NMSA 1978, § 7-2-18.24 — 7-2-18.24

Geothermal ground-coupled heat pump income tax
credit.

# A.

A taxpayer who files an individual New Mexico income tax return for a taxable
year beginning on or after January 1, 2024 and who purchases and installs after May
15, 2024 but before December 31, 2034 a geothermal ground-coupled heat pump in a
residence, business or agricultural enterprise in New Mexico owned by that taxpayer
may apply for, and the department may allow, a tax credit of up to thirty percent of the
purchase and installation costs of the system. The credit provided in this section may
be referred to as the "geothermal ground-coupled heat pump income tax credit". The
total geothermal ground-coupled heat pump income tax credit allowed to a taxpayer
shall not exceed nine thousand dollars ($9,000). The department shall allow a
geothermal ground-coupled heat pump income tax credit only for geothermal ground-
coupled heat pumps that are certified pursuant to Subsection C of this section and
installed by a nationally accredited ground source heat pump installer.

# B.

That portion of a geothermal ground-coupled heat pump income tax credit that
exceeds a taxpayer's tax liability in the taxable year in which the credit is claimed shall
be refunded to the taxpayer.

# C.

The energy, minerals and natural resources department shall adopt rules
establishing procedures to provide certification of geothermal ground-coupled heat
pumps for purposes of obtaining a geothermal ground-coupled heat pump income tax
credit. The rules shall address technical specifications and requirements relating to
safety, building code and standards compliance, minimum system sizes, system
applications and lists of eligible components. The energy, minerals and natural
resources department may modify the specifications and requirements as necessary to
maintain a high level of system quality and performance.

# D.

The maximum annual aggregate of credits that may be certified in a calendar
year by the energy, minerals and natural resources department is four million dollars
($4,000,000). That department shall not certify a tax credit for which a taxpayer claims
a 2021 sustainable building tax credit using a geothermal ground-coupled heat pump as
a component of qualification for the rating system certification level used in determining
eligibility for that credit. Completed applications for the credit shall be considered in the
order received. The energy, minerals and natural resources department shall provide
the department appropriate information for all certificates of eligibility in a secure
manner on regular intervals agreed upon by both departments.

# E.

A taxpayer who otherwise qualifies and claims a geothermal ground-coupled
heat pump income tax credit with respect to property owned by a partnership or other
business association of which the taxpayer is a member may claim a credit only in
proportion to that taxpayer's interest in the partnership or association. The total credit
claimed in the aggregate by all members of the partnership or association with respect
to the property shall not exceed the amount of the credit that could have been claimed
by a sole owner of the property.

# F.

Married individuals who file separate returns for a taxable year in which they
could have filed a joint return may each claim only one-half of the credit that would have
been allowed on a joint return.

# G.

A taxpayer allowed a tax credit pursuant to this section shall claim the credit on
forms and in a manner required by the department.

# H.

The credit provided by this section shall be included in the tax expenditure
budget pursuant to Section 7-1-84 NMSA 1978, including the annual aggregate cost of
the tax credit.

# I.

As used in this section, "geothermal ground-coupled heat pump" means a
heating and refrigerating system that directly or indirectly utilizes available heat below
the surface of the earth for distribution of heating and cooling or domestic hot water and
that has either a minimum coefficient of performance of three and four-tenths or an
efficiency ratio of sixteen or greater.