New Mexico’s angel investment tax credit gets 5-year extension
By Jacob Maranda – Energy and Technology Reporter for New Mexico Inno
New Mexico’s angel investment tax credit, a way to incentivize more early stage investment in the state, received a five-year extension as part of a larger tax package signed by Gov. Michelle Lujan Grisham on Wednesday.
House Bill 252, the omnibus tax package, extends the deadline for investments that qualify for the credit to Dec. 31, 2030. The previous deadline was Dec. 31, 2025.
A group of legislators — Rep. Meredith Dixon (D-Bernalillo), Rep. Linda Serrato (D-Santa Fe), Rep. Doreen Gallegos (D-Doña Ana), Rep. Dayan Hochman-Vigil (D-Bernalillo) and Rep. Joshua Hernandez (R-Sandoval) — introduced the extension in early January as House Bill 83. The provision was folded into the broader tax package later in the legislative session.
The credit allows accredited investors to claim an income tax credit of up to 25% of the amount of a qualified investment, up to $62,500. It’s limited to five investments per taxable year and one investment per round, according to the bill’s text, and comes with an aggregate cap of $2 million per calendar year.
Legislators had looked to increase that cap to $5 million while extending the investment deadline last year, although the 2023 bill, House Bill 69, died in committee.
Dixon, who co-sponsored both the 2024 and 2023 bills, said getting the extension was the most important thing this year. As she and other legislators and advocates continue education about the credit, Dixon said they’ll be in a better position to ask for more things in future legislative sessions, including increasing the aggregate angel investment credit cap.
The biggest benefit of having the angel investment credit, Dixon added, is supporting smaller companies in New Mexico that can help “diversify” the state’s economy.
One of the credit’s advocates is Drew Tulchin, the president of New Mexico Angels, an angel membership organization in the state. The Angels, Tulchin said, brought together an informal working committee to advocate for the bill, which included folks from the New Mexico Chamber of Commerce, the state Economic Development Department and other public and private sector stakeholders.
Over two dozen states have comparable angel investment tax credit programs, according to the Angel Capital Association. Tulchin said the process in New Mexico is more “stringent” than in many other states with similar programs; one of he and other advocates’ focuses going forward will be working with the Taxation and Revenue Department to improve clarity and ease transactions surrounding the credit program, he added, to ensure it’s “fully utilized.”
For instance, Tulchin said the angel investment credit could follow the structure of the state’s Film Production Tax Credit, which has helped grow the state’s film industry since being enacted in 2003.
Besides honing the credit process so it’s as “frictionless as possible,” Tulchin said other aspirations for the credit’s future include increasing its aggregate cap and having investors from outside the state be eligible to receive credits. The current credit is only available for taxpayers who file New Mexico income tax returns.
Angel investors invest their own money in very early stage companies in return for stock in those companies. Those investments can often be the first outside funding startups and small businesses receive.
Companies in New Mexico that have received angel investments and used angel investment credits include Albuquerque’s Build with Robots and Electric Playhouse and Las Cruces-based Ganymede Games. Companies looking to receive angel investments and use credits must apply with the Taxation and Revenue Department using a nine-page application form.
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