creating new business facilities can receive a property tax exemption for up to 20 years. In 2004, Albuquerque’s Intel facility and the new Monarch Litho printing plant in Santa Teresa were both able to expand their facilities by using IRBs.
The gross receipts tax is New Mexico's version of a sales tax. Sales of tangible personal property (other than construction materials) to governments are deductible from this tax. Similarly, importation of tangible personal property for use by governments is also exempt. When the property is purchased with proceeds of an industrial revenue bond, the government unit issuing the IRB takes title to the property, whether purchased locally or imported. Accordingly, purchases of machinery, office equipment, furniture and similar tangibles as part of an IRB project are not taxed. Tangible personal property (other than building materials and related construction services) purchased with IRB proceeds is also included.
Manufacturers Investment Tax Credit
(Investment Credit Act)
Manufacturers may take a credit equal to 5percent 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:
| For Claims |
1 new worker employed for each |
| 0-$30,000,000: |
$500,000 qualified equipment; |
| Over $30,000,000 |
$1 million in qualified equipment |
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 85percent 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.
New Mexico 9000
In September of 2004, our state’s unique, low-cost ISO 9000 certification program won
first place as most innovative state program from the Council of State Governments—WEST.
Through New Mexico 9000, businesses may obtain IS0 9000 certification on a sliding scale
costing $1,000 to $6,000--compared with as much as $120,000 by conventional means. Also,
the New Mexico 9000 process takes only one year.
New Mexico 9000 is an alliance of the New Mexico Economic Development Department,
Honeywell Federal Manufacturing & Technologies, Los Alamos National Laboratory,
and Sandia National Laboratories.
Trained professionals with extensive experience in ISO implementation will conduct
17 three-hour workshops including interpretation of the standard, ISO 9001:2000,
procedure writing, and consulting on business-specific ISO compliance issues.
Compare the cost of the New Mexico 9000 workshops with the cost of becoming ISO compliant on your own:
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New Mexico 9000 |
On Your Own |
| Fees: |
$1,000 to $6,000,
based on gross receipts |
$40,000 to $120,000 |
| Timeframe: |
One year |
1 to 3 years |
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