Severance Tax 

New Mexico imposes a severance tax on the privilege of severing natural resources. "Natural resources" is defined as "timber and any metalliferous or nonmetalliferous mineral product, combination or compound thereof but does not include oil, natural gas, liquid hydrocarbon, individually or any combination thereof or carbon dioxide".

 

The severance tax applies at the following rates to the taxable value of the following natural resources: 

  • copper, 1/2%;
  • timber, 1/8%;
  • pumice, gypsum, sand, gravel, clay, fluorspar and other nonmetallic minerals, 1/8%;
  • lead, zinc, thorium, molybdenum, manganese, rare earth and other metals, 1/8%,
  • and gold and silver, 1/5%.

The severance tax on coal is $.57 per short ton for surface coal and $.55 per short ton for underground coal. There is a surtax also imposed on coal which is increased on July 1 of each calendar year for the previous calendar year. We compute the new rate in April and publish it on or before May 1 of each year.  

The severance tax on severed and saved uranium-bearing material is three and one-half percent of the taxable value of each pound of severed and saved U3O8 contained in the uranium-bearing material.

The severance tax is paid on or before the twenty-fifth (25th) day of the month following the month in which the taxable event occurs.

 

Contact Information

New Mexico Taxation and Revenue Department
P.O. Box 2308
Santa Fe, NM 87504-2308

For assistance, call (505) 827-0808

Links

Manage your account online
Who Must Register?
Energy, Minerals and Natural Resources Department
Forms and Publications
Statutory Reference: Look for Chapter 7, Article 26 NMSA 1978 in the New Mexico State Statutes.

Frequently Asked Questions

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Q. What is the purpose of the severance tax?

Answer:
For the privilege of severing natural resources in New Mexico, the severer is subject to an excise tax on the taxable value of the quantity of natural resources severed and saved by or for him as determined under, and at the rates provided by the Severance Tax Act.

Q. In general, on what natural resources is the severance tax imposed?

Answer:
Timber and any timber product, and any metalliferous or non-metalliferous mineral product, combination or compound severed in New Mexico except for oil, natural gas, liquid hydrocarbons or carbon dioxide, are subject to the severance tax.

Q. If I file for the severance tax, do I have to file for the resource excise tax?

Answer:
If you file for the severance tax, you must file for the resource excise tax.

Q. What is the definition of “severing”?

Answer:
“Severing” means: mining, quarrying, extracting, felling or producing any natural resource in New Mexico for sale, profit or commercial use.

Q. What are the severance tax rates?

Answer:
Severance tax rates are:
- potash is 2 1/2% of taxable value;

- copper is 1/2% of taxable value;

- timber is 1/8% of taxable value;

- pumice, gypsum, sand, gravel, clay, fluorspar and other nonmetallic minerals are 1/8% of taxable value;

- lead, zinc, thorium, molybdenum, manganese, rare earth and other metals are 1/8% of taxable value;

- gold and silver are 1/5% of taxable value;
- coals tax rate, based upon the quantity severed and saved, varies according to surface or subsurface severing, the surtax in place, and coal surtax exemptions. See Sections 7-26-6 and 26-6.2 NMSA 1978  for further information, and

- uranium is 3 1/2% of taxable value.
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