us-nm/stat
NMSA 1978, § 7-2F-13 — New film production tax credit
A.
The tax credit created by this section may be referred to as the "new film
production tax credit".
B.
A film production company that meets the requirements of the Film Production
Tax Credit Act may apply for, and the taxation and revenue department may allow, a tax
credit in an amount equal to twenty-five percent of:
(1) direct production expenditures made in New Mexico that:
(a) are directly attributable to the production in New Mexico of a film or
commercial audiovisual product;
(b) are subject to taxation by the state of New Mexico;
(c) exclude direct production expenditures for which another taxpayer claims
the new film production tax credit; and
(d) do not exceed the usual and customary cost of the goods or services
acquired when purchased by unrelated parties. The secretary of taxation and revenue
may determine the value of the goods or services for purposes of this section when the
buyer and seller are affiliated persons or the sale or purchase is not an arm's length
transaction; and
(2) postproduction expenditures made in New Mexico that:
(a) are directly attributable to the production of a commercial film or
audiovisual product;
(b) are for services performed in New Mexico;
(c) are subject to taxation by the state of New Mexico;
(d) exclude postproduction expenditures for which another taxpayer claims
the new film production tax credit; and
(e) do not exceed the usual and customary cost of the goods or services
acquired when purchased by unrelated parties. The secretary of taxation and revenue
may determine the value of the goods or services for purposes of this section when the
buyer and seller are affiliated persons or the sale or purchase is not an arm's length
transaction.
C.
With respect to expenditures attributable to a production for which the film
production company receives a tax credit pursuant to the federal new markets tax credit
program, the percentage to be applied in calculating the amount of credit allowed
pursuant to the Film Production Tax Credit Act is twenty percent.
D.
A claim for new film production tax credits shall be filed as part of a return filed
pursuant to the Income Tax Act [Chapter 7, Article 2 NMSA 1978] or the Corporate
Income and Franchise Tax Act [Chapter 7, Article 2A NMSA 1978] or an information
return filed by an entity assigned payment of an authorized credit pursuant to Section 7-
2F-5 NMSA 1978. The date a complete credit claim is received by the taxation and
revenue department shall determine the order that a credit claim is authorized for
payment by the department. The film production company may apply all or a portion of
the new film production tax credit granted against personal income tax liability or
corporate income tax liability. If the amount of the credit claimed exceeds the film
production company's tax liability for the taxable year in which the credit is being
claimed, the excess shall be refunded.
E.
A credit claim shall only be considered received by the taxation and revenue
department if the credit claim is made on a complete return filed after the close of the
taxable year. All direct production expenditures and postproduction expenditures
incurred during the taxable year by a film production company shall be submitted as
part of the same income tax return and paid pursuant to this section. A credit claim
shall not be divided and submitted with multiple returns or in multiple years.
F.
For purposes of determining the payment of credit claims pursuant to this
section, the secretary of taxation and revenue may require that credit claims of affiliated
persons be combined into one claim if necessary to accurately reflect closely integrated
activities of affiliated persons.
G.
The new film production tax credit shall not be claimed with respect to direct
production expenditures or postproduction expenditures for which the film production
company has delivered a nontaxable transaction certificate pursuant to Section 7-9-86
NMSA 1978 or alternative evidence pursuant to Section 7-9-43 NMSA 1978.
H.
A production for which the new film production tax credit is claimed pursuant to
Paragraph (1) of Subsection B of this section shall contain an acknowledgment to the
state of New Mexico. Unless otherwise agreed upon in writing by the film production
company and the division, the acknowledgment shall be in the end screen credits that
the production was filmed in New Mexico and a three-second static or animated state
logo provided by the division shall be included and embedded in the following:
(1) end screen credits before the below-the-line crew crawl for the life of the
project of long-form narrative film productions; and
(2) body of the program for the life of television episodes, the placement of
which shall be:
(a) in the opening sequence;
(b) as a bumper into or out of a commercial break; or
(c) in a prominent position in each single project's end credits with no less
than a half screen exposure, but not covering content.
I.
To be eligible for the new film production tax credit, a film production company
shall submit to the division information required by the division to demonstrate
conformity with the requirements of the Film Production Tax Credit Act, including
production data deemed necessary by the division and the economic development
department to determine the effectiveness of the credit, and a projection of the new film
production tax credit claim the film production company plans to submit. In addition, the
film production company shall agree in writing:
(1) to pay all obligations the film production company has incurred in New
Mexico;
(2) to post a notice at completion of principal photography on the website of
the division that:
(a) contains production company information, including the name of the
production and contact information that includes a working phone number and email
address for both the local production office and the permanent production office to notify
the public of the need to file creditor claims against the film production company; and
(b) remains posted on the website until all financial obligations incurred in the
state by the film production company have been paid;
(3) that outstanding obligations are not waived should a creditor fail to file;
(4) to delay filing of a claim for the new film production tax credit until the
division delivers written notification to the taxation and revenue department that the film
production company has fulfilled all requirements for the credit; and
(5) to submit a completed application for the new film production tax credit
and supporting documentation to the division within one year of making the final
expenditures in New Mexico that were incurred for the registered project and that are
included in the credit claim.
J.
The division, in consultation with the taxation and revenue department, shall
determine the eligibility of the film production company and shall report this information
to the taxation and revenue department in a manner and at times the economic
development department and the taxation and revenue department shall agree upon.
The division shall also post on its website all information provided by the film production
company that does not reveal revenue, income or other information that may jeopardize
the confidentiality of income tax returns.
K.
To receive a new film production tax credit, a film production company shall apply
to the taxation and revenue department on forms and in the manner the department
may prescribe. The application shall include a certification of the amount of direct
production expenditures or postproduction expenditures made in New Mexico with
respect to the film production for which the film production company is seeking the
credit; provided that for the credit, the application shall be submitted within one year of
the date of the last direct production expenditure in New Mexico or the last
postproduction expenditure in New Mexico. If the amount of the requested tax credit
exceeds five million dollars ($5,000,000), the application shall also include the results of
an audit, conducted by a certified public accountant licensed to practice in New Mexico,
verifying that the expenditures have been made in compliance with the requirements of
this section. If the requirements of this section have been complied with, the taxation
and revenue department shall approve the credit and issue a document granting the
credit.
L.
Except as provided in Subsection M of this section, that amount of a new film
production tax credit for total payments as applied to direct production expenditures for
the services of performing artists shall not exceed five million dollars ($5,000,000) for
services rendered by nonresident performing artists in a production. This limitation shall
not apply to the services of background artists or resident performing artists cast in
industry standard feature performing roles.
M.
In addition to the amount of payments allowed pursuant to Subsection L of this
section, that amount of a new film production tax credit for total payments as applied to
direct production expenditures made by a New Mexico film partner for the services of
nonresident performing artists, directors, producers, screenwriters and editors shall not
exceed ten million dollars ($10,000,000) for services rendered for each production;
provided that the total payments allowed pursuant to this subsection shall not exceed an
annual aggregate maximum of forty million dollars ($40,000,000) for all productions in a
fiscal year. If the aggregate amount of payments made in a fiscal year is less than the
annual aggregate maximum, then the difference in that fiscal year shall be added to the
annual aggregate maximum allowed in the following fiscal year.
Source: official text