NM Gov Proposes Tax Credits, Research Initiatives for Startup Growth

Funding to universities to compete for endowed chairs and startup funds for a commercialization initiative are among New Mexico Gov. Susana Martinez’s proposals for tech-based economic growth in the coming year. The governor also wants lawmakers to expand the state’s angel investment tax credit and reform the Technology Jobs Tax Credit and R&D Small Business Tax Credit to better support startup companies. The announcements were rolled out over the past two weeks and detailed in the FY15 budget presented to lawmakers.

The executive budget increases New Mexico Institute of Mining and Technology’s budget by $2 million for the Technology Research Collaborative (TRC). Created under HB 562 during last year’s legislative session, but not funded, TRC is charged with establishing advanced technology centers to aid in the development and commercialization of intellectual property. Members include national laboratories, research institutions and postsecondary institutions. Another $7.5 million would be used to attract top professors, researchers and scientists to New Mexico under the Higher Education Endowment fund. The funds would be targeted toward science, engineering, mathematics and health, and would require the university or college to provide a 50 percent match.

Tax credit proposals to encourage innovation activities also are part of the governor’s agenda. Specifically, she wants to raise the maximum individual investment threshold for the state’s angel investor tax credit from $100,000 to $250,000, and increase the overall cap on the credit from $750,000 to $2 million. In another proposal, the state would combine the Technology Jobs Tax Credit with the current R&D Small Business Tax Credit in an effort to increase the percent of new investment for which credit can be claimed. The credit also would be made refundable to assist companies engaging in early R&D activities. In its current form, the R&D tax credit is “virtually unusable” by the small firms it was meant to help, according to a press release.

The budget also includes $2.5 million for a STEM initiative that would encourage partnerships between students and teachers with additional funding for recruiting and training teachers. Higher education funding is slated for an increase, but with additional funds geared toward performance-based measures, including awarding more degrees in STEM fields.