NMSA 1978, § 7-9-112.1 — 7-9-112.1

Deductions; gross receipts tax; compensating tax;
geothermal electricity generation-related sales and use.

# A.

Prior to July 1, 2032, receipts from the following sales may be deducted from
gross receipts; provided that the sale is made to a person who holds an interest in a
geothermal electricity generation facility and the person delivers an appropriate
nontaxable transaction certificate to the seller or lessor or provides alternative evidence
pursuant to Section 7-9-43 NMSA 1978:
(1) selling tangible personal property installed as part of, or services rendered
in connection with, constructing and equipping a geothermal electricity generation
facility;
(2) selling tangible personal property installed as part of a system used for the
distribution of electricity generated from a geothermal electricity generation facility; and
(3) selling or leasing tangible personal property or selling services that are
construction plant costs.

# B.

Prior to July 1, 2032, the value of:
(1) tangible personal property installed as part of, or services rendered in
connection with, constructing and equipping a geothermal electricity generation facility
may be deducted in computing compensating tax due;
(2) tangible personal property installed as part of a system used for the
distribution of electricity generated from a geothermal electricity generation facility may
be deducted in computing compensating tax due; and
(3) construction plant costs purchased by a person who holds an interest in a
geothermal electricity generation facility may be deducted in computing compensating
tax due.

# C.

A taxpayer allowed a deduction pursuant to this section shall report the amount
of the deduction separately in a manner required by the department.

# D.

The deductions provided by this section shall be included in the tax expenditure
budget pursuant to Section 7-1-84 NMSA 1978 with an analysis of the effectiveness and
cost of the deductions.

# E.

As used in this section:
(1) "construction plant costs" means actual expenditures for the development
and construction of a geothermal electricity generation facility, including the drilling of
wells to at least twelve thousand feet; permitting; site characterization and assessment;
engineering; design; site and equipment acquisition; raw materials; and fuel supply
development used directly and exclusively in the facility;
(2) "geothermal electricity generation facility" means a facility located in New
Mexico that generates electricity from geothermal resources and:
(a) for a new facility, begins construction on or after January 1, 2025; or
(b) for an existing facility, on or after January 1, 2025, increases the amount
of electricity generated from geothermal resources the facility generated prior to that
date by at least one hundred percent;
(3) "geothermal resources" means the natural heat of the earth in excess of
two hundred fifty degrees Fahrenheit or the energy, in whatever form, below the surface
of the earth present in, resulting from, created by or that may be extracted from this
natural heat in excess of two hundred fifty degrees Fahrenheit and all minerals in
solution or other products obtained from naturally heated fluids, brines, associated
gases and steam, in whatever form, found below the surface of the earth, but excluding
oil, hydrocarbon gas and other hydrocarbon substances and excluding the heating and
cooling capacity of the earth not resulting from the natural heat of the earth in excess of
two hundred fifty degrees Fahrenheit as may be used for the heating and cooling of
buildings through an on-site geoexchange heat pump or similar on-site system; and
(4) "interest in a geothermal electricity generation facility" means title to a
geothermal electricity generation facility; a leasehold interest in such facility; an
ownership interest in a business or entity that is taxed for federal income tax purposes
as a partnership that holds title to or a leasehold interest in such facility; or an
ownership interest, through one or more intermediate entities that are each taxed for
federal income tax purposes as a partnership, in a business that holds title to or a
leasehold interest in such facility.