New Mexico 2024 Regular Session

New Mexico House Bill HB274

Introduced

1/29/24

Report Pass

2/6/24

Caption

Advanced Energy Equipment Tax Credit

Impact

If enacted, HB274 could significantly enhance the economic landscape for renewable energy manufacturing in New Mexico. By incentivizing businesses to invest in advanced manufacturing facilities, the bill could lead to increased job creation and stimulate local economies. However, there could also be concerns regarding the cost of the tax credits on state revenue. The potential tax benefits may lead to increased scrutiny regarding their long-term effectiveness and sustainability.

Summary

House Bill 274 establishes the Advanced Energy Equipment Income Tax Credit and the Advanced Energy Equipment Corporate Income Tax Credit in New Mexico. The bill aims to incentivize investment in advanced energy manufacturing facilities by providing a tax credit equal to the lesser of 20% of qualified expenditures or $25 million. This credit applies for manufacturing facilities located in New Mexico producing advanced energy products eligible for federal tax credits under Section 45X of the federal Internal Revenue Code. The bill's provisions take effect for taxable years beginning on January 1, 2025, and remain valid until January 1, 2033.

Contention

Notable points of contention around HB274 may arise from concerns about the potential fiscal impact on the state budget. Opponents might argue that the tax credits represent a public subsidy for private enterprises and could divert funds from other essential state services. Proponents, including business groups and economic developers, contend that the investment in advanced energy facilities is essential for transitioning toward a more sustainable energy economy and that these credits could attract new businesses to the state.