A. The tax credit created by this section may be referred to as the "film and television tax credit".
B. An eligible film production company may apply for, and the taxation and revenue department may allow, subject to the limitation in Section 7-2F-12 NMSA 1978, 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 film and television 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 postproduction 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 film and television 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 film and television tax credit is twenty percent.
D. The film and television 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.
E. A production for which the film and televison [television] tax credit is claimed pursuant to Paragraph (1) of Subsection B of this section shall contain an acknowledgment to the state of New Mexico in the end screen credits that the production was filmed in New Mexico, and a state logo provided by the division shall be included and embedded in the end screen credits of long-form narrative film productions and television episodes, unless otherwise agreed upon in writing by the film production company and the division.
F. To be eligible for the film and television 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 detailed information on each direct production expenditure and each postproduction expenditure. A film production company shall provide to the division a projection of the film and television tax credit claim the film production company plans to submit in the fiscal year. 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, the address of the production company and contact information that includes a working phone number, fax 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 film and television 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 film and television tax credit and supporting documentation to the division within one year of the close of the film production company's taxable year in which the expenditures in New Mexico were incurred for the registered project and that are included in the credit claim.
G. The division shall determine the eligibility of the 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, including that the division shall report quarterly the projected amount of credit claims for the fiscal year.
H. To provide guidance to film production companies regarding the amount of credit capacity remaining in the fiscal year, the taxation and revenue department shall post monthly on that department's website the aggregate amount of credits claimed and processed for the fiscal year.
I. To receive a film and television 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 film and television tax credit; provided that for the film and television tax 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 incurred within the film production company's taxable year. 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, subject to the provisions of Section 7-2F-12 NMSA 1978, the taxation and revenue department shall approve the film and television tax credit and issue a document granting the tax credit.
J. The film production company may apply all or a portion of the film and television tax credit granted against personal income tax liability or corporate income tax liability. If the amount of the film and television tax 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.
History: Laws 2015, ch. 143, § 5; 2016, ch. 77, § 6.
ANNOTATIONSBracketed material. — The bracketed material was inserted by the compiler to correct a typographical error and is not part of the law.
The 2016 amendment, effective May 18, 2016, clarified citations to the NMSA 1978 within the section; throughout the section, changed "web site" to "website"; in Subsection B, deleted "11 of this 2015 act" and added "7-2F-12 NMSA 1978"; and in Subsection I, deleted "11 of this 2015 act" and added "7-2F-12 NMSA 1978".