Why are movies being made in New Mexico?
Movies are being made in New Mexico in large part due a series of financial incentives designed to lure out of state productions. In addition, many productions choose New Mexico over other states offering similar incentives because of the large variety of landscapes within the state of New Mexico that can double for locations throughout the world. New Mexico also has a large (and growing) and highly skilled film workforce and the physical and technical infrastructure (such as Albuquerque Studios) necessary to film major motion pictures.
What is an incentive?
An incentive is something that encourages enterprising by acting as a reward for increased productivity. The New Mexico Film Incentive program, run by the New Mexico Film Office, offers a series of tax rebates, loans, exemptions, and reimbursements in an attempt to increase productivity within the state.
New Mexico Film Incentive 25% Tax Rebate
For the full amount of all production expenditures, the state of New Mexico offers an uncapped 25% refund. Should a production meet all the standard qualification and requirements laid forth by the State of New Mexico -- including script/treatment approval, location acknowledgment, and entering into a contract with the New Mexico Film Office -- they can be greenlit to begin production within the state
Once a project has reached this stage both the "Film Production Company Registration" as well as the "Production Tax Credit Agreement" forms need to be completed and returned to the New Mexico Film Office before production can begin.
During production a detailed record of all expenditures needs to be accounted for along with legally binding evidence that all crew member claiming New Mexico residency are in fact residents of the state (copies should be made of each employees "Declaration of Residency" form). Once all New Mexico expenditures are complete, a comprehensive ledger detailing all expenses needs to be compiled as well as a notice explaining the need to file creditor claims against the film production company published in local newspapers of all locations where filming has taken place. There is also a list of ten pieces of information, an application for a film production tax credit form, and a compilation documents that need to be sent to the New Mexico Film Office at this point. All this information can be found at the link below.
After an approximate 60-day audit process the production company will return the forms at which point income taxes and Film Production Tax Credit Claim forms need to be filed. Credit will be applied to any tax liability with excess refunded by check.
A series of guidelines dictates the final outcome of the New Mexico Film Production Tax Rebate. These can be found at the end of 25% Film Production Tax Rebate link and should be photocopied and distributed to all department heads.
New Mexico Film Investment Loan Program
For projects with a minimum budget of at least $2 million the state of New Mexico offers a backend participation loan of up to $15 million per project. This loan has 0% percent interest and is able to embody 100% of the project. Consideration for the loan must be preceded by a guarantor being in place, script meeting state eligibility standards, distribution contract, and agreement that at least 85% of the photography will be shot within the State of New Mexico. This loan can be applied for simultaneously with the 25% Tax Rebate.
A series of steps must be completed in order for loan approval to take place. A complete and in-depth description of these steps can be found on the Film Investment Loan Program link below however a general overview is listed below.
- Both the "Film Production Company Registration" and "Production Tax Credit Agreement" forms must be completed early in the application process (all forms can be found at nmfilm.com under "incentives").
- Script must be submitted to the New Mexico Film Office for consideration of eligibility requirements and viability of project for New Mexico.
- Preliminary production schedule and budget must also be submitted.
- Signed distribution agreement must be in place (independent films with no upfront distribution commitments will still be considered and are advised to read step seven of the Film Investment Loan program in detail).
- A State of New Mexico Film Advisor will write a recommendation to be presented at two mandatory attendance meetings in Santa Fe. After distribution approval the film advisor will need 16 pieces of information that can be found under step eight of the link below. For questions please see filmadvisor@state.nm.us
- After submitting a list of requirements to New Mexico Film Office Director Lisa Strout, the film advisor will schedule a hearing with the state where he/she will represent and describe your project to in the presence of Strout, State Investment Council Greg Kulka, and the producer and/or director of said project. Council members will approve/dissaprove the loan in your presence. If approved you will attend a similar process at the SIC hearing two weeks thereafter. Plan on 5 to 8 weeks of negotiation and preparation of the final loan documents should the project meet approval at the second SIC hearing. Funds are typically available two to three days after the loan closing. Negotiation and preparation by the SIC will require a series of diligence materials that can also be viewed under step nine of the link below.
New Mexico Film Incentives - No State Sales Tax
Although the plan is non eligible in combination with the 25% tax rebate, by filling out the "Film Production Company Registration", "Application for Business Tax Identification Number", and "Application for Nontaxable Transaction Certificates" your production may become eligible for exemption from all sales tax within the state of New Mexico. A certificate will be issued to your organization to be presented at the point of sale in order to employ your exemption. Please see the attached PDF for qualifications and all forms can be found at nmfilm.com
New Mexico Film Incentives - FCAP - Film Crew Advancement Program
Training for advanced below the line crew members will be reimbursed 50% of all hourly wages if the hired is a New Mexico resident. Supervisors and Keys in the mentor position may hire at will for this program. To take advantage of this program, merely fill out the "FCAP Application Part One" which you can find on the state of New Mexico Film Office website, nmfilm.com
