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HOUSE BILL 211
57
TH LEGISLATURE
-
STATE
OF
NEW
MEXICO
-
FIRST SESSION
,
2025
INTRODUCED BY
Joanne J. Ferrary and Kathleen Cates and Marianna Anaya
and Debra M. Sariñana
AN ACT
RELATING TO TAXATION; AMENDING THE ELIGIBILITY AND APPLICATION
REQUIREMENTS OF THE NEW SOLAR MARKET DEVELOPMENT INCOME TAX
CREDIT; INCREASING THE AMOUNT OF CREDIT ALLOWED FOR SOLAR
SYSTEMS WITH AT LEAST FIFTEEN KILOWATT-HOURS OF STORAGE
CAPACITY; CREATING THE NEW SOLAR MARKET DEVELOPMENT CORPORATE
INCOME TAX CREDIT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 7-2-18.31 NMSA 1978 (being Laws 2020,
Chapter 13, Section 1, as amended) is amended to read:
"7-2-18.31. NEW SOLAR MARKET DEVELOPMENT INCOME TAX
CREDIT.--
A. For taxable years prior to January 1, 2032, a
taxpayer who is not a dependent of another individual and who
[on or after March 1, 2020 ] purchases and installs a solar
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thermal system or a photovoltaic system in a residence,
business or agricultural enterprise in New Mexico owned by that
taxpayer or by a federally recognized Indian nation, tribe or
pueblo and held in leasehold by that taxpayer or a taxpayer who
is not a dependent of another individual and who installs a
photovoltaic system on a property and sells electricity from
that system pursuant to a power purchase agreement to the owner
or occupant of that property may apply for, and the department
may allow, a credit against the taxpayer's tax liability
imposed pursuant to the Income Tax Act in an amount provided in
Subsection C of this section. The tax credit provided by this
section may be referred to as the "new solar market development
income tax credit".
B. The purpose of the new solar market development
income tax credit is to encourage the installation of solar
thermal and photovoltaic systems in residences, businesses,
nonprofit organizations and agricultural enterprises.
C. The department may allow a new solar market
development income tax credit of ten percent of the purchase
and installation costs of a solar thermal or photovoltaic
system or twenty percent of the purchase and installation costs
of a photovoltaic system that has at least fifteen kilowatt-
hours of solar storage capacity .
D. The new solar market development income tax
credit shall not exceed six thousand dollars ($6,000) per
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[taxpayer] property per taxable year, unless the tax credit is
for a photovoltaic system that has at least fifteen kilowatt-
hours of solar storage capacity, in which case the tax credit
shall not exceed twelve thousand dollars ($12,000) per property
per taxable year. The department shall allow a tax credit only
for solar thermal and photovoltaic systems certified pursuant
to Subsection E of this section.
E. Subject to the limitation provided in Subsection
F of this section, a taxpayer shall apply for certification of
eligibility for the new solar market development income tax
credit from the energy, minerals and natural resources
department on forms and in the manner prescribed by that
department. Completed applications shall be considered in the
order received. The application shall include proof of
purchase and installation of a solar thermal or photovoltaic
system, that the system meets technical specifications and
requirements relating to safety, code and standards compliance,
that the system has passed inspection by an inspector certified
by the political subdivision of the state in which the system
is located, if required by that political subdivision, a power
purchase agreement, if applicable , solar collector orientation
and sun exposure, minimum system sizes, system applications and
lists of eligible components and any additional information
that the energy, minerals and natural resources department may
require to determine eligibility for the credit. A dated
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certificate of eligibility shall be issued to the taxpayer
providing the amount of the new solar market development income
tax credit for which the taxpayer is eligible and the taxable
year in which the credit may be claimed. A certificate of
eligibility for a new solar market development income tax
credit may be sold, exchanged or otherwise transferred to
another taxpayer for the full [value ] amount of the credit.
The parties to such a transaction shall notify the department
of the sale, exchange or transfer within ten days of the sale,
exchange or transfer. Nothing in this section prohibits the
sale, exchange or transfer from being agreed upon before the
installation is made.
F. The aggregate amount of credits that may be
certified in a calendar year pursuant to Subsection E of this
section [is as follows, and applications for certification
received after these limitations have been met shall not be
approved:
(1) for calendar years 2020 through 2023,
twelve million dollars ($12,000,000) for each calendar year;
provided that if this limitation has been met for any of those
calendar years, an additional total of twenty million dollars
($20,000,000) in credits may be certified for all of those
calendar years; and provided further that credits certified
pursuant to this paragraph shall be claimed only for taxable
year 2023; and
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(2) for calendar years 2024 and thereafter,
thirty million dollars ($30,000,000) ] and Subsection D of
Section 2 of this 2025 act is thirty million dollars
($30,000,000). If a taxpayer applies for and meets the
requirements for the tax credit but the maximum aggregate
amount of credits has been certified for that taxable year, the
energy, minerals and natural resources department shall issue
the taxpayer a certificate of eligibility for the next taxable
year in which there are available certifications .
G. A taxpayer may claim a new solar market
development income tax credit for the taxable year in which the
taxpayer purchases and installs a solar thermal or photovoltaic
system. To receive a new solar market development income tax
credit, a taxpayer shall apply to the department on forms and
in the manner prescribed by the department within twelve months
following the calendar year in which the system was installed
[provided that, for a taxpayer who receives a certificate of
eligibility pursuant to Paragraph (1) of Subsection F of this
section, the taxpayer shall apply to the department within
twelve months following the calendar year in which the
certification is made ]. The application shall include a
certification made pursuant to Subsection E of this section.
H. That portion of a new solar market development
income tax credit that exceeds a taxpayer's tax liability in
the taxable year in which the credit is claimed shall be
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refunded to the taxpayer.
I. Married individuals filing separate returns for
a taxable year for which they could have filed a joint return
may each claim only one-half of the new solar market
development income tax credit that would have been claimed on a
joint return.
J. A taxpayer may be allocated the right to claim a
new solar market development income tax credit in proportion to
the taxpayer's ownership interest if the taxpayer owns an
interest in a business entity that is taxed for federal income
tax purposes as a partnership or limited liability company and
that business entity has met all of the requirements to be
eligible for the credit. The total credit claimed by all
members of the partnership or limited liability company shall
not exceed the allowable credit pursuant to this section.
K. A taxpayer allowed a tax credit pursuant to this
section shall report the amount of the credit to the taxation
and revenue department in a manner required by that department.
L. The [taxation and revenue department shall
compile an annual report on the new solar market development
income tax credit that shall include ] credit provided by this
section shall be included in the tax expenditure budget
pursuant to Section 7-1-84 NMSA 1978, including the total
annual aggregate cost of the credit , the number of taxpayers
approved by the department to receive the credit, the aggregate
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amount of credits approved and any other information necessary
to evaluate the credit. [The department shall present the
report to the revenue stabilization and tax policy committee
and the legislative finance committee with an analysis of the
cost of the tax credit. ]
M. As used in this section:
(1) "photovoltaic system" means an energy
system that collects or absorbs sunlight for conversion into
electricity; and
(2) "solar thermal system" means an energy
system that collects or absorbs solar energy for conversion
into heat for the purposes of space heating, space cooling or
water heating."
SECTION 2. A new section of the Corporate Income and
Franchise Tax Act is enacted to read:
"[NEW MATERIAL] NEW SOLAR MARKET DEVELOPMENT CORPORATE
INCOME TAX CREDIT.--
A. For taxable years prior to January 1, 2032, a
taxpayer that purchases and installs a solar thermal system or
a photovoltaic system in a business or agricultural enterprise
in New Mexico owned by that taxpayer or by a federally
recognized Indian nation, tribe or pueblo and held in leasehold
by that taxpayer or a taxpayer that installs a photovoltaic
system on a property and sells electricity from that system
pursuant to a power purchase agreement to the owner or occupant
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of that property may apply for, and the department may allow, a
credit against the taxpayer's tax liability for that taxable
year imposed pursuant to the Corporate Income and Franchise Tax
Act in an amount provided in Subsection B of this section. The
tax credit provided by this section may be referred to as the
"new solar market development corporate income tax credit".
B. The department may allow a new solar market
development corporate income tax credit of ten percent of the
purchase and installation costs of a solar thermal or
photovoltaic system or twenty percent of the purchase and
installation costs of a photovoltaic system that has at least
fifteen kilowatt-hours of solar storage capacity.
C. The new solar market development corporate
income tax credit shall not exceed six thousand dollars
($6,000) per property per taxable year, unless the tax credit
is for a photovoltaic system that has at least fifteen
kilowatt-hours of solar storage capacity, in which case the tax
credit shall not exceed twelve thousand dollars ($12,000) per
property per taxable year. The department shall allow a tax
credit only for solar thermal and photovoltaic systems
certified pursuant to Subsection D of this section.
D. Subject to the limitation provided in Subsection
E of this section, a taxpayer shall apply for certification of
eligibility for the new solar market development corporate
income tax credit from the energy, minerals and natural
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resources department on forms and in the manner prescribed by
that department. Completed applications shall be considered in
the order received. The application shall include proof of
purchase and installation of a solar thermal or photovoltaic
system, that the system meets technical specifications and
requirements relating to safety, code and standards compliance,
that the system has passed inspection by an inspector certified
by the political subdivision of the state in which the system
is located, if required by that political subdivision, a power
purchase agreement, if applicable, solar collector orientation
and sun exposure, minimum system sizes, system applications and
lists of eligible components and any additional information
that the energy, minerals and natural resources department may
require to determine eligibility for the credit. A dated
certificate of eligibility shall be issued to the taxpayer
providing the amount of the new solar market development
corporate income tax credit for which the taxpayer is eligible
and the taxable year in which the credit may be claimed. A
certificate of eligibility for a new solar market development
corporate income tax credit may be sold, exchanged or otherwise
transferred to another taxpayer for the full amount of the
credit. The parties to such a transaction shall notify the
department of the sale, exchange or transfer within ten days of
the sale, exchange or transfer. Nothing in this section
prohibits the sale, exchange or transfer from being agreed upon
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before the installation is made.
E. The aggregate amount of credits that may be
certified pursuant to Subsection D of this section and
Subsection E of Section 7-2-18.31 NMSA 1978 is thirty million
dollars ($30,000,000). If a taxpayer applies for and meets the
requirements for the tax credit but the maximum aggregate
amount of credits has been certified for that taxable year, the
energy, minerals and natural resources department shall issue
the taxpayer a certificate of eligibility for the next taxable
year in which there are available certifications.
F. A taxpayer may claim a new solar market
development corporate income tax credit for the taxable year in
which the taxpayer purchases and installs a solar thermal or
photovoltaic system. To receive a new solar market development
corporate income tax credit, a taxpayer shall apply to the
department on forms and in the manner prescribed by the
department within twelve months following the calendar year in
which the system was installed. The application shall include
a certification made pursuant to Subsection D of this section.
G. That portion of a new solar market development
corporate income tax credit that exceeds a taxpayer's tax
liability in the taxable year in which the credit is claimed
shall be refunded to the taxpayer.
H. A taxpayer allowed a tax credit pursuant to this
section shall report the amount of the credit to the taxation
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and revenue department in a manner required by that department.
I. The credit provided by this section shall be
included in the tax expenditure budget pursuant to Section
7-1-84 NMSA 1978, including the total annual aggregate cost of
the credit, the number of taxpayers approved by the department
to receive the credit, the aggregate amount of credits approved
and any other information necessary to evaluate the credit.
J. As used in this section:
(1) "photovoltaic system" means an energy
system that collects or absorbs sunlight for conversion into
electricity; and
(2) "solar thermal system" means an energy
system that collects or absorbs solar energy for conversion
into heat for the purposes of space heating, space cooling or
water heating."
SECTION 3. APPLICABILITY.--The provisions of this act
apply to the purchase and installation of a solar thermal
system or a photovoltaic system in taxable years beginning on
or after January 1, 2025.
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