New Mexico increases film incentive tax credits, drawing of more productions to the state

LAS CRUCES, New Mexico (KVIA) -- The New Mexico Film Office is celebrating expanded film incentive legislation set to further amplify the state’s booming film and television industry. The recently signed law promises to stimulate further growth and employment throughout the next decade, with estimates projecting the creation of thousands of jobs.

The updated legislation, House Bill 547, was signed into law on April 7th, and takes effect July 1st, and includes provisions that progressively increase the annual cap on industry tax credits from $110 million to $160 million over the next five fiscal years. Film Office Director Amber Dodson explained that this increase will prevent a backlog of rebates, thereby fostering the continued growth of film and television productions in the state.

Moreover, House Bill 547 introduces adjustments that exempt resident principal performers from a $5 million credit cap per production. The aim is to incentivize the casting of local talent for leading roles. The above-the-line credit cap for New Mexico Film Partners, including Netflix, NBCUniversal, and 828 Productions, has also been increased from $5 million to $15 million per production. The legislation further introduces a maximum total credit cap of $40 million per fiscal year.

Rural areas, too, will greatly benefit from the new legislation. House Bill 547 increases the rural uplift incentive from 5% to 10% and redefines the zoning to at least 60 miles from the city hall of each county. This will prove a major boon for rural communities statewide, including Doña Ana County, McKinley County, and the Mescalero Apache Reservation.

The legislation also ushers in more restrictive terms for the Nonresident Crew Exception Program (NRCE). However, New Mexico Film Partners will see added benefits. NRCE offers productions the ability to hire nonresident below-the-line crew at a reduced credit, with restrictions differing depending on the production company's partnership with the state.

Existing provisions regarding New Mexico’s film partners are maintained under the bill, exempting studios from the cap that have signed a 10-year agreement with the state. This agreement stipulates sustained production spend, job creation, and a commitment to soundstage infrastructure investments.

Last fiscal year, New Mexico set a new record in production spend for the second consecutive year, hitting $855.4 million, a 36% increase over the previous fiscal year. The state was also named one of the "Best Places to Live and Work as a Moviemaker" by MovieMaker Magazine in 2023.

Further exciting developments include the establishment of the New Mexico Media Academy (NMMA). The academy, a collaborative project led by the Economic Development Department and the Higher Education Department, promises to extend the industry’s growth via advanced training and workforce expansion.

The film industry currently provides approximately 8,000 jobs throughout the state, with the median wage of a film worker being roughly $32 per hour. This is significantly higher than the average wage for other industries in New Mexico, which stands at $18 per hour.