State-by-state production incentives
New Mexico
| New Mexico | |
| Incentive Type | Refundable tax credit |
| Incentives Highlights | 25% refundable tax credits on qualifying in-state spend, including resident cast and crew. Non-resident performing artists paid via a super-loan out qualify, but GRT of 5.125% and NM wh tax of 4.9% must be paid to the state. NM also offers a Film Investment Loan (with interest) for up to $15M for qualifying projects. |
| Eligible Projects | Films, television pilots, series, commercials, plus digital media |
| Minimum Spend | None |
| Production Cap or Annual Cap | $20 million aggregate cap on performing artists wages per project. $50 million annual rolling cap; projects must file NM tax returns; refundable tax credits of up to $2 million are payable with first tax return, tax credits of $2-5 million are payable over two equal installments, and tax credits exceeding $5 million will be paid in 3 equal installments over a 24 month period. |
| Application/Reporting Requirements | Productions must meet eligibility requirements; post notice and pay all in-state vendors; be audited by the state, and file tax returns with the state, in order to receive the refundable tax credit. |
| Loan-Out Reg Required? | Yes |
| CPA Audit? | No |
New Mexico Film Office
Nick Maniatis, Director
nick@nmfilm.com
t: (800) 545-9871
t: (505) 476-5604
f: (505) 476-5601
www.nmfilm.com
OVERVIEW
New Mexico offers several incentives programs, attracting both studio and independent projects.
Three programs are available: a 25% refundable tax credit, a Film Investment Loan, and a Film Crew Advancement Program/Incentive.
The 25% credit applies to resident cast and crew, and in-state rentals, purchases and services that are subject to taxation in NM. Payments for non-resident performing artists (actors and stunt performers), providing services in NM, will qualify if paid via a “super loan-out” company which pays gross receipts tax (“GRT”) in New Mexico on the payments and the performing artist receiving payments pays New Mexico income tax. The state withholding tax payment of 4.9% must be withheld by the payroll company for all talent.
Because the 5.125% GRT is eligible for the credit, the credit for non-resident performing artists is reduced to 21.15% if structured through a non-New Mexico “super loan-out.” The credit related to performing artists’ salaries is capped at $5 million collectively for ALL performing artists in a production. In other words, actors’ collective salaries (including tax) up to $20 million qualify for the credit, in addition to other qualifying costs.
The Governor has signed a $50 million annual rolling cap for the program. Refundable credits up to $2 million will be paid out immediately when the state audit is completed, and the payment authorized. Credits over $2 million but less than $5 million will be paid out in two equal payments; the 2nd payment due 12 months after the first payment is issued. Credits exceeding $5 million will be paid in three equal payments over a 24 month period. A 3rd party CPA audit is required if payments exceed $5 million. There is no per production cap or minimum spend requirement. Non-resident crew does not qualify, but their housing and per diems do.
DETAILS
25% Production Tax Credit. This is a 25% refundable tax credit on all direct production expenditures, including New Mexico resident labor, that are subject to taxation by the State of New Mexico.
Pre-production, production, and post-production for feature films, short films, television, national and regional commercials, documentaries, video games, animation, webisodes, infomercials and music videos intended for commercial exploitation qualify for the rebate. Stand-alone post also qualifies.
Direct production expenditures include payments of wages, fringe benefits (pension) or fees for talent, management, or labor for a person who is a resident of New Mexico for purposes of the Income Tax Act.
Costs of goods and services necessary for the production of the film qualify, if purchased from a New Mexico vendor and subject to New Mexico tax. Buying services may not be used; a vendor may order items from out-of-state that are not available in NM, but the vendor must maintain an inventory of similar items, e.g., out-of-state camera equipment will not qualify if ordered by the caterer.
Post-production expenses qualify if performed in New Mexico and are subject to taxation by the state of New Mexico.
Costs that do not qualify include expenditures for advertising, marketing, and distribution; purchases made on the internet unless the seller is located in NM; federal/state unemployment tax, FICA, workers compensation tax; payments to federal/state government, including permits and postage; FedEx/UPS packages (unless sent from
New Mexico); purchases made on Native American tribal lands, including gas stations, hotels, restaurants, etc. located on these lands; and, cell phone reimbursements if the billing address is outside New Mexico.
The production company may apply all or a portion of the tax credit against a personal or corporate income tax liability. If the credit exceeds the production company’s tax liability, the excess will be refunded.
Film Investment Loan Program – This program is managed by the State Investment Council (“SIC”). The former zero percent interest loan program has been replaced with interest bearing loans subject to SIC approvals. Minimum loans are $500,000 with a maximum of $15M, interest is currently national prime plus 1.5%, with payback terms not to exceed two years. Qualified projects must have a distribution agreement in place, post a completion bond and 75% of the production crew must be NM residents.
Film Crew Advancement Program/Incentive. A 50% wage reimbursement for on-the-job training of New Mexico residents in advanced below-the-line crew positions. New Mexico keys and supervisors are required as mentors.
New Mexico is a union state with a substantial crew base. Albuquerque Studios is located only a few minutes from the Albuquerque airport.
The website includes a searchable crew directory, location database and links to production services, equipment, facilities and supplies available in the state.