Biomass Equipment & Materials Compensating Tax Deduction (New Mexico)
Last modified on February 12, 2015.
Financial Incentive Program
|Name||Biomass Equipment & Materials Compensating Tax Deduction|
|Incentive Type||Sales Tax Incentive|
|Applicable Sector||Commercial, Industrial|
|Eligible Technologies||Landfill Gas, Biomass, Municipal Solid Waste, CHP/Cogeneration, Hydrogen, Anaerobic Digestion, Ethanol, Methanol, Biodiesel, Microturbines|
|Energy Category||Renewable Energy Incentive Programs|
|Amount||100% of value may be deducted for purposes of calculating Compensating Tax due|
|Program Administrator||New Mexico Taxation & Revenue Department|
|Date added to DSIRE||2005-04-29|
|Last DSIRE Review||2014-08-05|
|References||DSIREDatabase of State Incentives for Renewables and Efficiency|
In 2005, New Mexico adopted a policy to allow businesses to deduct the value of biomass equipment and biomass materials used for the processing of biopower, biofuels, or biobased products in determining the amount of Compensating Tax due.
New Mexico's Compensating Tax is an excise, or "use" tax, which is typically levied on the purchaser of the product or service for using tangible property in the state. The tax applies to imports of factory and office equipment, and other items. The rate is 5.125% on certain property used in New Mexico and 5% on certain services used in New Mexico. Compensating Tax is designed to protect New Mexico businesses from unfair competition from out-of-state business not subject to a sales or gross receipts tax. This biomass Compensating Tax deduction is analogous to a sales tax exemption for renewable energy equipment available in some other states.
Deductions from compensating tax do not have to be reported to the New Mexico Taxation and Revenue Department but records substantiating the deduction should be kept in the taxpayer's records.
|Contact Name||Information Specialist|
|Department||New Mexico Taxation & Revenue Department|
|Address||1100 South St. Francis Drive|
|Place||Santa Fe, New Mexico|
Authorities (Please contact the if there are any file problems.)
|Authority 1:||NM Stat. § 7-9-98|
- Incentive and policy data are reviewed and approved by the N.C. Solar Center's DSIRE project staff.