New Mexico Register / Volume XXXV,
Issue 18 / September 24, 2024
TITLE 3 TAXATION
CHAPTER
4 CORPORATE INCOME TAXES
PART 23 CLEAN CAR CORPORATE INCOME TAX
CREDIT
3.4.23.1 ISSUING AGENCY: Energy, Minerals
and Natural Resources Department, Energy, Conservation and Management Division.
[3.4.23.1
NMAC - N, 09/24/2024]
3.4.23.2 SCOPE: 3.4.23 NMAC applies to
the application and certification procedures for administration of the clean car corporate income tax credit.
[3.4.23.2
NMAC - N, 09/24/2024]
3.4.23.3 STATUTORY AUTHORITY: 3.4.23
NMAC is established under the authority of Section 7-2A-19.01 NMSA 1978.
[3.4.23.3 NMAC - N, 09/24/2024]
3.4.23.4 DURATION: Permanent.
[3.4.23.4 NMAC - N, 09/24/2024]
3.4.23.5 EFFECTIVE DATE: September 24, 2024,
unless a later date is cited at the end of a section.
[3.4.23.5
NMAC - N, 09/24/2024]
3.4.23.6 OBJECTIVE: 3.4.23
NMAC's objective is to establish procedures for administering the certification
program for the clean car corporate income tax credit.
[3.4.23.6
NMAC - N, 09/24/2024]
3.4.23.7 DEFINITIONS: For additional definitions
refer to Section 7-2A-19.01 NMSA 1978.
A. "Applicant" means a New Mexico taxpayer
that has purchased an electric vehicle, plug-in hybrid electric vehicle or fuel
cell vehicle
or enters into a new lease of at
least three years for one of these vehicles.
B. "Application package" means the
application documents an applicant submits to the department for certification
to receive a state tax credit.
C. "Certified" or "certification"
means department approval of an applicant’s eligible purchase of an electric
vehicle, plug-in hybrid electric vehicle or fuel cell vehicle, or an
applicant’s new lease of at least three years for one of these vehicles, either
of which makes the applicant owning or leasing the vehicle eligible for a state
tax credit.
D. "Department" means the energy, minerals,
and natural resources department.
E. "Division" means the department's energy
conservation and management division.
F. “Extended warranty” means a
dealership-provided one-year extended warranty against defects and repairs on a
previously owned vehicle.
G. “Licensed dealer” means a dealer licensed by the
motor vehicle division of the taxation revenue department pursuant to Section
66-4-2 NMSA 1978 or a dealer located on tribal land within New Mexico.
H. “New
lease” means when a taxpayer enters into a new lease agreement of at least
three years for a clean car vehicle.
I. “State tax credit” or
“tax credit” means the clean car corporate income tax credit.
[3.4.23.7
NMAC - N, 09/24/2024]
A. The state tax credit may be claimed
for taxable years after January 1, 2024, and prior to January 1, 2030.
B. The tax credit provided by this section
may be referred to as the clean car corporate income tax credit.
C. One tax credit may be certified per
taxpayer, per taxable year; only one tax credit shall be certified per new
motor vehicle, and only one tax credit shall be certified per previously owned
motor vehicle.
D. A taxpayer who is not a dependent of
another individual and who, beginning on May 15,
2024, and prior to January 1, 2030, purchases an
electric vehicle, plug-in hybrid electric vehicle,
fuel cell vehicle or enters a new lease of at least three years for one of
these vehicles is eligible to apply for
certification for the tax credit against the taxpayer's tax liability imposed
pursuant to the Income Tax Act.
E. If a New Mexico taxpayer owns an
interest in a business entity that is taxed for federal income tax purposes as
a partnership or limited liability company and that business entity has met all
the requirements to be eligible for the credit, that taxpayer may be allocated
the right to claim the tax credit in proportion to the taxpayer's ownership
interest.
F. The total credit claimed by all
members of the partnership or limited liability company shall not exceed the
allowable credit the department has certified.
G. The state tax credit is available for the tax year in which the vehicle was
purchased or leased. The tax year of vehicle purchase date
determines tax year eligibility.
H. Married individuals filing separate
returns for a taxable year for which they could have filed a joint return may
each claim only one-half of the tax credit that would have been claimed on a
joint return.
I. A vehicle purchase or lease must be
through a motor vehicle dealer licensed by the New Mexico motor vehicle
division. A vehicle purchased through an unlicensed dealer is not eligible for
the clean car corporate income tax credit.
J. A lessee of a vehicle must have entered into a new lease for at least three years.
K. A previously owned motor vehicle must
have a minimum one-year extended warranty against defects and repairs.
L. The department shall report to the
taxation and revenue department the information required to verify, process,
and distribute each state tax credit.
M. In the event of a discrepancy between a requirement of
3.4.23 NMAC and an existing New Mexico taxation and revenue department rule
promulgated prior to the adoption of 3.4.23 NMAC's, the existing rule shall
govern.
[3.4.23.8 NMAC - N, 09/24/2024]
3.4.23.9 TAX CREDIT ADMINISTRATION:
A. A taxpayer may apply for certification
for a clean car corporate income tax credit from the energy, minerals, and
natural resources department on electronic forms and in the manner prescribed
by that department.
The department will not accept paper applications or
applications submitted by e-mail unless specifically authorized by the
division.
C. If the energy, minerals, and natural
resources department determines that the taxpayer meets the clean car tax
credit requirements, the department shall issue a certificate of eligibility to
the taxpayer providing the amount of tax credit and the taxable year in which
the credit may be claimed.
[3.4.23.9
NMAC – N, 09/24/2024]
3.4.23.10 APPLICATION REQUIREMENTS:
A. The state tax credit is available for
purchases of an electric vehicle, plug-in hybrid electric vehicle or fuel cell
vehicle, or new leases of at least three years for one of these vehicles.
B. Applications
for certification of the state tax credit shall be made no later than one year
from the date on which the vehicle is purchased or the lease is entered into.
C. The application package shall meet
the requirements of 3.4.23 NMAC. If an application package fails to meet a
requirement, the department shall disapprove the application.
[3.4.23.10 NMAC - N, 09/24/2024]
3.4.23.11 APPLICATION:
A. To
apply for a state tax credit, an applicant shall submit an
application for a certificate of eligibility to the division using a
department-developed application or an approved electronic application system.
B. To
be considered complete, an application must include the state tax credit
application and all required attachments.
C. If
there are multiple owners of the clean car, a joint application must be
submitted.
D. A completed application shall consist of the following
information:
(1) The applicant’s name, mailing
address, e-mail address, telephone number, vehicle identification number (VIN)
and the last four digits of the applicant’s social security number or employer
identification number (EIN) provided by a business applicant.
(2) A detailed description of the clean
car, including year, make and model.
(3) A statement the applicant signed and
dated, which signature may be a form of electronic signature if approved by the
department, agreeing that all information provided in the application package
is true and correct to the best of the applicant’s knowledge
(4) The vehicle's weight, battery
capacity, and VIN as listed on the vehicle's window sticker.
E. A statement the applicant signed and dated, which may be
a form of electronic signature if approved by the department, agreeing:
(1) applicant has read the certification
requirements contained in 3.4.23 NMAC;
(2) applicant understands that the
department must certify the clean car documents in the application package
before becoming eligible for a state tax credit.
[3.4.23.11
NMAC – N, 09/24/2024]
3.4.23.12 APPLICATION ATTACHMENTS:
A. An
application for new vehicle shall contain the following information as
attachments:
(1) Purchase
agreement, vehicle proof of purchase from or proof of new lease through a
dealer licensed by the motor vehicle division of the department pursuant to
Section 66-4-2 NMSA 1978 or a dealer located on tribal land within New Mexico;
(2) the
vehicle's registration in New Mexico;
(3) vehicle purchase sticker or vehicle
specification sheet;
(4) any
additional information the energy, minerals, and natural resources department
may require determining eligibility for the credit.
B. An
application for previously owned motor vehicle certification of eligibility
shall include:
(1) proof
of vehicle purchase from or lease through a dealer
licensed by the motor vehicle division of the department pursuant to Section
66-4-2 NMSA 1978 or a dealer located on tribal land within New Mexico;
(2) the
vehicle's registration in New Mexico;
(3) vehicle
purchase sticker or vehicle specification sheet;
(4) proof
that the dealer provided at least a one-year extended warranty against defects
and repairs for the previously owned vehicle;
(5) any
additional information the energy, minerals and natural resources department
may require in determining eligibility for the credit.
[3.4.23.12 NMAC-N, 09/24/2024]
3.4.23.13 APPLICATION REVIEW PROCESS:
A. The department shall consider complete applications in
the order received.
B. The department shall review the application package to
calculate the state tax credit; check the accuracy of the applicant's
documentation and determine whether the department shall certify the clean car
corporate income tax credit. The department shall disapprove an application
that is not complete, correct, or does not meet the approval criteria.
C. If the department finds the application package meets
the requirements of 3.4.22 NMAC, and a state tax credit is available, the
department shall certify the applicant's clean car corporate income tax credit.
D. If applicable, the department's
disapproval notification shall state the reasons why the department disapproved
the application. The applicant may resubmit the electronic application package
for a disapproved project, but it shall be placed back at the beginning of the
queue and reviewed as if it were a new application.
[3.4.23.13
NMAC - N, 09/24/2024]
3.4.23.14 WARRANTIES AND LEASES:
A. Clean car tax credit warranties that
the department may accept for previously owned motor vehicles shall be provided
by the dealer and shall cover a minimum of one-year extended warranty against
defects and repairs.
(1) Auto warranties accepted by the
department must cover both the failed part and the labor to replace or repair
it. The warranty types that the department may accept include the following:
(a) an auto warranty that
covers repairs for parts that fail due to defects or errors in how a vehicle
was built;
(b) a bumper-to-bumper
warranty, which may also be called a comprehensive or limited warranty, that
covers nearly all a vehicle's systems;
(c) a certified pre-owned
warranty that carries the balance of the original bumper-to-bumper and
powertrain warranties;
(d) an extended warranty that
covers a vehicle’s problems after the original new vehicle warranty expires and
which covers mechanical breakdowns and electrical failures;
(e) extended length warranty;
(f) factory warranty;
(g) new vehicle warranty;
(h) manufacturer warranty;
(i) any
other warranty deemed eligible by the department.
(2) The warranty types that
the department will not accept include the following:
(a) aftermarket accessories
warranty;
(b) a basic used warranty for
a car “as is,” or for a period less than a year;
(c) corrosion and perforation
warranties;
(d) emissions system warranty;
(e) hybrid and electric car battery
warranties. The department will not accept a warranty covering only the
high-voltage batteries installed in hybrids, plug-in hybrids and
battery-electric vehicles;
(f) implied warranty;
(g) powertrain warranty. The
department will not accept a warranty covering only the engine,
transmission, and drivetrain components, even if it includes coverage of
components in drive systems for electric vehicles and gas-electric hybrids;
(h) replacement parts warranty;
(i) restraint
system warranty. The department will not accept a warranty covering only a
vehicle's seat belts or restraint stem;
(j) roadside assistance warranty;
(k) tire warranty;
(l) any other warranty deemed ineligible
by the department.
B. The following new lease agreement types that the
department will accept include the following:
(1) closed-end lease where the applicant
agrees to lease the car from a licensed dealer for a set term and certain
mileage limits, and then return it at the end of the leasing period;
(2) open-end lease where the terms are
flexible, and the applicant takes the depreciation risk of the vehicle;
(3) single payment lease where the
applicant pays the entire amount for the lease upfront;
(4) long-term lease;
(5) used vehicle lease if it is longer
than three years;
(6) any other type of lease deemed
eligible by the department;
C. The lease agreement types that the department will not
accept include the following:
(1) sub-vented or subsidized lease. The
department will not accept a lease type that is offered with special incentives
to make it more enticing to consumers. These incentives can include lower base
interest rates, higher residual values, and manufacturer discounts.
(2) A lease shorter than three years.
[3.4.23.14
NMAC - N, 09/24/2024]
3.4.23.15 CALCULATING THE STATE TAX CREDIT:
A. The amount of the tax credit shall be:
(1) for taxable years beginning January
1, 2024, and prior to January 1, 2027:
(a) $3,000 for a new electric vehicle.
(b) $2,500 for a new plug-in hybrid
electric vehicle or fuel cell vehicle.
(c) $2,500 for a previously owned
electric vehicle.
(d) $2,000 for a previously owned plug-in
hybrid electric vehicle or fuel cell vehicle.
(2) for a taxable year beginning January
1, 2027, and prior to January 1, 2028:
(a) $2,220 for a new electric vehicle.
(b) $1,850 for a new plug-in hybrid
electric vehicle or fuel cell vehicle.
(c) $1,850 for a previously owned
electric vehicle.
(d) $1,480 for a previously owned plug-in
hybrid electric vehicle or fuel cell vehicle.
(3) for a taxable year beginning on
January 1, 2028, and prior to January 1, 2029:
(a) $1,470 for a new electric vehicle.
(b) $1,225 for a new plug-in hybrid
electric vehicle or fuel cell vehicle.
(c) $1,225 for a previously owned
electric vehicle.
(d) $980 for a previously owned plug-in
hybrid electric vehicle or fuel cell vehicle.
(4) for the taxable year beginning
January 1, 2029:
(a) $960 for a new electric vehicle.
(b) $800 for a new plug-in hybrid
electric vehicle or fuel cell vehicle.
(c) $800 for a previously owned electric
vehicle.
(d) $640 for a previously owned plug-in
hybrid electric vehicle or fuel cell vehicle.
B. A state tax credit to an applicant for
a clean car the department has certified shall not exceed:
(1) $3000 for a new clean car.
(2) $2500 for a previously
owned clean car.
[3.4.23.15 NMAC - N, 09/24/2024]
3.4.23.16 CERTIFICATION:
A. The energy, minerals and natural
resources department shall provide the applicant with the certificates of
eligibility in an electronic format.
B. The department shall provide
certification through electronic notification to the applicant. The
notification shall include the applicant's contact information, the last four
digits of the social security number, or EIN, the clean car tax credit certification
number and the tax credit amount.
C. If, after the department has issued a certification, any
of the requirements are found to be insufficient, the department may rescind
the certification.
[3.4.23.16
NMAC - N, 09/24/2024]
3.4.23.17 CLAIMING THE STATE TAX CREDIT:
A. A taxpayer who has received a certificate of eligibility
from the energy minerals and natural resources department shall claim the
credit with the taxation and revenue department as required in statute and
outlined the income tax form instructions.
B. A certificate of eligibility for the tax credit may be
sold, exchanged or otherwise transferred to another taxpayer for the full value
of the credit. The parties to such a transaction shall notify the taxation and
revenue department of the sale, exchange or transfer within 10 days of the
sale, exchange or transfer in an electronic format prescribed by the taxation
and revenue department.
[3.4.23.17
NMAC - N, 09/24/2024]
HISTORY
OF 3.4.23 NMAC:
Pre-NMAC
History: None.
History
of Repealed Material: [RESERVED