Bill > SB337

This bill establishes a new "small business investment income tax credit" for New Mexico taxpayers who are accredited investors, meaning they meet specific federal income and net worth requirements, and make a qualified investment in a New Mexico-based small business. The credit can be up to 25% of a qualified investment, with a maximum investment of $250,000 per taxpayer, and is intended to encourage investment in emerging businesses within the state. To claim the credit, taxpayers must first obtain a certificate of eligibility from the economic development department, which will verify the investor's status and the business's qualifications, ensuring that the total amount of credits issued annually does not exceed $2 million. The bill defines a "qualified business" as one with its principal operations and majority of employees and assets in New Mexico, not engaged in certain excluded industries like finance or real estate, not publicly traded or subject to extensive federal reporting, and having 100 or fewer employees and less than $5 million in gross revenue in the preceding fiscal year. A "qualified investment" is defined as a cash investment for equity in such a business, excluding investments where the investor or their affiliates receive compensation for services to the business within a year of the investment. The credit can be claimed for up to five different qualified investments per year, and for up to three years for investments in the same business, with unused credit amounts able to be carried forward for up to five years, and the provisions apply to taxable years beginning on or after January 1, 2015, with a sunset date for investments made after December 31, 2021.