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Legislation that would keep current 25% movie tax incentives in New Mexico but cap the cost at $50 million per year has taken another step forward.
Conferees from the state House of Representatives have accepted a version of the tax breaks that passed the state Senate earlier this week as part of a budget bill. It must now be signed by the governor, who had been asking for much larger cuts in the popular program to bring movie and TV production to New Mexico.
Republican Governor Susana Martinez, who has called the tax incentives “a giveaway the state can no longer afford” had proposed cutting the incentives to 15% of the spend from a movie’s budget in the state, and capping the total cost of the program at $45 million a year.
Her version passed the House initially but was not the one that made it through after the Senate approved a more generous version. In either case, this would be the first time that New Mexico has any cap on the amount of tax incentives that can be spent.
In 2009, the state spent $76.7 million on tax credits for 24 productions. That dropped to $65.9 million for 16 productions last year.
Even if the cap were $50 million, it would be a rolling credit, meaning the state could approve more than that in one year, with the additional cost rolling over into the net fiscal year.
If the governor were to veto the budget bill that includes this compromise, it would not eliminate the film tax incentives. Instead, it would eliminate any cap, because the old rules would remain intact.
For that, and other political reasons, it seems highly likely the governor will approve the new law. She has until April 8 to make her decision. The new rules would take effect as of July 1.
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