HIGH-WAGE JOB TAX CREDIT DATES

HB0145

HOUSE BILL 145

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Joshua N. Hernandez
and
Meredith A. Dixon

AN ACT

RELATING TO TAXATION; EXTENDING THE DATE OF ELIGIBILITY FOR THE
HIGH-WAGE JOBS TAX CREDIT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1.
Section 7-9G-1 NMSA 1978 (being Laws 2004,
Chapter 15, Section 1, as amended by Laws 2025, Chapter 107,
Section 1 and by Laws 2025, Chapter 130, Section 93) is amended
to read:

"7-9G-1. HIGH-WAGE JOBS TAX CREDIT--QUALIFYING HIGH-WAGE
JOBS.--

A. A taxpayer that is an eligible employer may
apply for, and the department may allow, a tax credit for each
new high-wage job. The credit provided in this section may be
referred to as the "high-wage jobs tax credit".

B. The purpose of the high-wage jobs tax credit is
to provide an incentive for businesses to create and fill new
high-wage jobs in New Mexico.

C. The high-wage jobs tax credit may be claimed and
allowed in an amount equal to eight and one-half percent of the
wages distributed to an eligible employee in a new high-wage
job but shall not exceed twelve thousand seven hundred fifty
dollars ($12,750) per job per qualifying period. The high-wage
jobs tax credit may be claimed by an eligible employer for each
new high-wage job performed for the year in which the new high-wage job is created and for consecutive qualifying periods.

D. To receive a high-wage jobs tax credit, a
taxpayer shall file a completed application for approval of the
credit with the department once per calendar year on forms and
in the manner prescribed by the department. The annual
application shall contain the certification required by
Subsection K of this section and shall contain all qualifying
periods that closed during the calendar year for which the
application is made. Any qualifying period that did not close
in the calendar year for which the application is made shall be
denied by the department. The application for a calendar year
shall be filed no later than December 31 of the following
calendar year. If a taxpayer fails to file the annual
application within the time limits provided in this section,
the application shall be denied by the department.

E. A new high-wage job shall not be eligible for a
credit pursuant to this section for the initial qualifying
period unless the eligible employer's total number of employees
with threshold jobs on the last day of the initial qualifying
period at the location at which the job is performed or based
is at least one more than the number of threshold jobs on the
day prior to the date the new high-wage job was created. A new
high-wage job shall not be eligible for a credit pursuant to
this section for a consecutive qualifying period unless the
total number of threshold jobs at a location at which the job
is performed or based on the last day of that qualifying period
is greater than or equal to the number of threshold jobs at
that same location on the last day of the initial qualifying
period for the new high-wage job.

F. If a consecutive qualifying period for a new
high-wage job does not meet the wage, occupancy and residency
requirements, then the qualifying period is ineligible.

G. Except as provided in Subsection H of this
section, a new high-wage job shall not be eligible for a credit
pursuant to this section if:

(1) the new high-wage job is created due to a
business merger or acquisition or other change in business
organization;

(2) the eligible employee was terminated from
employment in New Mexico by another employer involved in the
business merger or acquisition or other change in business
organization with the taxpayer; and

(3) the new high-wage job is performed by:

(a) the person who performed the job or
its functional equivalent prior to the business merger or
acquisition or other change in business organization; or

(b) a person replacing the person who
performed the job or its functional equivalent prior to a
business merger or acquisition or other change in business
organization.

H. A new high-wage job that was created by another
employer and for which an application for the high-wage jobs
tax credit was received and is under review by the department
prior to the time of the business merger or acquisition or
other change in business organization shall remain eligible for
the high-wage jobs tax credit for the balance of the
consecutive qualifying periods. The new employer that results
from a business merger or acquisition or other change in
business organization may only claim the high-wage jobs tax
credit for the balance of the consecutive qualifying periods
for which the new high-wage job is otherwise eligible.

I. A new high-wage job shall not be eligible for a
credit pursuant to this section if the job is created due to an
eligible employer entering into a contract or becoming a
subcontractor to a contract with a governmental entity that
replaces one or more entities performing functionally
equivalent services for the governmental entity unless the job
is a new high-wage job that was not being performed by an
employee of the replaced entity.

J. A new high-wage job shall not be eligible for a
credit pursuant to this section if the eligible employer has
more than one business location in New Mexico from which it
conducts business and the requirements of Subsection E of this
section are satisfied solely by moving the job from one
business location of the eligible employer in New Mexico to
another business location of the eligible employer in New
Mexico.

K. With respect to each annual application for a
high-wage jobs tax credit, the employer shall certify and
include:

(1) the amount of wages paid to each eligible
employee in a new high-wage job during the qualifying period;

(2) the number of weeks each position was
occupied during the qualifying period;

(3) whether the new high-wage job was in a
municipality with a population of sixty thousand or more or
with a population of less than sixty thousand according to the
most recent federal decennial census and whether the job was in
the unincorporated area of a county;

(4) which qualifying period the application
pertains to for each eligible employee;

(5) the total number of employees employed by
the employer at the job location on the day prior to the
qualifying period and on the last day of the qualifying period;

(6) the total number of threshold jobs
performed or based at the eligible employer's location on the
day prior to the qualifying period and on the last day of the
qualifying period;

(7) for an eligible employer that has more
than one business location in New Mexico from which it conducts
business, the total number of threshold jobs performed or based
at each business location of the eligible employer in New
Mexico on the day prior to the qualifying period and on the
last day of the qualifying period;

(8) whether the eligible employer is receiving
or is eligible to receive development training program
assistance pursuant to Section 21-19-7 NMSA 1978;

(9) whether the eligible employer has ceased
business operations at any of its business locations in New
Mexico; and

(10) whether the application is precluded by
Subsection O of this section.

L. Any person who willfully submits a false,
incorrect or fraudulent certification required pursuant to
Subsection K of this section shall be subject to all applicable
penalties under the Tax Administration Act, except that the
amount on which the penalty is based shall be the total amount
of credit requested on the application for approval.

M. Except as provided in Subsection N of this
section, an approved high-wage jobs tax credit shall be claimed
against the taxpayer's modified combined tax liability and
shall be filed with the return due immediately following the
date of the credit approval. If the credit exceeds the
taxpayer's modified combined tax liability, the excess shall be
refunded to the taxpayer.

N. If the taxpayer ceases business operations in
New Mexico while an application for credit approval is pending
or after an application for credit has been approved for any
qualifying period for a new high-wage job, the department shall
not grant an additional high-wage jobs tax credit to that
taxpayer except as provided in Subsection O of this section and
shall extinguish any amount of credit approved for that
taxpayer that has not already been claimed against the
taxpayer's modified combined tax liability.

O. A taxpayer that has received a high-wage jobs
tax credit shall not submit a new application for the credit
for a minimum of two calendar years from the closing date of
the last qualifying period for which the taxpayer received the
credit if the taxpayer lost eligibility to claim the credit
from a previous application pursuant to Subsection N of this
section.

P. The economic development department and the
taxation and revenue department shall report to the appropriate
interim legislative committee each year the cost of the high-wage jobs tax credit to the state and its impact on company
recruitment and job creation.

Q. As used in this section:

(1) "benefits" means all remuneration for work
performed that is provided to an employee in whole or in part
by the employer, other than wages, including the employer's
contributions to insurance programs, health care, medical,
dental and vision plans, life insurance, employer contributions
to pensions, such as a 401(k), and employer-provided services,
such as child care, offered by an employer to the employee;

(2) "consecutive qualifying period" means each
of the three qualifying periods successively following the
qualifying period in which the new high-wage job was created;

(3) "department" means the taxation and
revenue department;

(4) "dependent" means "dependent" as defined
in 26 U.S.C. 152(a), as that section may be amended or
renumbered;

(5) "domicile" means the sole place where an
individual has a true, fixed, permanent home. It is the place
where the individual has a voluntary, fixed habitation of self
and family with the intention of making a permanent home;

(6) "eligible employee" means an individual
who is employed in New Mexico by an eligible employer and who
is a resident of New Mexico; "eligible employee" does not
include an individual who:

(a) is a dependent of the employer;

(b) if the employer is an estate or
trust, is a grantor, beneficiary or fiduciary of the estate or
trust or is a dependent of a grantor, beneficiary or fiduciary
of the estate or trust;

(c) if the employer is a corporation, is
a dependent of an individual who owns, directly or indirectly,
more than fifty percent in value of the outstanding stock of
the corporation; or

(d) if the employer is an entity other
than a corporation, estate or trust, is a dependent of an
individual who owns, directly or indirectly, more than fifty
percent of the capital and profits interests in the entity;

(7) "eligible employer" means an employer
that, during the applicable qualifying period, would be
eligible for development training program assistance under the
fiscal year 2019 policies defining development training program
eligibility developed by the industrial training board in
accordance with Section 21-19-7 NMSA 1978;

(8) "modified combined tax liability" means
the total liability for the reporting period for the gross
receipts tax imposed by Section 7-9-4 NMSA 1978 together with
any tax collected at the same time and in the same manner as
the gross receipts tax, such as the compensating tax, the
withholding tax, the interstate telecommunications gross
receipts tax, the surcharges imposed by Section 63-9D-5 NMSA
1978 and the surcharge imposed by Section 63-9F-11 NMSA 1978,
minus the amount of any credit other than the high-wage jobs
tax credit applied against any or all of these taxes or
surcharges; but "modified combined tax liability" excludes all
amounts collected with respect to local option gross receipts
taxes;

(9) "new high-wage job" means a new job
created in New Mexico by an eligible employer on or after July
1, 2004 and prior to July 1, [
2026
]
2036
that is occupied for
at least forty-four weeks of a qualifying period by an eligible
employee who is paid wages calculated for the qualifying period
to be at least:

(a) sixty thousand dollars ($60,000) if
the job is performed or based in or within ten miles of the
external boundaries of a municipality with a population of
sixty thousand or more according to the most recent federal
decennial census or in a class H county; and

(b) forty thousand dollars ($40,000) if
the job is performed or based in a municipality with a
population of less than sixty thousand according to the most
recent federal decennial census or in the unincorporated area,
that is not within ten miles of the external boundaries of a
municipality with a population of sixty thousand or more, of a
county other than a class H county;

(10) "new job" means a job that is occupied by
an employee who has not been employed in New Mexico by the
eligible employer in the three years prior to the date of hire;

(11) "qualifying period" means the period of
twelve months beginning on the day an eligible employee begins
working in a new high-wage job or the period of twelve months
beginning on the anniversary of the day an eligible employee
began working in a new high-wage job;

(12) "resident" means a natural person whose
domicile is in New Mexico at the time of hire or within one
hundred eighty days of the date of hire;

(13) "threshold job" means a job that:

(a) is occupied for at least forty-four
weeks of the first fifty-two weeks of employment by an eligible
employee; provided that the fifty-two-week period begins on the
day the eligible employee occupies the job; and

(b) meets the wage requirements for a
"new high-wage job"; and

(14) "wages" means all compensation paid by an
eligible employer to an eligible employee through the
employer's payroll system, including those wages that the
employee elects to defer or redirect or the employee's
contribution to a 401(k) or cafeteria plan program, but "wages"
does not include benefits or the employer's share of payroll
taxes, social security or medicare contributions, federal or
state unemployment insurance contributions or workers'
compensation."

SECTION 2.
APPLICABILITY.--The provisions of this act
apply to taxable years beginning on or after January 1, 2026.

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