with full assistance by the New Mexico State Film Office and the
Taxation & Revenue Department throughout the entire process
Please take the time to review our website completely starting with the Introduction as listed under the Refundable Tax Credit section. These sub-links include the Tax FAQs, a helpful reference.
The New Mexico State Film Office determines whether a project is eligible to apply for the Refundable Film Production Tax Credit which includes determining the percentage of the credit that would apply to the qualifying expenditures for that project. While some states require the following, in New Mexico there is:
- No minimum spend requirement
- No minimum resident hire requirement
- No pre-qualifying
- No application fees
- No brokers needed
Note: at least one day of principal photography must take place in New Mexico.
General Requirements to Participate
For projects to be eligible for the incentive, the following must apply:
- The filing entity must be a "Film Production Company."
The definition of a “Film Production Company” is "a person that produces one or more films or any part of a film". This is the entity that is listed on the Film Office's project registration that incurs the costs for the project and then files for the credit.The filing entity (“film production company”) cannot be tax-exempt (i.e. a non-profit organization).
- The project must be a “film” or “commercial audiovisual product.”
“Film” means a single media or multimedia program, excluding advertising messages other than national or regional advertising messages intended for exhibition that is fixed on film, digital medium, videotape, computer disc, laser disc or other similar delivery medium; can be viewed or reproduced; is not intended to and does not violate a provision of Chapter 30, Article 37 NMSA 1978 (which relates to materials viewed by minors); and is intended for reasonable commercial exploitation for the delivery medium used. A "commercial audiovisual product” means a film or video game intended for commercial exploitation.
- The production must be intended for exhibition amd reasonable commercial exploitation. In other words, the project (or product) must be commercially viable - available to the public either via purchase or because media buys are in place. Examples include, but are not limited to, the intention for theatrical release, submission to film festivals for "pickup," television broadcast, and certain media subscriptions, etc.
The following types of production will qualify as long as the statements above apply:
- Feature films
- Independent films
- Television (MOW, pilots, series, reality)
- Certain Commercials and EPKs*
- Student films
- Short films
- Video games
- Music videos
- Content-Based Mobile Apps
- Standalone Post Production
Examples of types of projects that are not eligible: PSAs, print campaigns, trailers, promotional or marketing products, web design or development, live events, or commissioned projects for a single client.
*See the additional requirements under Key Points Per Project Types below
Applicable Percentage of Credit
30% Credit for Qualifying TV on Resident Labor for Certain Features
25% Credit for all Other Qualifying Projects
CHART: Applicable Percentage of Credit based on Project Type
A Production Company receives a confirmation of project eligibility for the 25% or 30% credit once a project registration form and tax agreement are submitted to the Film Office and reviewed. This happens before principal photography. (See also NM TAX CREDIT IN TEN STEPS & CHECKLIST.) Eligible projects that fulfill the required obligations receive a 25% or 30% credit on the total qualifying transactions (e.g. including Gross Receipts Tax when applicable.) Certain projects, other than qualifying television series and standalone pilots, that utilize qualified production facility may also be eligible for an additional 5% on resident services. See "Additional 5% Credit" section below.
Whereas the Film Office determines eligibility of the project and the corresponding percentage of credit, the NM Taxation & Revenue Department reviews the expenditures after production, to verify a transaction qualifies. The basic concept of this incentive is that the direct production and post production qualifying expenditures for the project are subject to state taxation for services rendered in New Mexico. Examples of applicable state taxes are Gross Receipts Tax (for sales and services), Fuel Tax, Property Tax, and Personal Income Tax. (See Qualifying Expenditures.)
Reminder: Project registration happens before production. A project submits the tax application to the Film Office after the project’s last qualifying expense is made for each tax year in which the project produces. Then, a review of those expenditures is completed by the NM Taxation and Revenue Department. After the close of the production company’s tax year, a state tax or informational return is filed. (See Receiving the Credit.)
The additional 5% (on top of the 25%) applies to:
- Features: For other types of productions (primarily features), the production may apply for an additional 5% on resident services (on top of the 25%) when a qualified production facility is used for a minimum number of principal photography days. The required number of days to be eligible is 10 days when the NM budget is less than $30 million, and it is 15 days when the NM budget is $30 million or more. A qualified production facility may be a soundstage or a standing set (per defined specs). Utilizing the standing set is not required; however, shooting on the premises of the qualifying soundstage for the majority of (or all of) the principal days is required.
- Standalone TV Pilots: For pilots that are not ordered straight-to-series, 30% applies to direct production expenditures (except nonresident actors whose payments qualify for 25%), WHEN the pilot is intended to be shot in New Mexico if it is picked up.
- Television Series: When a series has an order for at least six episodes to be shot in New Mexico, 30% applies to direct production expenditures (and in certain circumstances this includes payments to nonresident actors), WHEN the each of those episodes has an NM budget of at least $50,000.00.
*See additional eligibility requirements under Key Points Per Project Types at the end of this webpage.
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
All Projects: Additional Production Requirements:
Before the incentive can be processed, the following requirements must have been completed:
- The Production's post-accounting contact information has been posted online at nmfilm.com.
- Projects that have scrolling end credits contain an acknowledgment that the production was filmed in "the State of New Mexico."
- In addition to an acknowledgement, television episodes and long-form narrative films (e.g. features) must have included a state logo provided by the NM Film Office in the end credits (screen crawl).
- The Production paid all obligations the film production company has incurred in New Mexico and notified the film office when all obligations were paid (e.g. when the last check was "cut.")
- The Production submitted all information required by the film division to demonstrate conformity. (See NM Tax Credit in Ten Steps & Checklist.)
To assist in determining eligibility, below are additional considerations and requirements to the information provided above, as relates to specific project types:
- Commercials require a signed letter from the Ad Agency or Client, describing the relationship with the Production Company and confirming which entity is claiming the credit.
- Regional - Proof of more than one media buy is required. (Reminder, PSAs do not qualify.)
- National - Proof of national media buy is required.
- Internet - Proof of a media buy (as equates to "ad space") is required. Commercials only available on the client/owner's website do not qualify as they are considered promotional.
- EPKs may qualify if the production company filing for the EPK is not the company filing for the project featured in the EPK.
- If your commercial does not qualify, consider applying for NTTC Type 16s.
- Content-Based Mobile Applications:
- Software products are not considered Mobile Apps for the purpose of this incentive.
- Information must be provided as to who owns the content and creative elements created for the App.
- The App must be available to the public via an "app store" or for purchase.
- Be sure to apply for the credit each year in which expenses are incurred for the project, not at the project's end.
- Qualified Production Facilities:
- A “Qualified Production Facility” (QPF) allows up to 3 days of principal photography at the qualified standing set to count towards the 10 day requirement at the soundstages, and allows up to 5 days towards the 15 day requirement.
- “Principal days” means that crew members are working at least 8 hours within a 24 hour period at the QPF and that talent is on camera within those 8 hours (call time to strike). Ultimately, the production rents the location for the day whether it is used for a half or a whole day of shooting (as verified on the call sheets or production reports).
- See Definitions for specs of QPFs - currently, 4 soundstages and 3 standing sets (i.e. established Western Towns) qualify as QPFs.
- Principal photography may occur anywhere on the premises of the owned and designated property when utilizing a soundstage as a QPF. It is not restricted to stagework.
- A budget top sheet, for production in NM, and call sheets must be submitted to the film office to confirm the eligibility.
- Once the eligibility requirements are met, the applicable direct production expenditures are the qualifying payments made to off-camera NM residents for the duration of production and their services in-state.
- ATL residents have a stricter residency requirement when qualifying those payments for the additional 5%. Resident Producers, Writers, and/or Directors must have filed their NM Personal Income Tax return as a full-time, in-state resident in the two previous tax years. (Confirmed by NM TRD.)
- ATL that are "First Year Residents" cannot be qualified for this additional incentive.
- Standalone Television Pilots:
- Pilots that are not going straight-to-series require a signed letter from Parent Company verifying the production is intending production of the series in New Mexico if the Pilot is "picked up" and ordered to series.
- If the Pilot is shot in NM but the first season is not shot in NM, the Pilot will not be eligible for the additional 5%. Exceptions may be considered by the Director under extenuating and unforeseen circumstances (e.g. re-casting).
- Standalone Post Production
- When projects are not shot in NM but Post Production services only are rendered here, a signed letter is required from the Client describing the relationship with the Post House and confirming which entity is claiming the credit.
- Standalone Post Production requires a separate Tax Agreement than other project types.
- Television Series
- For the additional 5% to apply to a Television Series, the Production Company must provide a title list of all episodes that have or will shot in New Mexico prior to submitting the tax application after production. The Pilot is considered as part of the minimum requirement of 6 episodes when production is shooting "straight-to-series."
- For the additional 5%, the Parent or Production Company must also provide a NM budget per each episode in the order of 6, which may equate to a top sheet (per episode). This is needed to determine if the minimum budget requirement of $50k per episode will be met as a condition of eligibility.
- For the additional 5% to apply to nonresident actors, the Production Company must produce more than one television series in a given tax year: (1) a television series completes at least one season of the scheduled episodes for that series in NM and (2) the Film Production Company certifies the intention to begin or produce (at least one) subsequent, different series in NM. Please contact the NMFO Director for more details.
The Tax FAQs is a helpful reference.
For additional production and incentive questions, please contact the Film Office at 505-476-5600.
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