Tax Credits, Exemptions & Deductions
DESCRIPTION:
- Tax credits allow the holder to apply credit against taxes owed. (i.e. sales taxes, income taxes, property taxes and use taxes).
- Some tax credits (i.e. low-income housing tax credits) can be sold to others to raise equity.
- Tax exemptions eliminate a taxpayer's obligation to pay taxes for a certain amount.
- Tax deductions reduce the amount of reported taxable income by which tax percentages are figured against, and in this way, reduces the amount of tax paid is reduced.
FUNCTION:
- The result of any of these tax incentives is an increase cash flow attributable to the project.
- These incentives are frequently used to raise equity in real estate development projects because they produce a stable source of project-related revenue.
- Also, the incentives may attract equity owners who are more interested in the credits, exemptions, and deductions than in the cash flow generated by the project.
QUALIFICATION AND USE CRITERIA:
- Projects receiving these special tax credits, exemptions, and deductions must create or retain jobs, stimulate investment in eligible real property, improvements, machinery or equipment; preserve historic buildings, create low-income housing, or provide other designated public benefits.
PROGRAM STRUCTURE:
- The incentives are rationed by rules and/or negotiation, depending upon the crediting authority.
- Such incentives are popular in designated improvement areas such as enterprise zones where they are often used in conjunction with other enhancements.
DOWNLOADABLE DOCUMENTS (PDF):
- Affordable Housing Tax Credit Act
- Biomass-Related Equipment Tax Deduction
- Federal Historic Preservation Tax Credit Program
- Health Facility Construction Gross Receipts Tax Deduction
- Health Related Property Tax Exemptions for Projects Financed by an IRB, Pollution Control Bond, or an Economic Development Bond Project
- Hospital Funding Mill Levy & Gross Receipts Tax
- Intergovernmental Coal Severance Tax Credit
- Intergovernmental Production Equipment Tax Credit
- Jet Fuel Gross Receipts Tax Deduction
- Job Mentorship Tax Credit
- Low-Income Housing Tax Credit Program (LIHTC)
- Mortgate Finance Authority (MFA) Housing Tax Credits - Allocations and Compliance
- New Mexico 27J Exemption
- New Mexico Agricultural Business Tax Deductions and Exemptions
- New Mexico Aircraft Maintenance or Remodeling Tax Deduction
- New Mexico Child Care Corporate Tax Credit
- New Mexico Compensating Tax Exemption
- New Mexico Cultural Property Preservation Tax Credit and Refund
- New Mexico Film Production Tax Credit
- New Mexico Filmmaker Gross Receipts Tax Deduction
- New Mexico High-Wage Jobs Tax Credit
- New Mexico Intergovernmental Business Tax Credit
- New Mexico Interstate Telecommunications Gross Receipts Tax Exemption
- New Mexico Investment Credit Act
- New Mexico Military Acquisition Program Tax Deduction
- New Mexico Property Tax Exemption
- New Mexico Research and Development Small Business Tax Credit
- New Mexico Rural Jobs Tax Credit
- New Mexico Rural Software Development Gross Receipts Tax Deduction
- New Mexico Technology Jobs Tax Credit
- New Mexico Welfare-to-Work Tax Credit
- Solar Market Development Income Tax Credit
- State Income Tax Incentive Program (For Historic Preservation)
- Texas-Mexico Border Residents' Tax Exemption
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