New Mexico Incentives
The following is information from The New Mexico Film Commission. They have a 25% refundable tax credit for films shot in New Mexico.
They also have a program called the Film Crew Advancement Program where a production company is reimbursed 50% of a participant’s wages for up to 1040 hours physically worked by the qualifying crew member in a specialized craft position. This on-the-job training program is in addition to the 25% film production tax rebate.
New Mexico's competitive film credit, awe-inspiring locations and professional crew will assist us in making a cost-effective, high-quality film.
New Mexico Film Commission's Incentives
25% Refundable Film Production Tax Credit
Per statute, if your project is intended for commercial exploitation and exhibition, it is eligible to receive a 25% refundable tax credit on direct and post-production expenditures subject to state taxation. We are also excited to announce that a bill just passed in March that included language allowing an additional 5% credit on direct production expenditures for qualifying television series or on resident wages and fringes for productions that utilizes a sizeable soundstage for 10 or 15 days of principal photography. (The number of required days is based on the size of the project’s budget.)
There is no minimum budget or spend requirement. And New Mexico does not require submission of a distribution plan from the production company to take advantage of the film credit. There is no application fee and no pre-qualification. New Mexico’s direct qualifying expenditures include, but are not limited to, resident payroll (fringes included), non-resident per diem, rentals/expendables from vendors with local physical presence, as well as property rentals and location fees. Non-resident talent that have a management company, aka actor’s loan out, may also qualify for the credit through a personal business service (or “super loan out,”) often established by the payroll company, for up to a $5M tax credit. Payment for post-production services may also qualify when those services are rendered in New Mexico and are subject to state taxation.
After production, and upon submission of the tax application and backup documentation, the New Mexico Tax and Revenue Department conducts an internal review, free of charge, to determine the project’s approved claim amount per the qualifying expenditures (a 3 to 6 month process). As this is a fully refundable tax credit, the company files their state tax (or informational) return after the close of their taxable year to receive the check or deposit. The filing entity does not have to be based in NM and may not have other tax liability, yet may still file a return to receive the credit. The credit is not transferable or assignable. For projects that cross taxable years, a claim is submitted for each year in which expenditures occurred.
A credit claim of less than $2M per taxable year will be paid out immediately upon authorization of the filed tax return. A credit claim of $2M-$5M will be paid out in two payments: one immediately upon authorization of the filed return and the second twelve months later. A tax credit of $5M or more will be paid in three installments and requires an external CPA audit.
New Mexico allocates $50M each July 1 to expend on authorized credit claims. If the $50M has been expended in a given year, your company will still receive the credit; however, your (first) authorized claim will be paid at the beginning of the upcoming fiscal year (July 1).
For additional details, please view the links in the drop down under "Refundable Tax Credit" on the side menu and do not hesitate to contact us directly at 505-476-5600. We look forward to assisting you with your project.
Sincerely,
Nick Maniatis, Director
New Mexico State Film Office
Per statute, if your project is intended for commercial exploitation and exhibition, it is eligible to receive a 25% refundable tax credit on direct and post-production expenditures subject to state taxation. We are also excited to announce that a bill just passed in March that included language allowing an additional 5% credit on direct production expenditures for qualifying television series or on resident wages and fringes for productions that utilizes a sizeable soundstage for 10 or 15 days of principal photography. (The number of required days is based on the size of the project’s budget.)
There is no minimum budget or spend requirement. And New Mexico does not require submission of a distribution plan from the production company to take advantage of the film credit. There is no application fee and no pre-qualification. New Mexico’s direct qualifying expenditures include, but are not limited to, resident payroll (fringes included), non-resident per diem, rentals/expendables from vendors with local physical presence, as well as property rentals and location fees. Non-resident talent that have a management company, aka actor’s loan out, may also qualify for the credit through a personal business service (or “super loan out,”) often established by the payroll company, for up to a $5M tax credit. Payment for post-production services may also qualify when those services are rendered in New Mexico and are subject to state taxation.
After production, and upon submission of the tax application and backup documentation, the New Mexico Tax and Revenue Department conducts an internal review, free of charge, to determine the project’s approved claim amount per the qualifying expenditures (a 3 to 6 month process). As this is a fully refundable tax credit, the company files their state tax (or informational) return after the close of their taxable year to receive the check or deposit. The filing entity does not have to be based in NM and may not have other tax liability, yet may still file a return to receive the credit. The credit is not transferable or assignable. For projects that cross taxable years, a claim is submitted for each year in which expenditures occurred.
A credit claim of less than $2M per taxable year will be paid out immediately upon authorization of the filed tax return. A credit claim of $2M-$5M will be paid out in two payments: one immediately upon authorization of the filed return and the second twelve months later. A tax credit of $5M or more will be paid in three installments and requires an external CPA audit.
New Mexico allocates $50M each July 1 to expend on authorized credit claims. If the $50M has been expended in a given year, your company will still receive the credit; however, your (first) authorized claim will be paid at the beginning of the upcoming fiscal year (July 1).
For additional details, please view the links in the drop down under "Refundable Tax Credit" on the side menu and do not hesitate to contact us directly at 505-476-5600. We look forward to assisting you with your project.
Sincerely,
Nick Maniatis, Director
New Mexico State Film Office
25% Refundable Film Production Tax Credit has:
Receive a 25% Tax Credit on all direct production expenditure (which includes New Mexico crew) and expenditures for post production services that are subject to taxation by the State of New Mexico. Eligible productions include feature films, independent films, television, regional and national commercials, documentaries, animation, video games, webisodes, and post-production. Non-resident actors and on-camera stunt performers may also qualify.
Qualifying Expenditures
Post Production Services and the 25% Refundable Tax Credit
There are two ways post production services will qualify for the 25% Refundable Film Production Tax Credit : either a project is shot in another state or country, but the company uses a New Mexico Post Production facility or vendor for any of the post services, or a production that shoots in New Mexico also does the post here. The services must be rendered in New Mexico and subject to state taxation in either case. In essence, these services will qualify whether the company only does post in New Mexico (Stand-Alone Post Production) or does post work in NM after the production shoots in NM.
- No minimum budget requirement
- No minimum spend requirement
- No minimum shoot day requirement
- No minimum resident hire requirement
- No pre-qualifying
- No application fees
- No brokers needed
- $50M allocated each July for pay-outs (“rolling cap”)
- A dedicated “Film Unit” at the NM Tax & Rev Dept.
Receive a 25% Tax Credit on all direct production expenditure (which includes New Mexico crew) and expenditures for post production services that are subject to taxation by the State of New Mexico. Eligible productions include feature films, independent films, television, regional and national commercials, documentaries, animation, video games, webisodes, and post-production. Non-resident actors and on-camera stunt performers may also qualify.
Qualifying Expenditures
- Any of the following “direct production expenditures” made in New Mexico qualify:
- Expenditures in New Mexico directly attributable to the production of a film or commercial audiovisual product;
- Expenditures subject to taxation by the State of New Mexico;
- Expenditures that are not claimed by another taxpayer for their film production tax credit;
- Expenditures that do not exceed the usual and customary cost of the goods and services acquired when purchased by unrelated parties; the Secretary of Taxation and Revenue Department (TRD) may determine the value of the goods or services when the buyer and seller are affiliated persons or the sale or purchase is not an arm’s length transaction;
- Wages or salaries, fringe benefits or fees for talent, management, and labor to a person who is a New Mexico resident;
- Resident employee fringe benefits paid to a payroll company including pension, health & welfare, holiday, vacation; workers compensation insurance will qualify only if purchased through a New Mexico based agent;
- Payment to a personal services business for the services of a non-resident performing artist (actors and on-camera stunt performers only) if the personal services business pays gross receipts tax in New Mexico on the portion of those payments qualifying for the tax credit and deducts and remits withheld income tax pursuant to Subsection I of Section 7-3A-3 NMSA 1978 or causes to be deducted and remitted income tax at the maximum rate in New Mexico on the portion of those payments qualifying for the tax credit.
- As applied to direct production expenditures for the services of performing artists, the film production tax credit authorized by this section shall not exceed five million dollars ($5,000,000) for services rendered by all performing artists in a production for which the film production tax credit is claimed, meaning collectively, actors’ salaries, including tax, up to $20 million are eligible.
- Any of the following expenses qualify when provided by a New Mexico vendor that has a physical presence in New Mexico [which includes employment by the vendor of a New Mexico resident(s) as that term is defined in the Income Tax Act]:
- Costs of the story and scenario to be used for a film;
- Costs of set construction and operations, wardrobe, accessories, and related services;
- Costs of photography, sound synchronization, lighting, and related services;
- Costs of editing and related services;
- Rental of facilities and equipment (including location fees);
- Leasing of vehicles: not including the chartering of aircraft for out-of-state transportation, however including New Mexico-based chartered aircraft for in-state transportation directly attributable to the production shall be considered a direct production expenditure provided that only the first one hundred dollars ($100) of the daily expense of leasing a vehicle for passenger transportation on roadways in the state may be claimed;
- Food and lodging: provided that only the first one hundred fifty dollars ($150) of lodging per individual per day is eligible to be claimed;
- Commercial airfare if purchased through a New Mexico-based travel agency or company for travel to and from New Mexico or within New Mexico that is directly attributable to the production: scouting expenditures prior to production will qualify so see bullet above when making scouting arrangements;
- Insurance coverage and bonding if purchased through a NM-based insurance agent, broker or bonding agent;
- Post-production expenditures for services that are directly attributable to the production of a commercial film or audiovisual product, that are performed in New Mexico and that are subject to taxation by the State of New Mexico;
- Other approved direct costs of producing a film in accordance with generally accepted entertainment industry practices.
Post Production Services and the 25% Refundable Tax Credit
There are two ways post production services will qualify for the 25% Refundable Film Production Tax Credit : either a project is shot in another state or country, but the company uses a New Mexico Post Production facility or vendor for any of the post services, or a production that shoots in New Mexico also does the post here. The services must be rendered in New Mexico and subject to state taxation in either case. In essence, these services will qualify whether the company only does post in New Mexico (Stand-Alone Post Production) or does post work in NM after the production shoots in NM.
Film Crew Advancement Program
FCAP is an incentive for production companies to help create more job opportunities for New Mexican film and television crew professionals. A production company is reimbursed 50% of a participant’s wages for up to 1040 hours physically worked by the qualifying crew member in a specialized craft position. This on-the-job training program is in addition to the 25% film production tax rebate.
As an example, a New Mexican Grip who is ready to move up to the Best Boy position and has no credits as a Best Boy or only one credit as a Best Boy from a film or television project (that had a budget over one million) would qualify. The Key Grip would be that crew member’s mentor.
Step One:
Fill out the Film Production Company Registration Form (if you have already applied for the 25% Tax Rebate or Film Investment Loan program and have already filled out this form, please skip to Step Two).
Step Two:
As soon as the production has opened offices in New Mexico, submit the FCAP Application Part I and New Mexico W-9 form to the NMFO Workforce Development Programs Manager via or email to Rochelle Bussey.
As an example, a New Mexican Grip who is ready to move up to the Best Boy position and has no credits as a Best Boy or only one credit as a Best Boy from a film or television project (that had a budget over one million) would qualify. The Key Grip would be that crew member’s mentor.
Step One:
Fill out the Film Production Company Registration Form (if you have already applied for the 25% Tax Rebate or Film Investment Loan program and have already filled out this form, please skip to Step Two).
Step Two:
As soon as the production has opened offices in New Mexico, submit the FCAP Application Part I and New Mexico W-9 form to the NMFO Workforce Development Programs Manager via or email to Rochelle Bussey.