SPI Economic Impact Study Finds New Mexico’s Film Incentive Programme Delivers Strong Economic Benefits

A new evaluation of the New Mexico Film Production Tax Credit, released by the New Mexico Film Office (NMFO) with the New Mexico Economic Development Department and undertaken by SPI, has found that the incentive has delivered economic output of $1.39 billion over a two year period.

In addition, the credit has delivered an economic return on investment (RoI) of 8.4, showing that for every $1 invested through the incentive program the state’s economy benefitted by $8.40.

The state of New Mexico currently offers a 25-35% refundable tax credit on eligible spend in the state with an annual budget cap set at $110 million. 

The evaluation covered standard economic impact measures, including Gross Value Added (GVA) and economic RoI, the effects of the incentivised activity on the film and television production supply chain, the geographic impact of in-state production spending, and the effects on tourism in the state during the fiscal years 2020 through 2021.

The tax credit was found to have significantly contributed to New Mexico being regarded as a notably film-friendly state. Evidence from a survey of production companies and confidential consultations undertaken as part of the evaluation showed that for 92% of productions taking place in the state, the incentive was the most important factor identified by decision-makers when choosing where to produce the film and television projects and only 8% of total productions would have taken place in New Mexico without the tax credit.

New Mexico Economic Development Cabinet Secretary Alicia J. Keyes said: “This study dives into the numbers and proves what we have been saying all along about the industry and why we continue to push this forward as a key to New Mexico’s future.” 

Amber Dodson, director of the New Mexico Film Office, added: “the findings of this study prove the success and importance of the film incentive and the immense economic benefit this surging industry has on New Mexico. The film industry injects hundreds of millions of outside dollars into New Mexico’s economy every year, supports thousands of jobs, creates revenue streams for local businesses, and generates opportunity and prosperity, while improving the overall quality of life for New Mexicans.”

The full report here.

Find out more on SPI’s Economic Impact, Research and Evaluation work here.