1. A. A taxpayer that files a New Mexico corporate income tax return for a taxable year beginning on or after January 1, 2024 and that purchases and installs after May 15, 2024 but before December 31, 2034 a geothermal ground-coupled heat pump in a property owned by the taxpayer may claim against the taxpayer's corporate income tax liability, and the department may allow, a tax credit of up to thirty percent of the purchase and installation costs of the system. The credit provided in this section may be referred to as the "geothermal ground-coupled heat pump corporate income tax credit". The total geothermal ground-coupled heat pump corporate income tax credit allowed to a taxpayer shall not exceed nine thousand dollars ($9,000). The department shall allow a geothermal ground-coupled heat pump corporate income tax credit only for geothermal ground-coupled heat pumps that are certified pursuant to Subsection C of this section and installed by a nationally accredited ground source heat pump installer.
2. B. That portion of a geothermal ground-coupled heat pump corporate income tax credit that exceeds a taxpayer's tax liability in the taxable year in which the credit is claimed shall be refunded to the taxpayer.
3. C. The energy, minerals and natural resources department shall adopt rules establishing procedures to provide certification of geothermal ground-coupled heat pumps for purposes of obtaining a geothermal ground-coupled heat pump corporate income tax credit. The rules shall address technical specifications and requirements relating to safety, building code and standards compliance, minimum system sizes, system applications and lists of eligible components. The energy, minerals and natural resources department may modify the specifications and requirements as necessary to maintain a high level of system quality and performance.
4. D. The maximum annual aggregate of credits that may be certified in a calendar year by the energy, minerals and natural resources department is four million dollars ($4,000,000). That department shall not certify a tax credit for which a taxpayer claims a 2021 sustainable building corporate income tax credit using a geothermal ground-coupled heat pump as a component of qualification for the rating system certification level used in determining eligibility for that credit. Completed applications for the credit shall be considered in the order received. The energy, minerals and natural resources department shall provide the department appropriate information for all certificates of eligibility in a secure manner on regular intervals agreed upon by both departments.
5. E. A taxpayer allowed a tax credit pursuant to this section shall claim the credit on forms and in a manner required by the department.
6. F. The tax credit provided by this section shall be included in the tax expenditure budget pursuant to Section 7-1-84 NMSA 1978, including the annual aggregate cost of the tax credit.
7. G. As used in this section, "geothermal ground-coupled heat pump" means a heating and refrigerating system that directly or indirectly utilizes available heat below the surface of the earth for distribution of heating and cooling or domestic hot water and that has either a minimum coefficient of performance of three and four-tenths or an efficiency ratio of sixteen or greater.

History: Laws 2009, ch. 271, § 2; 2024, ch. 67, § 26; 2025, ch. 130, § 55.

ANNOTATIONS

The 2025 amendment, effective January 1, 2026, revised reporting requirements; in Subsection D, after "in the order received", added "The energy, minerals and natural resources department shall provide the department appropriate information for all certificates of eligibility in a secure manner on regular intervals agreed upon by both departments."; and in Subsection F, after the subsection designation, deleted "The department shall compile an annual report on the tax credit provided by this section that shall include the number of taxpayers approved by the department to receive the credit, the aggregate amount of credits approved and any other information necessary to evaluate the credit. The department shall present the annual report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the" and added "The tax credit provided by this section shall be included in the tax expenditure budget pursuant to Section 7-1-84 NMSA 1978, including the annual aggregate".

The 2024 amendment, effective May 15, 2024, reinstated the geothermal ground-coupled heat pump corporate income tax credit, increased the maximum amount of the credit from two million dollars to four million dollars, required the taxation and revenue department to compile an annual report on the geothermal ground-coupled heat pump corporate income tax credit, and revised the definition of "geothermal ground-coupled heat pump"; in the section heading, added "corporate income"; in Subsection A, after "January 1,", changed "2010" to "2024", after "installs after", deleted "January 1, 2010" and added "the effective date of this section", after "December 31,", changed "2020" to "2034", added "corporate income" preceding each occurrence of "tax credit", and after "only for geothermal ground-coupled heat pumps", added "that are installed by a nationally accredited ground source heat pump installer"; in Subsection B, added "corporate income" preceding "tax credit", after "tax credit that", deleted "remains unused in a" and added "exceeds a taxpayer's tax liability in the", and after "taxable year", deleted "may be carried forward for a maximum of ten consecutive taxable years following the taxable year in which the credit originates until the credit is fully expended" and added "in which the credit is claimed shall be refunded to the taxpayer"; in Subsection C, deleted "Prior to July 1, 2010", and added "corporate income" preceding "tax credit"; in Subsection D, after "maximum annual aggregate of", deleted "two million dollars ($2,000,000) in geothermal ground-coupled heat pump tax", after "credits", added "that may be certified in a calendar year by the energy, minerals and natural resources department is four million dollars ($4,000,000). That department shall not certify a tax credit for which a taxpayer claims a 2021 sustainable building tax credit using a geothermal ground-coupled heat pump as a component of qualification for the rating system certification level used in determining eligibility for that credit"; added new Subsections E and F and redesignated former Subsection E as Subsection G; and in Subsection G, deleted "reversible refrigerator device that provides space heating, space cooling, domestic hot water, processed hot water, processed chilled water or any other application where hot air, cool air, hot water or chilled water is required and that utilizes ground water or water circulating through pipes buried in the ground as a condenser in the cooling mode and an evaporator in the heating mode" and added the remainder of the subsection.

Applicability. — Laws 2024, ch. 67, § 42 provided that the provisions of Laws 2024, ch. 67, §§ 7, 9 and 23 through 31 apply to taxable years beginning on or after January 1, 2024.