House bill offers tax credit for new business development
Monday, January 05, 2015
AZTEC, NM — Local officials have endorsed a bill sponsored by the Northwest New Mexico Council of Governments that is designed to spur economic development in mostly rural areas of the state.
The bill, currently in draft form, offers businesses in the manufacturing, oil and gas, and wholesale sectors tax credit incentives to open up shop — up to a 30 percent tax credit in rural areas, 20 percent in urban areas for infrastructure investments and 50 percent for new construction.
Called Resolution 2014-947, the House bill would incentivize new business projects worth between $1 and $15 million by helping increase a company's ability to open its doors with more cash on hand, according to one of the bill's supporters.
Last month, Aztec commissioners unanimously supported the bill.
Ray Hagerman, CEO of Four Corners Economic Development, said the bill represents a vital tool in increasing new businesses and creating new jobs in San Juan County.
Hagerman said a small city like Aztec may not appear to benefit much from the tax credit, but it stands to gain indirect benefits from its passage.
"The optimum level of a project will be around $5 million or more, and from that perspective, Aztec is going to take advantage of it less than someone else," Hagerman said. "But say there's a $15 million project in Farmington that was going to create 75 to 80 new jobs. Some of those are going to be Aztec workers, who will take wages back to Aztec and deliver gross receipts taxes, as one example, back into the community."
At a meeting last month with economic development partners in the county, the idea of a tax credit for new development had overwhelming support, Hagerman said.
"I'd say on an annualized basis it might enable probably somewhere in the neighborhood of $10 million or as many as 50 to 100 jobs in the community that would not happen otherwise," he said. "This is probably one of the better proposals we've seen in quite a while. I really hope the Legislature will accept it. I really can't imagine why anyone anywhere in New Mexico would be against this."
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