2023 New Mexico Statutes › Chapter 7 - Taxation › Article 2 - Income Tax General Provisions › Section 7-2-18.19 - Sustainable building tax credit.

A. The tax credit provided by this section may be referred to as the "sustainable building tax credit". The sustainable building tax credit shall be available for the construction in New Mexico of a sustainable building, the renovation of an existing building in New Mexico into a sustainable building or the permanent installation of manufactured housing, regardless of where the housing is manufactured, that is a sustainable building. The tax credit provided in this section may not be claimed with respect to the same sustainable building for which the sustainable building tax credit provided in the Corporate Income and Franchise Tax Act [Chapter 7, Article 2A NMSA 1978] has been claimed.
B. The purpose of the sustainable building tax credit is to encourage the construction of sustainable buildings and the renovation of existing buildings into sustainable buildings.
C. A taxpayer who files an income tax return is eligible to be granted a sustainable building tax credit by the department if the taxpayer submits a document issued pursuant to Subsection J of this section with the taxpayer's income tax return.
D. For taxable years ending on or before December 31, 2016, the sustainable building tax credit may be claimed with respect to a sustainable commercial building. The credit shall be calculated based on the certification level the building has achieved in the LEED green building rating system and the amount of qualified occupied square footage in the building, as indicated on the following chart:
LEED Rating Level
Qualified
Occupied
Square Footage
Tax Credit
per Square
Foot
LEED-NC Silver
First 10,000
Next 40,000
Over 50,000
up to 500,000
$3.50
$1.75
$.70
LEED-NC Gold
First 10,000
Next 40,000
Over 50,000
up to 500,000
$4.75
$2.00
$1.00
LEED-NC Platinum
First 10,000
Next 40,000
Over 50,000
up to 500,000
$6.25
$3.25
$2.00
LEED-EB or CS Silver
First 10,000
Next 40,000
Over 50,000
up to 500,000
$2.50
$1.25
$.50
LEED-EB or CS Gold
First 10,000
Next 40,000
Over 50,000
up to 500,000
$3.35
$1.40
$.70
LEED-EB or CS Platinum
First 10,000
Next 40,000
Over 50,000
up to 500,000
$4.40
$2.30
$1.40
LEED-CI Silver
First 10,000
Next 40,000
Over 50,000
up to 500,000
$1.40
$.70
$.30
LEED-CI Gold
First 10,000
Next 40,000
Over 50,000
up to 500,000
$1.90
$.80
$.40
LEED-CI Platinum
First 10,000
Next 40,000
Over 50,000
up to 500,000
$2.50
$1.30
$.80
E. For taxable years ending on or before December 31, 2016, the sustainable building tax credit may be claimed with respect to a sustainable residential building. The credit shall be calculated based on the amount of qualified occupied square footage, as indicated on the following chart:
Qualified
Occupied
Square Footage
Tax Credit
per Square
Foot
LEED-H Silver or Build
Green NM Silver
LEED-H Gold or Build
Green NM Gold
LEED-H Platinum or Build
Green NM Emerald
EPA ENERGY STAR
Manufactured Housing
First 2,000
Next 1,000
First 2,000
Next 1,000
First 2,000
Next 1,000
Up to 3,000
$5.00
$2.50
$6.85
$3.40
$9.00
$4.45
$3.00.
F. A person that is a building owner may apply for 1a certificate of eligibility for the sustainable building tax credit from the energy, minerals and natural resources department after the construction, installation or renovation of the sustainable building is complete. Applications shall be considered in the order received. If the energy, minerals and natural resources department determines that the building owner meets the requirements of this subsection and that the building with respect to which the tax credit application is made meets the requirements of this section as a sustainable residential building or a sustainable commercial building, the energy, minerals and natural resources department may issue a certificate of eligibility to the building owner, subject to the limitation in Subsection G of this section. The certificate shall include the rating system certification level awarded to the building, the amount of qualified occupied square footage in the building and a calculation of the maximum amount of sustainable building tax credit for which the building owner would be eligible. The energy, minerals and natural resources department may issue rules governing the procedure for administering the provisions of this subsection. If the certification level for the sustainable residential building is awarded on or after January 1, 2007, the energy, minerals and natural resources department may issue a certificate of eligibility to a building owner who is:
(1) the owner of the sustainable residential building at the time the certification level for the building is awarded; or
(2) the subsequent purchaser of a sustainable residential building with respect to which no tax credit has been previously claimed.
G. The energy, minerals and natural resources department may issue a certificate of eligibility only if the total amount of sustainable building tax credits represented by certificates of eligibility issued by the energy, minerals and natural resources department pursuant to this section and pursuant to the Corporate Income and Franchise Tax Act shall not exceed in any calendar year an aggregate amount of one million dollars ($1,000,000) with respect to sustainable commercial buildings and an aggregate amount of four million dollars ($4,000,000) with respect to sustainable residential buildings; provided that no more than one million two hundred fifty thousand dollars ($1,250,000) of the aggregate amount with respect to sustainable residential buildings shall be for manufactured housing. If for any taxable year the energy, minerals and natural resources department determines that the applications for sustainable building tax credits with respect to sustainable residential buildings for that taxable year exceed the aggregate limit set in this section, the energy, minerals and natural resources department may issue certificates of eligibility under the aggregate annual limit for sustainable commercial buildings to owners of sustainable residential buildings that meet the requirements of the energy, minerals and natural resources department and of this section; provided that applications for sustainable building credits for other sustainable commercial buildings total less than the full amount allocated for tax credits for sustainable commercial buildings.
H. Installation of a solar thermal system or a photovoltaic system eligible for the solar market development tax credit pursuant to Section 7-2-18.14 NMSA 1978 may not be used as a component of qualification for the rating system certification level used in determining eligibility for the sustainable building tax credit, unless a solar market development tax credit pursuant to Section 7-2-18.14 NMSA 1978 has not been claimed with respect to that system and the building owner and the taxpayer claiming the sustainable building tax credit certify that such a tax credit will not be claimed with respect to that system.
I. To be eligible for the sustainable building tax credit, the building owner shall provide to the taxation and revenue department a certificate of eligibility issued by the energy, minerals and natural resources department pursuant to the requirements of Subsection F of this section and any other information the taxation and revenue department may require to determine the amount of the tax credit for which the building owner is eligible.
J. If the requirements of this section have been complied with, the department shall issue to the building owner a document granting a sustainable building tax credit. The document shall be numbered for identification and declare its date of issuance and the amount of the tax credit allowed pursuant to this section. The document may be submitted by the building owner with that taxpayer's income tax return, if applicable, or may be sold, exchanged or otherwise transferred to another taxpayer. The parties to such a transaction shall notify the department of the sale, exchange or transfer within ten days of the sale, exchange or transfer.
K. If the total approved amount of all sustainable building tax credits for a taxpayer in a taxable year represented by the documents issued pursuant to Subsection J of this section is:
(1) less than one hundred thousand dollars ($100,000), a maximum of twenty-five thousand dollars ($25,000) shall be applied against the taxpayer's income tax liability for the taxable year for which the credit is approved and the next three subsequent taxable years as needed depending on the amount of credit; or
(2) one hundred thousand dollars ($100,000) or more, increments of twenty-five percent of the total credit amount in each of the four taxable years, including the taxable year for which the credit is approved and the three subsequent taxable years, shall be applied against the taxpayer's income tax liability.
L. If the sum of all sustainable building tax credits that can be applied to a taxable year for a taxpayer, calculated according to Paragraph (1) or (2) of Subsection K of this section, exceeds the taxpayer's income tax liability for that taxable year, the excess may be carried forward for a period of up to seven years.
M. A taxpayer who otherwise qualifies and claims a sustainable building tax credit with respect to a sustainable building owned by a partnership or other business association of which the taxpayer is a member may claim a credit only in proportion to that taxpayer's interest in the partnership or association. The total credit claimed in the aggregate by all members of the partnership or association with respect to the sustainable building shall not exceed the amount of the credit that could have been claimed by a sole owner of the property.
N. A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the sustainable building tax credit that would have been allowed on a joint return.
O. The department shall compile an annual report on the sustainable building tax credit created pursuant to this section that shall include the number of taxpayers approved by the department to receive the tax credit, the aggregate amount of tax credits approved and any other information necessary to evaluate the effectiveness of the tax credit. Beginning in 2015 and every five years thereafter, the department shall compile and present the annual reports to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the effectiveness and cost of the tax credit and whether the tax credit is performing the purpose for which it was created.
P. For the purposes of this section:
(1) "build green New Mexico rating system" means the certification standards adopted by the homebuilders association of central New Mexico;
(2) "LEED-CI" means the LEED rating system for commercial interiors;
(3) "LEED-CS" means the LEED rating system for the core and shell of buildings;
(4) "LEED-EB" means the LEED rating system for existing buildings;
(5) "LEED gold" means the rating in compliance with, or exceeding, the second-highest rating awarded by the LEED certification process;
(6) "LEED" means the most current leadership in energy and environmental design green building rating system guidelines developed and adopted by the United States green building council;
(7) "LEED-H" means the LEED rating system for homes;
(8) "LEED-NC" means the LEED rating system for new buildings and major renovations;
(9) "LEED platinum" means the rating in compliance with, or exceeding, the highest rating awarded by the LEED certification process;
(10) "LEED silver" means the rating in compliance with, or exceeding, the third-highest rating awarded by the LEED certification process;
(11) "manufactured housing" means a multisectioned home that is:
(a) a manufactured home or modular home;
(b) a single-family dwelling with a heated area of at least thirty-six feet by twenty-four feet and a total area of at least eight hundred sixty-four square feet;
(c) constructed in a factory to the standards of the United States department of housing and urban development, the National Manufactured Housing Construction and Safety Standards Act of 1974 and the Housing and Urban Development Zone Code 2 or New Mexico construction codes up to the date of the unit's construction; and
(d) installed consistent with the Manufactured Housing Act [Chapter 60, Article 14 NMSA 1978] and rules adopted pursuant to that act relating to permanent foundations;
(12) "qualified occupied square footage" means the occupied spaces of the building as determined by:
(a) the United States green building council for those buildings obtaining LEED certification;
(b) the administrators of the build green New Mexico rating system for those homes obtaining build green New Mexico certification; and
(c) the United States environmental protection agency for ENERGY STAR-certified manufactured homes;
(13) "person" does not include state, local government, public school district or tribal agencies;
(14) "sustainable building" means either a sustainable commercial building or a sustainable residential building;
(15) "sustainable commercial building" means a multifamily dwelling unit, as registered and certified under the LEED-H or build green New Mexico rating system, that is certified by the United States green building council as LEED-H silver or higher or by build green New Mexico as silver or higher and has achieved a home energy rating system index of sixty or lower as developed by the residential energy services network or a building that has been registered and certified under the LEED-NC, LEED-EB, LEED-CS or LEED-CI rating system and that:
(a) is certified by the United States green building council at LEED silver or higher;
(b) achieves any prerequisite for and at least one point related to commissioning under LEED "energy and atmosphere", if included in the applicable rating system; and
(c) has reduced energy consumption, as follows: 1) through 2011, a fifty percent energy reduction will be required based on the national average for that building type as published by the United States department of energy; and beginning January 1, 2012, a sixty percent energy reduction will be required based on the national average for that building type as published by the United States department of energy; and 2) is substantiated by the United States environmental protection agency target finder energy performance results form, dated no sooner than the schematic design phase of development;
(16) "sustainable residential building" means:
(a) a building used as a single-family residence as registered and certified under the build green New Mexico or LEED-H rating system that: 1) is certified by the United States green building council as LEED-H silver or higher or by build green New Mexico as silver or higher; and 2) has achieved a home energy rating system index of sixty or lower as developed by the residential energy services network; or
(b) manufactured housing that is ENERGY STAR-qualified by the United States environmental protection agency; and
(17) "tribal" means of, belonging to or created by a federally recognized Indian nation, tribe or pueblo.
History:
Laws 2007, ch. 204, § 3; 2009, ch. 59, § 1; 2013, ch. 92, § 1.
ANNOTATIONS
The 2013 amendment,
effective January 1, 2014, extended the sustainable building tax credit for three years; decreased the maximum aggregate calendar year amount of sustainable building tax credit for which a certificate of eligibility may be issued; changed provisions for application of the tax credit; added Subsection B; in Subsection D, in the first sentence, at the beginning of the sentence, deleted "The amount of" and added "For taxable years ending on or before December 31, 2016"; in Subsection E, in the first sentence, deleted "The amount of" and added "For taxable years ending on or before December 31, 2016"; in Subsection G, in the first sentence, after "any calendar year an aggregate amount of", deleted "five million dollars ($5,000,000)" and added "one million dollars ($1,000,000)" and after "commercial buildings and an aggregate amount of", deleted "five million dollars ($5,000,000)" and added "four million dollars ($4,000,000)" and in the second sentence, after "sustainable commercial buildings to", deleted "building" and after "commercial buildings to owners of", deleted "multifamily dwelling units" and added "sustainable residential buildings"; deleted former Subsection J, which provided for the application of the sustainable building tax credit over a period of four to seven years; deleted former Subsection K, which provided for the application of the sustainable building tax credit of less than twenty five in a single taxable year; added Subsections K, L and O; in Paragraph (15) of Subsection P, added the language between "means" and "a building that has been registered"; and deleted former Subparagraph (b) of Paragraph 16 of Subsection P, which was the same language that was added to the definition of "sustainable commercial building" in Paragraph (15) of Subsection P.
Applicability.
— Laws 2013, ch. 92, § 3 amended Laws 2007, ch. 204, § 21 providing that Laws 2007, ch. 204, § 3 applies to taxable years beginning on or after January 1, 2008.
The 2009 amendment,
effective June 19, 2009, in Subsection A, at the end of the second sentence, added the provision concerning manufactured housing; in Subsection B, deleted former Paragraphs (1) and (2), which required the taxpayer to be owner of the building at the time the building was certified or the subsequent purchaser of a sustainable building with respect to which no tax credit had been claimed and adds the provision requiring the taxpayer to submit a document pursuant to Subsection I with the taxpayer's income tax return; in Subsection D, deleted the provision which required the tax credit to be calculated based on the certification level the building had achieved in the LEED rating system or the New Mexico rating system and in the chart, added the Build Green NM Silver, Gold and Emerald levels; in Subsection E, added the last sentence, together with Paragraphs (1) and (2); in Subsection F, added the last sentence; in Subsection I, permits the document to be submitted with the taxpayer's income tax return; added Paragraphs (11), (13) and (17) of Subsection N; in Subparagraph (b) of Paragraph (16) of Subsection N, added the build green New Mexico rating system; and in Subparagraph (c) of Paragraph (16) of Subsection N, deleted the requirement that manufactured housing be as defined by the United States department of housing and urban development.