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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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