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State of New Mexico - Taxation and Revenue Department

RPD-41330

Rev. 2/2/2012

APPLICATION FOR ALTERNATIVE ENERGY PRODUCT

MANUFACTURERS TAX CREDIT INSTRUCTIONS

(Page 3 of 3)

Expenditures made on manufacturing equipment that is owned by a municipality or county in connection with an industrial

revenue bond project is not "qualified equipment" for purpose of the Alternative Energy Product Manufacturers Tax Credit

Act.

ITEMS NOT QUALIFIED AS “MANUFACTURING EQUIPMENT”: Tangible personal property which is not a machine, mecha-

nism or tool, or a component or fitting thereof, is not “manufacturing equipment” for the purpose of the Alternative Energy

Product Manufacturers Tax Credit Act. Accordingly such items as furniture, shelving and supplies are not “manufacturing

equipment”. Equipment that is neither essential to nor used in conjunction with the manufacturing plant will not qualify for the

alternative energy product manufacturers tax credit, even if that equipment is physically located in the plant. Non-qualifying

equipment may include, but is not limited to: coffee makers, kitchen equipment used in an employee cafeteria and televisions

or radios used in an employee lounge or in a reception area.

ITEMS WHICH MAY BE INCLUDED AS “MANUFACTURING EQUIPMENT”: The term “manufacturing operation” is defined

as a plant where personnel perform production tasks “in conjunction with equipment not previously existing at the site” to

produce alternative energy products. “Manufacturing equipment” must be exclusively and directly employed in the manufac-

turing process and must be physically located in the plant and used in conjunction with the production of alternative energy

products. Therefore, equipment used in conjunction with the production of alternative energy products may include, but is

not limited to, such items as manufacturing process equipment, lights, boilers, air conditioners, smoke detectors and other

equipment essential to maintaining the proper climate for the manufacturing process, packaging equipment used to put the

manufactured product in marketable form, warehousing equipment and computers used to control the manufacturing process

or to inventory and schedule the shipping of manufactured products.

"Manufacturing operation" means a plant employing personnel to perform production tasks, in conjunction with manufac-

turing equipment not previously existing at the site, to produce alternative energy products.

"Modified combined tax liability" means the total liability for the reporting period for the gross receipts tax imposed by

Section 7-9-4 NMSA 1978 together with any tax collected at the same time and in the same manner as that gross receipts

tax, such as the compensating tax, the withholding tax, the interstate telecommunications gross receipts tax, the surcharge

imposed by Section 63-9D-5 NMSA 1978 and the surcharge imposed by Section 63-9F-11 NMSA 1978, minus the amount

of any credit other than the alternative energy product manufacturers tax credit applied against any or all of those taxes or

surcharges; provided that "modified combined tax liability" excludes all amounts collected with respect to local option gross

receipts taxes;

"Pass-through entity" means a business association other than: a sole proprietorship; an estate or trust; a corporation,

limited liability company, partnership or other entity that is not a sole proprietorship taxed as a corporation for federal income

tax purposes for the tax year.

"Qualified expenditure" means an expenditure for the purchase of manufacturing equipment made after July 1, 2006 by a

taxpayer approved by the Department.

"Renewable energy" means energy from solar heat, solar light, wind, geothermal energy, landfill gas or biomass either

singly or in combination that produces low or zero emissions and has substantial long-term production potential;

"Renewable energy system" means a system using only renewable energy to produce hydrogen or to generate electricity,

including related cogeneration systems that create mechanical energy or that produce heat or steam for space or water heat-

ing and agricultural or small industrial processes and includes a: photovoltaic energy system; solar-thermal energy system;

biomass energy system; wind energy system; hydrogen production system; or battery cell energy system.

"Taxpayer" means a person, including a shareholder, member, partner or other owner of a pass-through entity, who is li-

able for payment of a tax or to whom an assessment has been made, if the assessment remains unabated or the amount

thereof has not been paid.

Form Rpd-41330 - Application For Alternative Energy Product Manufacturers Tax Credit Page 4

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