State Incentives
New Mexico offers a wide range of incentives for new and established businesses. In addition to the key listings below, check our these links to the NM Economic Development Department website.
Local Economic Development Act (LEDA)
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. All grants are funded on a strictly reimbursement basis. The City of Roswell has passed LEDA.
EDD targets economic development projects that comply with all legal facets of 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
• Environmentally Sustainable Outcomes.
Implementation:
The Department has designed and implemented a systematic, transparent approach to prioritizing projects that meet the over-arching goals of NMEDD for financial evaluation and structuring. These goals provide guidance for funding on project impact qualifications, application review criteria, and concentration factors.
Qualifying Entity:
Means a corporation, Limited Liability Company, partnership, joint venture, syndicate, association or other person that is one or a combination of two or more of the following:
• An industry for the manufacturing, processing or assembling of agricultural or manufactured products;
• A commercial enterprise for storing, warehousing, distributing or selling products of agriculture, mining or having been manufactured; or.
• An “Economic Base Employer”, which is defined as an employer who is deemed eligible for in-plant training assistance by the Economic Development Department’s Job Training incentive Program (Section 21-19-7 NMSA 1978).
Non-Qualifying Entities:
• Any enterprise for the sale of goods or commodities at retail or for distribution to the public of electricity, gas, water or telephone or other services commonly classified as public utilities;
• A business in which all or part of the activities of the business involves the supplying of services to the general public or to governmental agencies or to a specific industry or customer, but not including businesses primarily engaged in the sale of goods or commodities at retail.
Program Application Requirements:
Access to the on-line application portal is extended to a Qualified Entity after an initial review of program eligibility and includes:
• Demonstration of Financial Soundness and Readiness to Proceed
• A signed Release/Authorization Form, including certification that the Qualified Entity is current with all New Mexico and Federal obligations
• Project Scope of Work, including use of requested funds
• 3 years Financial Statements and/or Pro Forma, along with appropriate documentation (purchase agreements of land, loan approval, term sheets, infrastructure order, etc.)
• Funding Sources and uses
• Job creation and salary/benefit information
• Project Capital Investment; and
• Completed Economic Impact data sheet.
For an overview, qualifications, and requirements, click here. LEDA Overview.png)
Jobs Training Incentive Program (JTIP)
New Mexico has one of the most generous training incentive programs in the country. JTIP funds classroom and on-the-job training for newly-created jobs in expanding or relocating businesses for up to 6 months. The program reimburses 50-85% of employee wages.
The New Mexico State Legislature created JTIP, formerly known as the Industrial Development Training Program, or “in-plant training,” in 1972. Since then, JTIP has supported the creation of more than 1,600 training projects and the creation of nearly 47,000 jobs.
Who Qualifies
Eligibility for JTIP funds depends on the company’s business, the role of the newly-created jobs in that business, and the trainees themselves. Please read through the eligibility guidelines (see Policy and Procedures below) and then fill out the Eligibility Questionnaire to begin the JTIP application process. A member of JTIP staff will contact you to determine your company’s eligibility and discuss the program in detail.
Company Eligibility
Businesses eligible for consideration include:
• Companies that manufacture or produce a product in New Mexico
• Non-retail service companies that export a substantial percentage of services out of state (50% or more of revenues and/or customer base). Software development companies, customer support centers and product testing laboratories are three examples of businesses that have qualified in this category
• Certain green industries
• The company must be financially sound and must be creating new jobs as a result of expansion or relocation to the state of New Mexico.
*Businesses in certain industries are not eligible. Some examples are agriculture, construction, extractive industries, gambling, health care and retail.
Job Eligibility
Jobs eligible for funding through JTIP must be:
• Full time (minimum of 32 hours per week)
• Year-round
• Directly related to the creation of the product or delivery of the service. (1 in 5 positions applied for may be outside product/service creation). Typical examples include marketing, sales, and general administration
• Manufacturing examples: production worker, electronic equipment assembler, first line supervisor, industrial engineering technician, R&D scientists, and engineers
• Service examples: customer service representative, environmental engineering technician, web developer, software developer
• Intern positions may be eligible
Trainee Eligibility
To be eligible for funding under JTIP, trainees must:
• Be new hires to the company
• Have been residents of the state of New Mexico for at least 1 year at any time prior to employment. Trainees that do not meet the one-year residency requirement may be eligible if hired into high-wage jobs.
• Not have left high school in the 3 months prior to employment, unless they have graduated or completed a HSE (High School Equivalency)
Reimbursable Training Costs
JTIP funds 3 types of training:
1. Custom classroom training at a public educational institution
2. Structured on-the-job training (OJT)
3. A combination of classroom training and OJT
The following are eligible for reimbursement:
Additional wage reimbursement may not exceed 15% above the standard rates (50-75%). Companies may combine one of the three conditions above with the additional 5% wage reimbursement for high-wage positions and an additional 5% for JTIP approved employers that utilize business support services through the recognized New Mexico Workforce Connection offices across the state or through other independent human resource support service providers that help small businesses develop successful recruitment strategies to grow and retain their workforce may be eligible for an additional 5% wage reimbursement above the standard rates.
Expenses are reimbursed after training is completed.
Click here to learn more. JTIP Program
NM Collateral Assistance Program (CAP)
As part of the American Rescue Plan Act (ARPA), signed into law by President Biden in 2021, Congress has allocated $10 billion to increase small businesses access to equity and debt capital through the State Small Business Credit Initiative (SSBCI 2.0) program.
Program Highlights:
• Cash support up to 50% of the principal based on qualifying criteria for under collateralized loans.
• Preference is placed on businesses located in rural areas, minority-owned, veteran-owned, job creation, generates income from outside of the state.
• Borrowers must request collateral assistance through their lender – they cannot apply for support directly from EDD.
• Prior to issuance of a loan, the participating lender submits a CAP 2.0 request to EDD.
• Once approved by EDD, CAP 2.0 approval is sent to Lender. This commitment can be called upon for up to 90 days after issuance.
• Once the loan is finalized, EDD funds the CAP 2.0 contribution. A separate account is opened for each loan that is enrolled in CAP.
• Within 15 business days of loan closing, the lender submits the final loan information and notifies NMEDD FDT the loan was funded.
Eligible borrowers must meet these criteria:
• Business purpose is one of the industries listed in the North American Industry Classification Systems (NAICS) codes list.
• Business is considered a “small business” under the U.S. Small Business Administration.
• Employs 750 employees or fewer full-time equivalents.
• The business is located in New Mexico.
Loan proceeds can be used toward the following:
• Any tangible or intangible asset purchase, including; construction, renovation or improvements of an eligible place of business
• Start-up costs
• Working capital
• Franchise fees
• Equipment
• Inventory
• Bridge loans needed prior to the borrower obtaining permanent financing or support
Click here to more information and eligibility criteria. NM Collateral Assistance Program
NM Tax Incentives
New Mexico has 20 different tax incentives (link below). We encourage industries moving to Roswell to look at 1) Angel Investment Tax Credit, 2) High Wage Jobs Tax Credit, 3) Investment Tax Credit for Manufacturers, 4) Rural Jobs Tax Credit, and 5) Technology Jobs and Research and Development Tax Credit— but many others may apply to your industry.
For a breakdown on each incentive, click here. NM Industry-Specific Tax Incentives
Investment Tax Credit for Manufacturers
Administered by NM Taxation & Revenue Department
Manufacturers may take a credit against gross receipts, compensating or withholding taxes equal to 5.125% of the value of qualified equipment when the following employment conditions are met:
• For every $500,000 of equipment, 1 employee must be added up to $30 million; and
• For amounts exceeding $30 million, one employee must be added for each $1 million of equipment
The credit may (also) 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 manufacturer simply reduces its tax payment to the state (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.
• New Mexico Investment Credit Application
• Investment Credit Claim Form
Rural Jobs Tax Credit
Administered by NM Taxation & Revenue Department
This credit can be applied to taxes due on (state) gross receipts, corporate income, or personal income tax. A Rural Area in New Mexico excludes Albuquerque, Corrales, Farmington, Las Cruces, Los Alamos County, Los Ranchos, Rio Rancho, Santa Fe, or Tijeras, or any area within a ten-mile zone around any of these municipalities.
Company eligibility:
• Companies that manufacture or produce a product in New Mexico
• Non-retail service companies that export a substantial percentage of services out of state (50% or more revenues and/or customer base)
• Certain green industries
The rural area is divided into 2 tiers:
• Tier 2 = Non-metro area municipalities that exceed 15,000 in population: Alamogordo, Carlsbad, Clovis, Gallup, Hobbs, and Roswell
• Tier 1 = Everywhere else in a rural area
The maximum tax credit amount with respect to each qualifying job is equal to:
• Tier 1: 25% of the first $16,000 in wages paid for the qualifying job (may be taken at $1,000 per year for 4 years)
• Tier 2: 12.5% of the first $16,000 in wages paid for the qualifying job (may be taken at $1,000 per year for 2 years)
A qualifying job is a job filled by an eligible employee for 48 weeks in a 12-month qualifying period.
The credit may be carried forward for up to 3 years.
• Rural Jobs Tax Credit Application 2015
• Rural Jobs Tax Credit Certificate of Eligibility 2015
• Rural Jobs Tax Credit Notice of Transfer
• Rural Job Tax Credit Claim Form (Rev. 2021)
