1. A. Any amount of alternative energy product manufacturers tax credit claimed and approved may be applied by the claimant only against the modified combined tax liability owed by the claimant. The credit amount may not be transferred to any other person, including an affiliate.

2. B. Examples:

   (1) Corporation T sets up a manufacturing operation in New Mexico. T subsequently qualifies for $50,000 in alternative energy product manufacturer’s tax credit. After applying $13,000 to its own modified combined tax liabilities, T creates a subsidiary corporation, S, to own and operate all of T’s New Mexico business, including the manufacturing operation. T may not transfer the $37,000 remaining authorized alternative energy product manufacturer’s tax credit to S nor may S apply any of the remaining tax credit to S’s modified combined tax liability. T, to the extent T still has modified combined tax obligations, may apply the $37,000 balance against those obligations.

   (2) When two or more corporations merge, the resultant corporation is a continuation of any predecessor corporation. When a business organization changes its form, as for example from a sole proprietorship to a corporation or from a corporation to a limited liability company, so that the resultant entity is a successor in business to the predecessor, the resultant entity shall be deemed a continuation of the predecessor for alternative energy product manufacturers tax credit purposes. In both cases, since there is no transfer, the resultant entity may claim any amount of approved but unclaimed alternative energy product manufacturers tax credit held by a predecessor.

[3.13.7.14 NMAC - N, 12/31/08]