Updated August 2019
New Mexico's 25% tax credit applies to:
Regional + National + Internet Commercials
Stand-Alone Post Production (meaning you can shoot your film in another state or country, but if you do any post-production in New Mexico, those post-production expenditures will qualify)
New Mexico’s additional 5% tax credit applies to all qualifying New Mexico expenditures, including New Mexico resident crew and nonresident performing artists, on the following production types:
PILOTS intended to shoot in New Mexico upon pickup
TELEVISION SERIES with an order for at least six episodes and the New Mexico budget for each of the episodes is $50K or more
FEATURE FILMS that use a Qualified Production Facility (e.g. soundstage, western set)
PRODUCTIONS THAT FILM IN A “RURAL AREA”
WHAT IS A “QUALIFIED PRODUCTION FACILITY” (QPF)?
A “qualified production facility" means a building, or complex of buildings, building improvements and associated back-lot facilities in which films are or are
intended to be regularly produced and that contain at least one of the following:
(1) SOUND STAGE with contiguous floor space of at least seven thousand square feet and a ceiling height of no less than eighteen feet; or
(2) STANDING SET that includes at least one interior, and at least five exteriors, built or re-purposed for film production use on a continual basis and is located on at least fifty acres of contiguous space designated for film production use.
THERE ARE CURRENTLY SEVEN (7) QUALIFYING STAGES + SETS IN NEW MEXICO with five of them in Santa Fe:
Garson Studios (Santa Fe)
Bonanza Creek Movie Ranch (Santa Fe)
Cerro Pelon Western Set (Santa Fe)
Eaves Western Set (Santa Fe)
I-25 Studios (ABQ)
WHAT AREAS ARE CONSIDERED “RURAL”?
Currently any areas located sixty (60) miles outside the boundaries of Santa Fe County or Bernalillo (Albuquerque) County.
HOW MANY DAYS MUST I SHOOT or HOW MUCH MUST I SPEND IN A “RURAL AREA” TO GET THE ADDITIONAL 5% TAX CREDIT?
There is no minimum shoot day or spend requirement.
The additional 5% tax credit applies on expenditures made while you are in the rural area during prep, shoot and wrap, so wages, rentals, etc must be pro-rated.
Since expenditures must be “provided on location,” purchases must be purchased in the rural area or sent to you in the rural area from the vendor in order for it to qualify.
Rentals will qualify and must be prorated (if you’re not shooting 100% in the rural area.)
For instance, if you rent a generator in Santa Fe and take it with you to the rural area (where you’re shooting 50% of the film), only 50% of the rental will qualify.
Purchases and rentals must be subject to New Mexico tax in order for them to qualify.
The tax credit is based on the entire amount, including tax. Example: $100 base price + $8.31 tax = $108.31. Tax credit is 25% of $108.31 or $27.08.
New Mexico Vendors must have a physical presence – and the owner or employee must be a New Mexico resident.
All resident crew, ATL + BTL, will qualify. There are no caps per person.
New Mexico Personal Income Tax Returns determine residency – “Residency” must be claimed.
Nonresident Crew qualifies for a flat 15% Tax Credit on not more than fifteen percent (15%) of the production's total New Mexico budget for below-the-line crew wages.
However, provided that sufficient and qualified NM resident below-the-line crew are not available, the state film office may allow up to twenty percent (20%) of the production's total New Mexico budget for below-the-line crew wages.
Productions must make a financial or promotional contribution toward educational, media-related nonprofit or workforce development efforts in New Mexico when claiming any nonresident crew credits.
Any nonresident BTL positions can make up the 15% or 20%.
No ATL (Directors, Producers or Writers) will qualify.
WHAT HAPPENS WHEN A NONRESIDENT CREW FALSELY CLAIMS TO BE A RESIDENT?
The wages of any nonresident crew member falsely claiming to be a resident will not only be disqualified, but his/her wages will not be eligible for the tax credit for an additional two years.
We mean business, folks!
All resident performing artists will qualify. There are no caps per person.
Nonresident ON-CAMERA PERFORMING ARTISTS qualify for the 25% tax credit – wages and per diem only – and are subject to 4.9% withholding regardless of how they’re paid.
There is a $5M cap on performing artists, meaning that $20M in payments to performing artists will qualify.
There is a total cap of $210M per fiscal year: a $100M “authorized” cap plus an additional $110M “pay-out” cap.
This cap does not apply to “New Mexico Film Partners.”
Any “New Mexico Film Partners” are not subject to the cap.
WHAT IS A “NEW MEXICO FILM PARTNER”?
A “New Mexico Film Partner” is a film production company that has made a commitment to produce films or commercial audiovisual products in New Mexico and has purchased or executed a ten-year contract to lease a qualified production facility.
Come join the party, folks!
Tax credits of less than $2M will be paid out immediately upon authorization.
Tax credits of at least $2M but less than $5M will be divided into two equal payments with the first payment paid out immediately upon authorization and the second payment paid out 12 months after the first payment. However, if the $50M cap has not been exceeded, divided credits may be paid out early according to the queue.
Tax credits of $5M or more will be divided into three equal payments with the first payment paid out immediately upon authorization, the second payment paid out 12 months after the first payment, and the third payment paid out 24 months after the first payment. However, if the $50M cap has not been exceeded, divided credits may be paid out early according to the queue.
Tax credits of $5M or more require an audit from a New Mexico CPA.
If the cap has not been exceeded, divided credits may be paid out early according to the queue.
REGISTRATION occurs prior to production.
APPLICATION occurs after production.
FILING FOR THE TAX CREDIT occurs after the close of the company’s tax year.
SUBMISSION DEADLINE for the application is one year from the date of the last qualifying expenditure in the company’s tax year.