Recent Legislative Changes, June 2015: SB565
Program Amendments for Productions in Principal BEFORE January 1, 2016
Program Amendments for Productions beginning Principal ON or AFTER January 1, 2016
For all definitions, review: SB565.
Additional Definitions in Statute
An “affiliated person” means a person who directly or indirectly owns or controls, is owned or controlled by or is under common ownership or control with another person through ownership of voting securities or other ownership interests representing a majority of the total voting power of the entity.
A "background artist" means a person who is not a performing artist but is a person of atmospheric business whose
work includes atmospheric noise, normal actions, gestures and facial expressions of that person's assignment; or a person of
atmospheric business whose work includes special abilities that are not stunts; or a substitute for another actor, whether
photographed as a double or acting as a stand-in;
"Industry crew" means a person in a position that is off-camera and who provides technical services during
the physical production of a film. "Industry crew" does not include a writer, director, producer, background artist or
New Mexico “Resident" means an individual who is domiciled in this state during any part of the taxable year or an individual who is physically present in this state for one hundred eighty-five days or more during the taxable year; but any individual, other than someone who was physically present in the state for one hundred eighty-five days or more during the taxable year and who, on or before the last day of the taxable year, changed the individual's place of abode to a place without this state with the bona fide intention of continuing actually to abide permanently without this state is not a resident for the purposes of the Film Prod Tax Credit Act for periods after that change of abode.” What does this mean? You are deemed a resident only if you are filing (full-time, in-state) New Mexico Resident or First-Year Resident tax returns. (See "More on Residency" at the bottom of this webpage.)
"Personal services business" means a business organization, with or without physical presence, that receives payments pursuant to the Film Production Tax Credit Act for the services of a performing artist;
"Physical presence" means a physical address in New Mexico, but does not include a post office box, from which a vendor conducts business, stores inventory or otherwise creates, assembles or offers for sale the product purchased or leased by a film production company and the business owner or an employee of the business is a resident;
A "qualified production facility" means a building, or complex of buildings, building improvements and associated back-lot facilities in which films are or are intended to be regularly produced and that contain at least one: (1) sound stage with contiguous, clear-span floor space of at least seven thousand square feet and a ceiling height of no less than twenty-one feet; or, (2) standing set that includes at least one interior, and at least five exteriors, built or re-purposed for film production use on a continual basis and is located on at least fifty acres of contiguous space designated for film production use;
"Vendor" means a person selling goods or services that has a physical presence in New Mexico and is subject to gross receipts tax pursuant to the Gross Receipts and Compensating Tax Act and income tax pursuant to the Income Tax Act or corporate income tax pursuant to the Corporate Income and Franchise Tax Act...."
What if a New Mexico vendor doesn’t have any employees?
New Mexico vendors are not required to have employees (e.g. they are the owner and a resident); however, if they do, at least one of them must be a New Mexico resident. If the vendor has only one employee, that one employee must be a New Mexico resident.
More on Residency
NM Taxation & Revenue Department (NM TRD) provides a service to production to assist productions in determining the residency of an individual. Before production submit a signed Declaration of Residency (DOR) to NM TRD to receive an indication if the payment to that production member will qualify for the credit. Each New Mexico resident employed on your production (excluding Background Talent) must complete a DOR form, signed under penalty of perjury and stating that they are in fact a New Mexico resident, in order to qualify those payments. This form authorizes NM TRD to disclose their residency status to the production company, so the production can verify their residency status on the front end. (This form will also be submitted after production.)
In order for New Mexico residents to be creditable, they must be filing New Mexico Resident or First-Year Resident tax returns. Residents must also provide proof of residency, which must be one (1) of the following:
- A copy of last year’s New Mexico personal income tax return (filing as a Resident or First-Year Resident)
- A valid New Mexico driver’s license
- Voter registration card
- Other clear and convincing evidence showing intent to maintain a permanent residence in New Mexico
*If a crew member just moved here and is not in the NM TRD, production may consider relying on good faith that the new crew member will file a First-Year Resident tax return. However, if it is discovered that the applicant or any applicant filed a New Mexico Part-Year Resident or Non-Resident tax return, or if they have changed their residency to another state on or before the last day of the taxable year (December 31), or if NM TRD has other evidence indicating they are not a resident (even though they filled out a DOR form and provided proof), he/she will NOT qualify.
Please remember that the DOR is just a tool that we have created to assist you in determining residency; it is not a guarantee that the crew member will qualify for the credit. The film company can choose to obtain additional proofs of residency or set additional criteria – whatever is going to make the Production as certain as possible that they are residents or will be residents!
Send a copy of the DORs to NM TRD: email@example.com or 505 827 9801 fax. If you are emailing Jerry Montoya, be sure to write the names of the crew members in the body of the email.
TIP: Background talent (Extras) do not need to fill out Declaration of Residency forms (though in some cases, featured extras may be asked to fill out a DOR.) For the purposes of this incentive, New Mexico resident principal talent and all other qualifying residents, both full-time and first-year, will need a DOR for TRD to verify residency and for the production to qualify those payments.