Category: State Incentives, Tax Incentives
AGENCY: Taxation and Revenue Department
DESCRIPTION: The Angel Investment Tax Credit provides a 25% credit on the qualifying investment in a high-technology or manufacturing business. The maximum investment for which a credit will be allowed for a business is $100,000. The maximum credit will total $25,000 annually per investment. The angel investment credit may only be deducted from the taxpayer’s personal income tax liability.
ELIGIBILITY: Accredited investor means a person who is an accredited investor within the meaning of Rule 501 issued by the federal Securities and Exchange Commission pursuant to the federal Securities Act of 1933, as amended.
Qualified investment means a cash investment in a qualified business for equity.
Qualified business means a business that: (a) maintains its principal place of business in New Mexico; (b) engages in high-technology research or manufacturing activities in New Mexico; (c) is not primarily engaged in or is not primarily organized as any of the following types of businesses: credit or finance services -- including banks, savings and loan associations, credit unions, small local companies or title loan companies; financial brokering or investment; professional services -- including accounting, legal services, engineering and any other services the practice of which requires a license; insurance; real estate; construction or construction contracting; consulting or brokering; mining; wholesale or retail trade; providing utility service -- including water, sewerage, electricity, natural gas, propane or butane; publishing -- including publishing newspapers or other periodicals; broadcasting; or providing internet operating services; (d) has not issued securities registered pursuant to Section 6 of the federal Securities Act of 1933, as amended; has not issued securities traded on a national securities exchange; is not subject to reporting requirements of the federal Securities Exchange Act of 1934, as amended; and is not registered pursuant to the federal Investment Company Act of 1940, as amended, at the time of the investment; (e) has 100 or fewer employees calculated on a full-time-equivalent basis at the time of the investment; and (f) has not had gross revenues in excess of $5,000,000 in any fiscal year ending on or before the date of the investment.
High-technology research means research: (a) that is undertaken for the purpose of discovering information that is technological in nature and the application of which is intended to be useful in the development of a new or improved business component of the qualified business; and (b) substantially all of the activities of which constitute elements of a process or experimentation related to a new or improved function, performance, reliability or quality.
Manufacturing means combining or processing components or materials to increase their value for sale in the ordinary course of business, but does not include: (a) construction; (b) farming; (c) processing natural resources, including hydrocarbons; or (d) preparing means for immediate consumption, on- or off- premises.
• To qualify a taxpayer must apply for a certificate of eligibility for the Angel Investment Credit to the 7 3/11
• Economic Development Department (EDD).
• To claim the credit, submit a completed Form RPD-41320, Angel Investment Credit Claim Form, and a copy of the certificate of eligibility to the Taxation and Revenue Department.
• Accredited investors are allowed credits for two qualifying investments annually, provided that each investment is in a different qualified business.
• Angel Investment Credits may be carried forward for up to three years.
• For assistance obtaining the certificate of eligibility for the Angel Investment Credit, contact Kathy McCormick at the Economic Development Department at (505) 670-6320.
• Or, Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or call the office of the Secretary at (505) 827-0951.