SENATE BILL 211

57th legislature - STATE OF NEW MEXICO - first session, 2025

INTRODUCED BY

Michael Padilla and William P. Soules and Meredith A. Dixon

and Joshua N. Hernandez and Joy Garratt

 

 

 

 

AN ACT

RELATING TO TAXATION; CREATING THE QUANTUM FACILITY INFRASTRUCTURE INCOME TAX CREDIT AND QUANTUM FACILITY INFRASTRUCTURE CORPORATE INCOME TAX CREDIT; PROVIDING A DELAYED REPEAL.

 

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

     SECTION 1. A new section of the Income Tax Act is enacted to read:

     "[NEW MATERIAL] QUANTUM FACILITY INFRASTRUCTURE INCOME TAX CREDIT.--

          A. For taxable years ending prior to January 1, 2035, a taxpayer who is not a dependent of another individual and who makes at least three million dollars ($3,000,000) in qualified expenditures for infrastructure for a quantum facility located in New Mexico may claim a credit against the taxpayer's tax liability imposed pursuant to the Income Tax Act in the amount provided in Subsection B of this section. The credit provided by this section may be referred to as the "quantum facility infrastructure income tax credit".

          B. Subject to the total aggregate amount allowed pursuant to Subsection D of this section, the amount of credit shall be in an amount equal to thirty percent of the amount of the qualified expenditures made by the taxpayer for infrastructure for a quantum facility, not to exceed fifty million dollars ($50,000,000) per quantum facility.

          C. Prior to incurring a qualified expenditure, a taxpayer shall apply for preliminary certification of eligibility for the credit from the economic development department on forms and in the manner prescribed by that department. Such preliminary certification shall be limited to confirming that the qualified expenditures proposed to be made by the taxpayer will in whole or in part be used to provide infrastructure for a quantum facility and an estimate of the amount of credit for which the taxpayer may be eligible. Only one certificate of eligibility shall be issued for a quantum facility, regardless of ownership of the facility.

          D. Within twelve months of completion of construction of a quantum facility, the taxpayer shall seek final certification from the economic development department. The maximum aggregate amount of quantum facility infrastructure income tax credits and quantum facility infrastructure corporate income tax credits that may be certified shall not exceed seventy-five million dollars ($75,000,000); provided that the maximum aggregate amount shall be increased to one hundred fifty million dollars ($150,000,000) in the calendar year the state is awarded a United States national science foundation regional innovation engines award for quantum technologies. An application for final certification shall include information required by the economic development department to determine eligibility for the credit, including information substantiating qualified expenditures. If that department determines that the taxpayer meets the requirements of this section, that department shall issue a dated certificate of eligibility to the taxpayer providing the amount of credit for which the taxpayer is eligible and the taxable years in which the credit may be claimed. The economic development department shall provide the department with the certificates of eligibility issued pursuant to this subsection in secure electronic format at regularly agreed-upon intervals.

          E. A taxpayer allowed to claim the credit shall claim the credit in a manner required by the department. The credit shall be claimed within one year of receiving final certification from the economic development department. The taxpayer shall claim the amount certified and approved against the taxpayer's income tax liability. Any amount of credit that exceeds the taxpayer's income tax liability shall be refunded to the taxpayer.

          F. Married individuals filing separate returns for a taxable year for which they could have filed a joint return may each claim only one-half of the credit that would have been claimed on a joint return.

          G. A taxpayer may be allocated the right to claim the credit in a proportion to the taxpayer's ownership interest if the taxpayer owns an interest in a business entity that is taxed for federal income tax purposes as a partnership or limited liability company and that business entity has met all of the requirements to be eligible for the credit. The total credit claimed by all members of the partnership or limited liability company shall not exceed the allowable credit pursuant to this section.

          H. As used in this section:

                (1) "qualified expenditure" means an expenditure made by a taxpayer for land and rent paid or incurred for land, improvements, buildings or infrastructure required for a quantum facility, but not including any expenditure for property that is owned by a municipality or county in connection with an industrial revenue bond project, property for which the taxpayer has received any credit pursuant to the Investment Credit Act or property that was owned by the taxpayer or an affiliate before January 1, 2025. If a "qualified expenditure" is an allocation of an expenditure, the cost accounting methodology used for the allocation of the expenditure shall be the same cost accounting methodology used by the taxpayer in its other business activities;

                (2) "quantum facility" means a facility in New Mexico at which research and development in quantum technology is conducted, other than a facility operated by a taxpayer for the United States or any agency, department or instrumentality thereof; and

                (3) "quantum technology" means technology that relies on quantum superposition or quantum entanglement or innovations that enable those technologies."

     SECTION 2. A new section of the Corporate Income and Franchise Tax Act is enacted to read:

     "[NEW MATERIAL] QUANTUM FACILITY INFRASTRUCTURE CORPORATE INCOME TAX CREDIT.--

          A. For taxable years ending prior to January 1, 2035, a taxpayer that makes at least three million dollars ($3,000,000) in qualified expenditures for infrastructure for a quantum facility located in New Mexico may claim a credit against the taxpayer's tax liability imposed pursuant to the Corporate Income and Franchise Tax Act in the amount provided in Subsection B of this section. The credit provided by this section may be referred to as the "quantum facility infrastructure corporate income tax credit".

          B. Subject to the total aggregate amount allowed pursuant to Subsection D of this section, the amount of credit shall be in an amount equal to thirty percent of the amount of the qualified expenditures made by the taxpayer for infrastructure for a quantum facility, not to exceed fifty million dollars ($50,000,000) per quantum facility.

          C. Prior to incurring a qualified expenditure, a taxpayer shall apply for preliminary certification of eligibility for the credit from the economic development department on forms and in the manner prescribed by that department. Such preliminary certification shall be limited to confirming that the qualified expenditures proposed to be made by the taxpayer will in whole or in part be used to provide infrastructure for a quantum facility and an estimate of the amount of credit for which the taxpayer may be eligible. Only one certificate of eligibility shall be issued for a quantum facility, regardless of ownership of the facility.

          D. Within twelve months of completion of construction of a quantum facility, the taxpayer shall seek final certification from the economic development department. The maximum aggregate amount of quantum facility infrastructure income tax credits and quantum facility infrastructure corporate income tax credits that may be certified shall not exceed seventy-five million dollars ($75,000,000); provided that the maximum aggregate amount shall be increased to one hundred fifty million dollars ($150,000,000) in the calendar year the state is awarded a United States national science foundation regional innovation engines award for quantum technologies. An application for final certification shall include information required by the economic development department to determine eligibility for the credit, including information substantiating qualified expenditures. If that department determines that the taxpayer meets the requirements of this section, that department shall issue a dated certificate of eligibility to the taxpayer providing the amount of credit for which the taxpayer is eligible and the taxable years in which the credit may be claimed. The economic development department shall provide the department with the certificates of eligibility issued pursuant to this subsection in secure electronic format at regularly agreed-upon intervals.

          E. A taxpayer allowed to claim the credit shall claim the credit in a manner required by the department. The credit shall be claimed within one year of receiving final certification from the economic development department. The taxpayer shall claim the amount certified and approved against the taxpayer's income tax liability. Any amount of credit that exceeds the taxpayer's income tax liability shall be refunded to the taxpayer.

          F. As used in this section:

                (1) "qualified expenditure" means an expenditure made by a taxpayer for land and rent paid or incurred for land, improvements, buildings or infrastructure required for a quantum facility, but not including any expenditure for property that is owned by a municipality or county in connection with an industrial revenue bond project, property for which the taxpayer has received any credit pursuant to the Investment Credit Act or property that was owned by the taxpayer or an affiliate before January 1, 2025. If a "qualified expenditure" is an allocation of an expenditure, the cost accounting methodology used for the allocation of the expenditure shall be the same cost accounting methodology used by the taxpayer in its other business activities;

                (2) "quantum facility" means a facility in New Mexico at which research and development in quantum technology is conducted, other than a facility operated by a taxpayer for the United States or any agency, department or instrumentality thereof; and

                (3) "quantum technology" means technology that relies on quantum superposition or quantum entanglement or innovations that enable those technologies."

     SECTION 3. DELAYED REPEAL.--Sections 1 and 2 of this act are repealed effective January 1, 2036.

     SECTION 4. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2025.

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