The proposed bill establishes two new tax credits in New Mexico: the Hotel Renovation Income Tax Credit and the Hotel Renovation Corporate Income Tax Credit. These credits are available to taxpayers who incur qualifying costs for hotel renovation projects between the effective date of the bill and January 1, 2035. The credits are set at 30% of qualifying costs for hotels achieving LEED-NC silver certification and 20% for other qualifying renovations. Taxpayers must apply for pre-certification from the tourism department before starting renovations and must submit a certification application within one year of project completion. The total amount of credits that can be certified in a calendar year is capped at $30 million.

Additionally, the bill outlines the definition of qualifying costs, which include expenses related to planning, designing, and construction, with minimum thresholds based on county population. It also specifies that any approved credit exceeding a taxpayer's income tax liability can be carried forward for up to five years. The credits will be included in the tax expenditure budget, ensuring transparency regarding their fiscal impact. The provisions of this act will apply to taxable years beginning on or after January 1, 2025.