Deduct Your Biomass Purchases from Your Tax Bill
New Mexico has a policy that allows 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% of the value of the property or service. 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. Contact: Tax Information Office, New Mexico Taxation & Revenue Department, P.O. Box 630, Santa Fe, NM 87504; 505-827-0700; http://www.tax.state.nm.us/home.htm
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