HB 145

                                1  HOUSE BILL 145
                                2     57TH LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 2026
                                3  INTRODUCED BY
                                4  Joshua N. Hernandez and Meredith A. Dixon
                                5
                                6
                                7
                                8
                                9
                                10  AN ACT
                                11   RELATING TO TAXATION; EXTENDING THE DATE OF ELIGIBILITY FOR THE
                                12   HIGH-WAGE JOBS TAX CREDIT.
                                13
                                14   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
                                15        SECTION 1.     Section 7-9G-1 NMSA 1978 (being Laws 2004,
                                16   Chapter 15, Section 1, as amended by Laws 2025, Chapter 107,
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                                17   Section 1 and by Laws 2025, Chapter 130, Section 93) is amended
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                                18   to read:
                                19        "7-9G-1.     HIGH-WAGE JOBS TAX CREDIT--QUALIFYING HIGH-WAGE
                                20   JOBS.--
                                21  A.    A taxpayer that is an eligible employer may
                                22   apply for, and the department may allow, a tax credit for each
                                23   new high-wage job.    The credit provided in this section may be
                                24   referred to as the "high-wage jobs tax credit".
                                25  B.    The purpose of the high-wage jobs tax credit is
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                                1    to provide an incentive for businesses to create and fill new
                                2    high-wage jobs in New Mexico.
                                3  C.     The high-wage jobs tax credit may be claimed and
                                4    allowed in an amount equal to eight and one-half percent of the
                                5    wages distributed to an eligible employee in a new high-wage
                                6    job but shall not exceed twelve thousand seven hundred fifty
                                7    dollars ($12,750) per job per qualifying period.     The high-wage
                                8    jobs tax credit may be claimed by an eligible employer for each
                                9    new high-wage job performed for the year in which the new high-
                                10   wage job is created and for consecutive qualifying periods.
                                11  D.     To receive a high-wage jobs tax credit, a
                                12   taxpayer shall file a completed application for approval of the
                                13   credit with the department once per calendar year on forms and
                                14   in the manner prescribed by the department.    The annual
                                15   application shall contain the certification required by
                                16   Subsection K of this section and shall contain all qualifying
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                                17   periods that closed during the calendar year for which the
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                                18   application is made.    Any qualifying period that did not close
                                19   in the calendar year for which the application is made shall be
                                20   denied by the department.    The application for a calendar year
                                21   shall be filed no later than December 31 of the following
                                22   calendar year.    If a taxpayer fails to file the annual
                                23   application within the time limits provided in this section,
                                24   the application shall be denied by the department.
                                25  E.     A new high-wage job shall not be eligible for a
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                                1    credit pursuant to this section for the initial qualifying
                                2    period unless the eligible employer's total number of employees
                                3    with threshold jobs on the last day of the initial qualifying
                                4    period at the location at which the job is performed or based
                                5    is at least one more than the number of threshold jobs on the
                                6    day prior to the date the new high-wage job was created.     A new
                                7    high-wage job shall not be eligible for a credit pursuant to
                                8    this section for a consecutive qualifying period unless the
                                9    total number of threshold jobs at a location at which the job
                                10   is performed or based on the last day of that qualifying period
                                11   is greater than or equal to the number of threshold jobs at
                                12   that same location on the last day of the initial qualifying
                                13   period for the new high-wage job.
                                14  F.    If a consecutive qualifying period for a new
                                15   high-wage job does not meet the wage, occupancy and residency
                                16   requirements, then the qualifying period is ineligible.
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                                17  G.    Except as provided in Subsection H of this
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                                18   section, a new high-wage job shall not be eligible for a credit
                                19   pursuant to this section if:
                                20  (1)   the new high-wage job is created due to a
                                21   business merger or acquisition or other change in business
                                22   organization;
                                23  (2)   the eligible employee was terminated from
                                24   employment in New Mexico by another employer involved in the
                                25   business merger or acquisition or other change in business
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                                1    organization with the taxpayer; and
                                2  (3)   the new high-wage job is performed by:
                                3  (a)   the person who performed the job or
                                4    its functional equivalent prior to the business merger or
                                5    acquisition or other change in business organization; or
                                6  (b)   a person replacing the person who
                                7    performed the job or its functional equivalent prior to a
                                8    business merger or acquisition or other change in business
                                9    organization.
                                10  H.    A new high-wage job that was created by another
                                11   employer and for which an application for the high-wage jobs
                                12   tax credit was received and is under review by the department
                                13   prior to the time of the business merger or acquisition or
                                14   other change in business organization shall remain eligible for
                                15   the high-wage jobs tax credit for the balance of the
                                16   consecutive qualifying periods.    The new employer that results
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                                17   from a business merger or acquisition or other change in
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                                18   business organization may only claim the high-wage jobs tax
                                19   credit for the balance of the consecutive qualifying periods
                                20   for which the new high-wage job is otherwise eligible.
                                21  I.    A new high-wage job shall not be eligible for a
                                22   credit pursuant to this section if the job is created due to an
                                23   eligible employer entering into a contract or becoming a
                                24   subcontractor to a contract with a governmental entity that
                                25   replaces one or more entities performing functionally
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                                1    equivalent services for the governmental entity unless the job
                                2    is a new high-wage job that was not being performed by an
                                3    employee of the replaced entity.
                                4  J.   A new high-wage job shall not be eligible for a
                                5    credit pursuant to this section if the eligible employer has
                                6    more than one business location in New Mexico from which it
                                7    conducts business and the requirements of Subsection E of this
                                8    section are satisfied solely by moving the job from one
                                9    business location of the eligible employer in New Mexico to
                                10   another business location of the eligible employer in New
                                11   Mexico.
                                12  K.   With respect to each annual application for a
                                13   high-wage jobs tax credit, the employer shall certify and
                                14   include:
                                15  (1)   the amount of wages paid to each eligible
                                16   employee in a new high-wage job during the qualifying period;
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                                17  (2)   the number of weeks each position was
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                                18   occupied during the qualifying period;
                                19  (3)   whether the new high-wage job was in a
                                20   municipality with a population of sixty thousand or more or
                                21   with a population of less than sixty thousand according to the
                                22   most recent federal decennial census and whether the job was in
                                23   the unincorporated area of a county;
                                24  (4)   which qualifying period the application
                                25   pertains to for each eligible employee;
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                                1  (5)    the total number of employees employed by
                                2    the employer at the job location on the day prior to the
                                3    qualifying period and on the last day of the qualifying period;
                                4  (6)    the total number of threshold jobs
                                5    performed or based at the eligible employer's location on the
                                6    day prior to the qualifying period and on the last day of the
                                7    qualifying period;
                                8  (7)    for an eligible employer that has more
                                9    than one business location in New Mexico from which it conducts
                                10   business, the total number of threshold jobs performed or based
                                11   at each business location of the eligible employer in New
                                12   Mexico on the day prior to the qualifying period and on the
                                13   last day of the qualifying period;
                                14  (8)    whether the eligible employer is receiving
                                15   or is eligible to receive development training program
                                16   assistance pursuant to Section 21-19-7 NMSA 1978;
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                                17  (9)    whether the eligible employer has ceased
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                                18   business operations at any of its business locations in New
                                19   Mexico; and
                                20  (10)   whether the application is precluded by
                                21   Subsection O of this section.
                                22  L.   Any person who willfully submits a false,
                                23   incorrect or fraudulent certification required pursuant to
                                24   Subsection K of this section shall be subject to all applicable
                                25   penalties under the Tax Administration Act, except that the
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                                1    amount on which the penalty is based shall be the total amount
                                2    of credit requested on the application for approval.
                                3  M.   Except as provided in Subsection N of this
                                4    section, an approved high-wage jobs tax credit shall be claimed
                                5    against the taxpayer's modified combined tax liability and
                                6    shall be filed with the return due immediately following the
                                7    date of the credit approval.   If the credit exceeds the
                                8    taxpayer's modified combined tax liability, the excess shall be
                                9    refunded to the taxpayer.
                                10  N.   If the taxpayer ceases business operations in
                                11   New Mexico while an application for credit approval is pending
                                12   or after an application for credit has been approved for any
                                13   qualifying period for a new high-wage job, the department shall
                                14   not grant an additional high-wage jobs tax credit to that
                                15   taxpayer except as provided in Subsection O of this section and
                                16   shall extinguish any amount of credit approved for that
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                                17   taxpayer that has not already been claimed against the
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                                18   taxpayer's modified combined tax liability.
                                19  O.   A taxpayer that has received a high-wage jobs
                                20   tax credit shall not submit a new application for the credit
                                21   for a minimum of two calendar years from the closing date of
                                22   the last qualifying period for which the taxpayer received the
                                23   credit if the taxpayer lost eligibility to claim the credit
                                24   from a previous application pursuant to Subsection N of this
                                25   section.
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                                1  P.   The economic development department and the
                                2    taxation and revenue department shall report to the appropriate
                                3    interim legislative committee each year the cost of the high-
                                4    wage jobs tax credit to the state and its impact on company
                                5    recruitment and job creation.
                                6  Q.   As used in this section:
                                7  (1)   "benefits" means all remuneration for work
                                8    performed that is provided to an employee in whole or in part
                                9    by the employer, other than wages, including the employer's
                                10   contributions to insurance programs, health care, medical,
                                11   dental and vision plans, life insurance, employer contributions
                                12   to pensions, such as a 401(k), and employer-provided services,
                                13   such as child care, offered by an employer to the employee;
                                14  (2)   "consecutive qualifying period" means each
                                15   of the three qualifying periods successively following the
                                16   qualifying period in which the new high-wage job was created;
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                                17  (3)   "department" means the taxation and
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                                18   revenue department;
                                19  (4)   "dependent" means "dependent" as defined
                                20   in 26 U.S.C. 152(a), as that section may be amended or
                                21   renumbered;
                                22  (5)   "domicile" means the sole place where an
                                23   individual has a true, fixed, permanent home.   It is the place
                                24   where the individual has a voluntary, fixed habitation of self
                                25   and family with the intention of making a permanent home;
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                                1  (6)   "eligible employee" means an individual
                                2    who is employed in New Mexico by an eligible employer and who
                                3    is a resident of New Mexico; "eligible employee" does not
                                4    include an individual who:
                                5  (a)    is a dependent of the employer;
                                6  (b)    if the employer is an estate or
                                7    trust, is a grantor, beneficiary or fiduciary of the estate or
                                8    trust or is a dependent of a grantor, beneficiary or fiduciary
                                9    of the estate or trust;
                                10  (c)    if the employer is a corporation, is
                                11   a dependent of an individual who owns, directly or indirectly,
                                12   more than fifty percent in value of the outstanding stock of
                                13   the corporation; or
                                14  (d)    if the employer is an entity other
                                15   than a corporation, estate or trust, is a dependent of an
                                16   individual who owns, directly or indirectly, more than fifty
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                                17   percent of the capital and profits interests in the entity;
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                                18  (7)   "eligible employer" means an employer
                                19   that, during the applicable qualifying period, would be
                                20   eligible for development training program assistance under the
                                21   fiscal year 2019 policies defining development training program
                                22   eligibility developed by the industrial training board in
                                23   accordance with Section 21-19-7 NMSA 1978;
                                24  (8)   "modified combined tax liability" means
                                25   the total liability for the reporting period for the gross
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                                1    receipts tax imposed by Section 7-9-4 NMSA 1978 together with
                                2    any tax collected at the same time and in the same manner as
                                3    the gross receipts tax, such as the compensating tax, the
                                4    withholding tax, the interstate telecommunications gross
                                5    receipts tax, the surcharges imposed by Section 63-9D-5 NMSA
                                6    1978 and the surcharge imposed by Section 63-9F-11 NMSA 1978,
                                7    minus the amount of any credit other than the high-wage jobs
                                8    tax credit applied against any or all of these taxes or
                                9    surcharges; but "modified combined tax liability" excludes all
                                10   amounts collected with respect to local option gross receipts
                                11   taxes;
                                12  (9)   "new high-wage job" means a new job
                                13   created in New Mexico by an eligible employer on or after July
                                14   1, 2004 and prior to July 1, [2026] 2036 that is occupied for
                                15   at least forty-four weeks of a qualifying period by an eligible
                                16   employee who is paid wages calculated for the qualifying period
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                                17   to be at least:
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                                18  (a)   sixty thousand dollars ($60,000) if
                                19   the job is performed or based in or within ten miles of the
                                20   external boundaries of a municipality with a population of
                                21   sixty thousand or more according to the most recent federal
                                22   decennial census or in a class H county; and
                                23  (b)   forty thousand dollars ($40,000) if
                                24   the job is performed or based in a municipality with a
                                25   population of less than sixty thousand according to the most
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                                1    recent federal decennial census or in the unincorporated area,
                                2    that is not within ten miles of the external boundaries of a
                                3    municipality with a population of sixty thousand or more, of a
                                4    county other than a class H county;
                                5  (10)   "new job" means a job that is occupied by
                                6    an employee who has not been employed in New Mexico by the
                                7    eligible employer in the three years prior to the date of hire;
                                8  (11)   "qualifying period" means the period of
                                9    twelve months beginning on the day an eligible employee begins
                                10   working in a new high-wage job or the period of twelve months
                                11   beginning on the anniversary of the day an eligible employee
                                12   began working in a new high-wage job;
                                13  (12)   "resident" means a natural person whose
                                14   domicile is in New Mexico at the time of hire or within one
                                15   hundred eighty days of the date of hire;
                                16  (13)   "threshold job" means a job that:
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                                17  (a)   is occupied for at least forty-four
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                                18   weeks of the first fifty-two weeks of employment by an eligible
                                19   employee; provided that the fifty-two-week period begins on the
                                20   day the eligible employee occupies the job; and
                                21  (b)   meets the wage requirements for a
                                22   "new high-wage job"; and
                                23  (14)   "wages" means all compensation paid by an
                                24   eligible employer to an eligible employee through the
                                25   employer's payroll system, including those wages that the
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                                1    employee elects to defer or redirect or the employee's
                                2    contribution to a 401(k) or cafeteria plan program, but "wages"
                                3    does not include benefits or the employer's share of payroll
                                4    taxes, social security or medicare contributions, federal or
                                5    state unemployment insurance contributions or workers'
                                6    compensation."
                                7  SECTION 2.   APPLICABILITY.--The provisions of this act
                                8    apply to taxable years beginning on or after January 1, 2026.
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