Biomass Equipment & Materials Compensating Tax Deduction (New Mexico)

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Last modified on February 12, 2015.

Financial Incentive Program

Place New Mexico

Name Biomass Equipment & Materials Compensating Tax Deduction
Incentive Type Sales Tax Incentive
Applicable Sector Commercial, Industrial
Eligible Technologies Landfill Gas, Biomass, Municipal Solid Waste, CHP/Cogeneration, Hydrogen, Anaerobic Digestion, Ethanol, Methanol, Biodiesel, Microturbines
Active Incentive Yes
Implementing Sector State/Territory
Energy Category Renewable Energy Incentive Programs
Amount 100% of value may be deducted for purposes of calculating Compensating Tax due

Start Date 2005-06-17

Program Administrator New Mexico Taxation & Revenue Department

References DSIREDatabase of State Incentives for Renewables and Efficiency[1]


In 2005, New Mexico adopted a policy to allow businesses to deduct the value of biomass equipment and biomass materials used for the processing of biopower, biofuels, or biobased products in determining the amount of Compensating Tax due.

New Mexico's Compensating Tax is an excise, or "use" tax, which is typically levied on the purchaser of the product or service for using tangible property in the state. The tax applies to imports of factory and office equipment, and other items. The rate is 5.125% on certain property used in New Mexico and 5% on certain services used in New Mexico. Compensating Tax is designed to protect New Mexico businesses from unfair competition from out-of-state business not subject to a sales or gross receipts tax. This biomass Compensating Tax deduction is analogous to a sales tax exemption for renewable energy equipment available in some other states.

Deductions from compensating tax do not have to be reported to the New Mexico Taxation and Revenue Department but records substantiating the deduction should be kept in the taxpayer's records.

Incentive Contact

Contact Name Information Specialist
Department New Mexico Taxation & Revenue Department
Address 1100 South St. Francis Drive
Place Santa Fe, New Mexico
Zip/Postal Code 87504
Phone (505) 827-0700


Authorities (Please contact the if there are any file problems.)

Authority 1: NM Stat. § 7-9-98
Date Effective 2005-06-17
Date Enacted 2005-04-05

  • Incentive and policy data are reviewed and approved by the N.C. Solar Center's DSIRE project staff.[1]


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