Governor Susana Martinez today announced the latest in a series of proposals designed to attract and develop new research, innovation and high-tech firms in New Mexico. Specifically, the Governor is proposing to improve the tax treatment of innovation activities by expanding the use of the Angel Investment Credit, allowing for greater private investment in small New Mexico start-ups, and reforming the Technology Jobs Tax Credit and the current, relatively unused Research and Development Small Business Tax Credit to better support New Mexico companies that are creating jobs through their research and development activities.
The announcement was held at Vibrant Corporation in Albuquerque, where Governor Martinez proposed to expand the Angel Investment Credit by raising the maximum individual investment threshold from $100,000 to $250,000, and increasing the overall cap on the credit from $750,000 to $2 million. Angel investors are individuals and investment funds who invest in start-up companies, helping them get off the ground. Governor Martinez's proposal to expand the Angel Investment Credit will encourage investors to make larger investments in these new small businesses, and also to increase the number of investments they can make.
"Turning an innovative, well-developed idea into a commercial enterprise can be very costly for an entrepreneur - particularly as they are just getting their small business off the ground," said Governor Martinez. "Angel investors come alongside these innovators and can provide the funds necessary to help make their dreams and ideas a reality. And when these small business owners succeed, our economy succeeds. There's no question that our economy benefits when innovators are able to thrive."
Governor Martinez also proposed to combine the Technology Jobs Tax Credit with the current Research and Development Small Business Tax Credit, an incentive that was written in such a way that rendered it virtually unusable by the small firms engaged in research and development activities that it was designed to help. The Governor's approach would combine the credits, increase the percent of new investment for which credit can be claimed, enhance the benefits related to the creation of new technology-related jobs and infrastructure investment in New Mexico, and make the credit refundable in order to assist companies engaging in early R&D activities (which typically have limited tax liability against which to draw the credit).
Governor Martinez also recently announced several other reforms and proposals aimed at encouraging greater innovation and supporting and expanding New Mexico's high-tech workforce and industry base. These include allocating $2 million to the Technology Research Collaborative in order to fund enterprising projects with commercial potential that are the result of partnerships between researchers at New Mexico's laboratories and universities, and the private sector. Secondly, reforming the Higher Education Endowment Fund and investing $7.5 million in it will also help attract more top researchers and professors to state institutions in order to train up and recruit students who are able to serve as a stronger high-tech workforce in New Mexico or become innovators and entrepreneurs themselves. Governor Martinez has also proposed to make funding for the Job Training Incentive Program (JTIP) permanent to provide further certainty to small business job creators and innovators. Previously, JTIP has been funded haphazardly and inconsistently in each legislative session.
"This session, we must take decisive steps to expand the pipeline of innovation in New Mexico, and then improve our tax treatment of those innovation activities once they occur," concluded Governor Martinez. "New Mexico has tremendous potential to become an even stronger leader in high-tech research and development, but we must improve the way in which we support innovators who want to bring their ideas and products to the marketplace and reward the creation of technology-related jobs in our state."