To be eligible for the film production tax credit, a film production company must first be approved by the Film Division of the New Mexico Economic Development Department. After approval, the company may apply for the credit by submitting a completed Form RPD-41229, Application for Film Production Tax Credit, to the Taxation and Revenue Department (TRD). TRD approves the credit and issues a document granting it. The application must be submitted within one year of the date of the last direct production or postproduction expenditure in New Mexico.
To Claim the Approved Film Production Tax Credit. Once the approved film production company has received approval from the Film Division and the Taxation and Revenue Department, a completed Form RPD-41228, Film Production Tax Credit Claim Form, must be attached to a completed New Mexico return (Form PIT-1, CIT-1, S-Corp, or FID-1) filed after the close of the tax year for authorization for payment. For qualifying expenditures made after April 15, 2013, the credit may be claimed by filing the New Mexico PTE, Pass-Through Entity Income and Information Return. All direct production expenditures and postproduction expenditures incurred during the tax year by a film production company shall be submitted as part of the same income tax return. A credit claim shall not be divided and submitted with multiple returns or in multiple years. Subject to certain limitations, the amount of the tax credit authorized for payment may be applied to the tax due on the return, or if the amount of the film production tax credit exceeds the film production company's income tax liability for the tax year, the excess may be refunded.
Limitations on Receiving the Credit Claimed on a Return. Except as provided in the next paragraph, the total aggregate film production tax credits that may be paid out in any fiscal year is limited to $50,000,000. A film production tax credit claimed that is unable to be paid because total claims paid during the current fiscal year, exceeded $50,000,000, shall be placed at the front of the queue for the next fiscal year.
If in fiscal years 2013 through 2015, the aggregate amount in each fiscal year of the film production tax credit claims authorized for payment is less than $50,000,000, then the difference in that fiscal year or $10,000,000, whichever is less, shall be added to the aggregate amount of the film production tax credit claims that may be authorized for payment in the immediately following fiscal year.
If the credit amount claimed by a film company is less than $2,000,000 in a tax year, the amount shall be applied or paid immediately upon processing of the income tax return.
For credit claims of $2,000,000 or more in a tax year, the credit shall be distributed over multiple years as follows:
• If the credit amount claimed is $2,000,000 or more, but less than $5,000,000 in a tax year, half of the amount of the film production tax credit shall be applied or paid immediately upon processing of the income tax return and the remainder shall be paid 12 months following the date of the first payment, and
• If the credit amount claimed is $5,000,000 or more in a tax year, one third of the amount of the film production tax credit shall be applied or paid immediately upon processing of the income tax return, one third of the film production tax credit shall be paid 12 months following the date of the first payment, and one third of the film production tax credit shall be paid 24 months following the date of the first payment.
Any amount of a credit claim that is carried forward as described above, is also subject to the total aggregate film production tax credit limit of $50,000,000 paid in any fiscal year. However, the portion of the amount of credit that is carried forward is placed in front of the queue in the next fiscal year. If a partial payment is made because the tax credit limit has been met in a fiscal year, then the difference owed shall retain its original position in the queue. For purposes of determining the payment of credit claims that are required to be paid out over multiple years, the secretary of the Taxation and Revenue Department may require that credit claims of affiliated persons be combined into one claim, if necessary, to accurately reflect closely integrated activities of affiliated persons.
NOTE: No interest shall be paid on any amount refunded under the Film Production Tax Credit Act.