New Mexico Incentives 

Santa Teresa is highly competitive in attracting and retaining business due, in large part, to major business incentive programs offered by the State of New Mexico to companies locating in the area.

Industrial Revenue Bonds

Industrial Revenue Bonds (IRBs) issued by Dona Ana County take twelve weeks to process, and can be used to finance buildings, furniture, fixtures and equipment for manufacturing projects in Santa Teresa. The bonds must be approved by the Dona Ana County Commission, which weighs the benefit to the county (i.e. increased jobs) versus potential loss in tax revenue.
Benefits derived from the use of IRBs include Property Tax exemptions, Gross Receipts and Compensation Tax exemptions and low interest rates. Real and personal property included in an IRB project are exempt from Property Tax in New Mexico for up to thirty years. Furniture, fixtures and equipment purchased with IRB proceeds are exempt from Gross Receipts or Compensating Tax. The County, however, may ask for a payment in lieu of taxes to support the school district. IRBs, especially “Tax Exempt” IRBs, can have interest rates well below market interest rates. 

The Investment Credit Act

Investment credits are available to manufacturers locating in Santa Teresa and are a reward for increasing employment in the area. Manufacturers are allowed to take a tax credit equal to 5% of the value of equipment and machinery used for manufacturing. If the equipment is new, the credit is applied based on the purchase price. If the equipment is used or moved in from outside New Mexico, the credit is determined based on its book value. The Investment Credit Act can be used to reduce Gross Receipts and Compensating, or Withholding Tax owed to the state, not to exceed 85% of tax liability in any one of those categories. Credits not claimed in one reporting period may be carried forward and applied to subsequent periods.

The Investment Credit Act rewards employers for hiring workers.

The Investment Credit Act may be claimed for equipment acquired with Industrial Revenue Bonds.  To receive credit, the manufacturer applies to the New Mexico Taxation and Revenue Department by the end of the year in which the equipment was purchased or introduced into New Mexico.  Construction, power generating and natural resource processing companies are not considered manufacturers and therefore do not qualify for the credit. 

Industrial Development Training Program

The Industrial Development Training Program aids the New Mexican economy by providing funds for training projects that prepare the state’s citizens for employment in manufacturing companies or in some cases for non-retail service companies.  Highlights of training projects are as follows:

• Training projects are customized to meet individual company needs
• They can take place in the classroom or on-site at the company
• They will give residents improved economic status through employment
• They will provide measurable growth to the economic base
• They will provide both pre-employment classroom training and on-the-job training
• They are not restricted to the economically disadvantaged
• Companies select trainees and employees

The minimum reimbursement for training costs is as follows:
a) 65% of on-the-job participants’ hourly wages up to 1,040 hours.
b) 100% of company and education institution trainers’ wages
c) 50% of outside or consultant trainers’ wages
d) 50-100% of trainers’ travel and lodging costs
e) 50-100% of instructional materials
f) 50-100% of the cost of renting training facilities

There are several restrictions regarding enrollment in the program.  Applicants for training must be US citizens and residents of New Mexico for a minimum of one year. Trainees must be guaranteed full-time, year-round employment with the company upon successfully completing training.  At the close of the project, the company will arrange a compliance audit with an independent accounting firm to evaluate the costs and benefits of the program.