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RPD-41298

State of New Mexico - Taxation and Revenue Department

Rev. 12/13/2011

RESEARCH AND DEVELOPMENT SMALL BUSINESS TAX CREDIT CLAIM FORM

INSTRUCTIONS

the development of a new or improved business component of

ABOUT THIS CREDIT: The Research and Development

the taxpayer, and in which substantially all activities constitute

Small Business Tax Credit is available for a qualified research

elements of a process of experimentation related to new or

and development small business for report periods beginning

improved function, performance, reliability or qualify, but not

on or after July 1, 2011 and before June 30, 2015, but for

related to style, taste, cosmetic or seasonal design factors.

no more than 35 consecutive calendar months after the first

month for which a claim for the credit is made by a taxpayer

"Qualified research expenditure" means an expenditure

or by a person to whom the taxpayer is a successor, pursu-

directly related to qualified research, but does not include

ant to Section 7-1-61 NMSA 1978. The time period between

any expenditure on research funded by any grant, contract

July 1, 2009 through June 30, 2011 is not included in the

or similar mechanism by another person or governmental

determination of consecutive calendar months, but claims

entity, and does not include any expenditure on property

made for report periods after July 2005 or prior to July 1,

that is owned by a municipality or county in connection with

2009 are included.

an industrial revenue bond project or expenditures for which

the taxpayer has received any credit pursuant to the Capital

The amount of the credit is equal to the sum of all gross

Equipment Tax Credit Act, the Investment Credit Act or the

receipts taxes and 50% of withholding taxes paid on behalf

Technology Jobs Tax Credit Act.

of employees and owners with no more than five percent

A taxpayer is not eligible for the credit with respect to a cal-

ownership, that are due to the state or payable by the qualify-

endar month:

ing small business for the calendar month in which the small

•

before June 30,2011, or after June 30, 2015,

business qualifies.

•

that is more than 35 consecutive calendar months after

the first month for which a claim for the credit is made by

CLAIMING THE RESEARCH AND DEVELOPMENT SMALL

the taxpayer or by the successor in business as defined

BUSINESS TAX CREDIT: The taxpayer may claim the credit

in Section 7-1-61 NMSA 1978, The time period between

within one year after the end of the report period. To claim the

July 1, 2009 through June 30, 2011 is not included in the

credit, attach Form RPD-41298, Research and Development

determination of consecutive calendar months, but claims

Small Business Tax Credit Claim Form, to the CRS-1 return.

made for report periods after July 2005 or prior to July 1,

Claiming the credit against a report period renders the tax-

2009 are included.

payer ineligible to claim the investment credit or technology

•

after which the qualified research and development small

jobs tax credit against the same report period.

business employs more than 25 employees on a full-time-

A report period is a calendar month, quarter or semiannual

equivalent basis,

period, according to the filing frequency listed on your Reg-

•

in a fiscal year of the qualified research and development

istration Certificate. If the taxpayer determines that it does

small business after the first fiscal year in which that

not qualify for a calendar month during the report period, the

business has total revenues in excess of $5 million,

taxpayer may not claim the credit for that calendar month, but

•

after the calendar month in which more than 50% of the

may qualify during other months within the reporting period.

qualified research and development small business vot-

ing securities or other equity interests having the right to

DEFINITIONS:

designate or elect the board of directors or other governing

"Qualified research and development small business" means a

body of that business are owned directly or indirectly by

business including a corporation, general partnership, limited

another business,

partnership, limited liability company, sole proprietorship or

•

if the business was not a qualified research and devel-

other similar entity, that:

opment small business in the 12-month calendar period

(1) employed no more than 25 employees on a full-time-

ending with that calendar month,

equivalent basis in any prior calendar month;

•

during which the taxpayer is the beneficiary of an industrial

(2) had total revenues of no more than $5 million in any prior

revenue bond issued by a municipality or county, or

fiscal year;

•

during which the taxpayer sold any goods of which the

(3) did not in any prior calendar month have more than 50%

taxpayer is not a manufacturer, unless the taxpayer has

of its voting securities or other equity interest with the

received an appropriate NTTC for such sale or sales.

right to designate or elect the board of directors or other

governing body of the qualified business owned directly

FORM INSTRUCTIONS: Complete all information requested

or indirectly by another business; and

in the address block. Complete Sections I and II. To qualify,

(4) has made qualified research expenditures for the period of

you must be able to answer yes to all questions in Section II.

12 calendar months ending with the month for which the

In Section III, indicate the report period of the CRS-1 return

credit is sought of at least 20% of its total expenditures

and the amount of credit to be applied to this CRS-1 return.

for those 12 calendar months.

First-time claimants must attach a description of the qualified

"Qualified research" means research that is undertaken for

research and development performed by the business. Sign

the purpose of discovering information that is technological in

and date the application.

nature and the application of which is intended to be useful in

Form Rpd-41298 - Research And Development Small Business Tax Credit Claim Form - State Of New Mexico Taxation And Revenue Department Page 2

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