Frequently Asked Questions 

Search our collection of frequently asked questions using the search box below or select a subject below to see all FAQs related your selection.

Cigarette Tax

Q. How are cigarette stamps delivered?

You can pick up cigarette stamps or they may be shipped using UPS, Fed-Ex or the United States Postal Service. Effective July 1, 2010, the Department no longer provides UPS ground shipping free of charge. When completing Form RPD-41158, Purchase Order for New Mexico Cigarette Stamps, you will indicate the method of delivery. If requesting delivery by courier or mail, provide the Department with a shipper number or payment for the postage.

Q. When is payment due for stamp purchases?

If you have pre-approval (requires a surety bond) from the Department, you may pay by the 25th of the month following the month in which the cigarette stamp purchase was made. If you do not have pre-approval, the payment is due upon receipt of the stamps.

Q. What is the deadline for ordering stamps?

Orders received after 2:00 p.m. are processed the next business day.

Q. Why are negative numbers not allowed on the Cigarette Distributor’s Monthly Inventory Report or its schedules?

To correctly complete Form RPD-41315, Cigarette Distributor’s Monthly Inventory Report, do not report negative amounts either on the form or on its schedules. A common reason for reporting negative numbers is entering incorrectly the number of cigarette packs returned. To avoid the problem, report returned packs on Schedule B. If the cigarette packs are destroyed or returned to the manufacturer, report them on Schedule C under the distributed code “L”.

Q. How do I change my registration information?

Use Form ACD-31075, Business Tax Registration Update  to make changes. Click instructions for Form ACD-31075 to see instructions for completing the form to the following address:  Special Tax Programs & Services, PO Box 25123, Santa Fe, NM 87504-05123


Compensating Tax

Q. What is the purpose of compensating tax?

Compensating tax helps to eliminate unfair competition from out-of-state businesses. It levels the playing field when New Mexico buyers buy property, services, or some combination of property and services from out-of-state sellers who otherwise have no gross receipts tax obligations to New Mexico.

Q. Does New Mexico have a use tax in addition to compensating tax?

No, New Mexico’s compensating tax is our form of “use tax,” a term used in most other states.

Q. What is an agent for the collection of compensating tax?

Under certain circumstances, persons selling property or a combination of property and service to someone engaged in business in New Mexico may be required to collect compensating tax. The seller must not owe gross receipts tax on the sales, and the buyer must use the property, or property and service, in New Mexico (Section 7-9-10 NMSA 1978 Link . Here are some examples of common business activities that incur agency for out-of-state businesses:- Regularly soliciting orders in New Mexico;
- Advertising in New Mexico media or soliciting orders through programs broadcast by New Mexico radio, television, or cable television systems, or
- Maintaining a stock of goods in this state.

Q. How is the compensating tax reported?

Report compensating tax on Line 2 of the CRS-1 Form. Multiply the value of the taxable property or service by the appropriate compensating tax rate. 

Q. What must I do if I owe compensating tax for a transaction which occurred during a prior reporting period?

Amend the CRS-1 Form for that period. Send the amended CRS-1 Form to the Department with the additional tax due. Amended CRS-1 Forms should be sent to the same address as monthly CRS-1 Forms.

Q. Is a government agency subject to compensating tax?

The use of property by a government agency is exempt from compensating tax (Section 7-9-14(A) NMSA 1978) with two exceptions:
a. The use of property by a New Mexico political subdivision that is or will be incorporated into a project created under the Metropolitan Redevelopment Code is not exempt, and
b. The use of tangible personal property that becomes an ingredient part of a construction project is not exempt.
Property used on Indian reservations or pueblo grants by their governing bodies, agencies, or subdivisions is also exempt (Section 7-9-14(B) NMSA 1978
The use of property by any branch of the U.S. Armed Forces engaged in resale activities is exempt (Section 7-9-31 NMSA 1978


Conservation Tax - Coal - Uranium - Geothermal Energy

Q. Where can an explanation of this tax be located?

You can find it in Section 7-30 NMSA 1978.

Q. What is the rate for the Conservation tax on coal, uranium and geothermal energy?

The rate of tax is nineteen-hundredths percent (.19%) of the taxable value of sold products.

Q. How is taxable value derived on coal, uranium and geothermal energy?

Q. Which form do I use to file under this tax program for coal, uranium and geothermal energy?

Use Form RPD–41120, Coal/Uranium Conservation Tax Report.

Q. What is the tax-due date?

The tax is due on the 25th day of the month following the month of production unless otherwise authorized by the Department.


Corporate Income and Franchise Tax

Q. Are insurance companies required to file a New Mexico Corporate Income Tax (CIT) return?

No, as an insurance company or reciprocal or underinsurance exchange that already pays a premium tax to New Mexico, you are exempt.

Q. Are 501(c) Homeowners Associations required to file a New Mexico CIT return?

No, as a501(c) Homeowners Association, you are not required to file a New Mexico CIT return unless you have unrelated business income at the federal level. In that case you are required to file a CIT return and pay Corporate Income and Franchise tax.

Q. How does New Mexico treat S Corporations and Qualified Subchapter S Subsidiaries (QSSSs) that file a New Mexico CIT return?

New Mexico follows federal practice. If QSSSs are reported in the parent’s CIT return, New Mexico accepts a return on the same basis. The return is the “election.” No separate election is necessary. Note: Each corporation included on the parent’s return, having exercised its corporate franchise in New Mexico, is subject to the franchise tax.

Q. When is an entity responsible for filing and paying franchise tax?

If the entity, a C or S Corporation, exercises its franchise in New Mexico during the tax year, it is responsible for filing and paying franchise tax. The entity must be registered with the Taxation and Revenue Department or with the Public Regulatory Commission and have New Mexico property, payroll or sales for the tax year.

Q. If a corporation was a C corporation in the previous year and elects federal S status, does it automatically become a New Mexico S corporation for tax in the current year?

Yes, provided the IRS granted the election. Please provide a copy of the approved election when filing the S corporation return.

Q. Which New Mexico form do Limited Liability Corporations (LLCs) use to report their income tax liability?

It depends on the federal tax treatment. If the LLC is taxed as:- either an S corporation or as a partnership, the LLC must submitForm PTE, Income and Information Return for Pass-Through Entities ;
- a C corporation, it must submit a form CIT-1, Corporate Income and Franchise Tax Return, or
- a Sole Proprietor, it must submit a Form PIT-1, New Mexico Personal Income Tax Return . Other schedules may also be required.

Q. In filing Form PTE, Income and Information Return for Pass-Through Entities for New Mexico is it possible to alternate between composite and non-composite returns? For example, if a company filed a composite return for one year, can it file a non-co

For example, if a company filed a composite return for one year, can it file a non-composite return for the next year with no explanation?


You may not alternate. If you are a pass-through entity for federal purposes and file a form 1065 or 1120S, you must file Form PTE, Income and Information Return for Pass-Through Entities for New Mexico.

Q. Is there a composite return for nonresidents where S corporations can file and pay the corporate tax without filing an individual return?

Yes, S corporations can file a Form PTE, Income and Information Return for Pass-Through Entities for New Mexico and pay the tax on behalf of nonresident shareholders provided that this is the only income they have from a New Mexico source.

Q. Can members of an S corporation incur a New Mexico personal income tax liability even if they are not residents of New Mexico?

Yes, even though a member of the S corporation is a nonresident of New Mexico, the member may incur a personal income tax liability. The process is made easier, however, because when the S corporation files its required Form PTE, Income and Information Return for Pass-Through Entities, it must withhold on behalf of the nonresident member. This withholding requirement is acceptable in lieu of the member’s requirement to file an individual income tax. If a member is required to file an individual return because the member has other income from a New Mexico source and does not wish to have the S corporation withhold on his or her behalf, then completing New Mexico’s Form PTE-TA, New Mexico Non-Resident Owner Income Tax Agreement releases the S corporation from the requirement. The PTE-TA is an agreement that the nonresident member will file an individual return and include distributions from the S corporation in the return.


Delinquent Property Tax

Q. Where are delinquent property tax auctions held?

Delinquent property tax auctions are held at the county seat (courthouse) or at a place the Taxation and Revenue Department (TRD) designates in the county where the property is located. The Property Tax Division (PTD) strongly urges all potential bidders to inspect the property ahead of time and check the paper history on the chain of title before the auction. Because trespassing is not allowed, site inspections must be from a distance. All property is sold “as is” and is not guaranteed.

Q. When does the Property Tax Division hold delinquent property tax auctions?

There is no set schedule for public auctions. They occur in each county as title research is completed, all other collection efforts are exhausted and as PTD moves forward in placing property back on the tax rolls. PTD does not hold sales in all 33 counties each year.

Q. Where can I find copies of sale lists?

Upon completion of all preliminary statutory requirements to properly offer delinquent property for sale, a list of eligible properties is available at PTD in the Wendell Chino Bldg, 1220 St. Francis Dr., 2nd Floor, Rm. 207, Santa Fe, NM 87505.

Q. Is there a mailing list to notify prospective buyers about upcoming sales?

PTD does not mail sale lists.

Q. What determines the minimum bid on real property?

The minimum bid is based on the total of taxes, penalty, interest and costs due. The owner’s interest in the real property is also taken into consideration.

Q. How can a buyer bid on property offered at tax sales?

Individuals who wish to bid on property register on the day of the sale two hours before the start of the auction. Registration closes promptly at the start of the sale. Bidding is on an oral basis with the property going to the highest bidder. Bidders must be physically present or represented by an agent. The agent must present a notarized authorization document to PTD upon registration.

Q. Does the Property Tax Division provide buyers with title information (deeds, mortgage, liens, etc.) prior to a tax sale?

PTD does not furnish title information, maps or suggestions about the locations of properties being sold. The responsibility to inspect the property and review the chain of title belongs to the buyer prior to the sale. Buyers should know exactly what they are buying before the sale. The property is awarded to the highest bidder “as is.” There are no refunds, and all sales are final.

Q. If a buyer purchases a property through a tax sale, are all other existing liens against that property extinguished at that time?

A sale properly made under Section 7-38-67 NMSA 1978 Link to: http://www.conwaygreene.com/nmsu/lpext.dll?f=templates&fn=main-h.htm&2.0 constitutes full payment of all delinquent taxes, penalties and interest considered as a lien against the property. The sale extinguishes only the tax lien. No other liens are extinguished. The responsibility to inspect the property and review the chain of title belongs to the buyer prior to the sale.

Q. Does New Mexico have a right of redemption for former owners?

offer a two-year limitation for the former owner to challenge the sale under Section 7-38-70 NMSA 1978 Link to: http://www.conwaygreene.com/nmsu/lpext.dll?f=templates&fn=main-h.htm&2.0. The only redemption period in New Mexico is a 120-day federal IRS redemption. The IRS has 120 days after the auction to buy the property from the successful bidder up to the amount purchased.

Q. What types of payment are acceptable at public auction sales?

All payments at public auctions must be in the form of a cashier's check, money order, personal check or company check. A letter of guarantee from the issuing bank must accompany personal and company checks at the time of registration. Letters of guarantee must state that the bank will guarantee payment up to a specific amount. Personal or company checks are unacceptable otherwise. There is reasonable time after the conclusion of the sale for parties to acquire a cashier's check or money order for the amount of their purchases.

Q. What happens if a buyer does not pay for a piece of property?

All payments at public auctions must be in the form of a cashier's check, money order, personal check or company check. A letter of guarantee from the issuing bank must accompany personal and company checks at the time of registration. Letters of guarantee must state that the bank will guarantee payment up to a specific amount. Personal or company checks are unacceptable otherwise. There is reasonable time after the conclusion of the sale for parties to acquire a cashier's check or money order for the amount of their purchases.

Q. Is property bought at a delinquent tax sale assessed and taxed on the amount of purchase?

Any bidder who does not pay once the auction closes may not participate in any future property tax sales. In addition, the bidder is responsible for all costs, expenses, and attorney fees expended in the collection of uncollected bids.

Q. What type of deed does the Property Tax Division issue for property sold at tax sales?

The purchase price of a property acquired at auction does not dictate its value. The county assessor has already determined a taxable value based on the appraisal analysis of similar properties in the area. Before buying at auction the prospective bidder should assess the value by consulting the county assessor’s office and talking to realtors and owners of property bordering the piece to be sold.

Q. What is a perfected interest?

The state issues a tax deed equivalent to a quitclaim deed. The deed conveys all of the former owner's interest in the real property as of the date the state's lien for real property taxes arose. This deed is subject only to perfected interests in the real property that existed before the date of the property tax lien. New Mexico warrants no title to property you buy at public auction. It is sold “as is.” The deed issued by PTD can be used as the basis to begin clearing the title through the court.

Q. Which sections of the Taxation and Revenue Department Selected Laws and Regulations contain the property tax statutes?

Interest in real property is "perfected" when the deed or lien is recorded with the County Clerk's Office in the county where the property is located.


Estate Tax

Q. Does New Mexico have an estate tax?

Yes. The estate tax applies to the New Mexico portion of the net estate as a proportionate share of the federal credit for state estate taxes. The net estate located in New Mexico of a nonresident is also taxable as a fraction of the federal credit.

Q. Does New Mexico have an inheritance tax on heirs?

No, but an inheritance may be reflected in a taxpayer's modified gross income as defined by New Mexico. If so, New Mexico personal income tax laws would then apply.


Fiduciary

Q. If I have an automatic extension of time to file with the IRS, do I need to file an extension with New Mexico?

No, New Mexico honors your federal automatic extension of time to file. You do not need to request a separate state extension if you already have a federal automatic extension. If you need more time than that granted at the federal level, you must file a New Mexico extension using Form RPD-41096, Extension of Time to File .

Q. When is my Fiduciary return due?

For fiduciaries that file on a calendar-year basis, the New Mexico Income Tax Return form FID-1 is due on or before April 15 with the payment of taxes due.

Q. Do you accept electronic fund transfers for fiduciary returns?

No. Please enclose your check or money order with Form FID-PV, with your return.

Q. If I am a grantor trust, do I need to file a fiduciary return?

Generally, grantor trusts are not required to file Form FID-1, New MexicoFiduciary Income Tax Return . However, if a grantor trust has become irrevocable upon the grantor's death, it must file Form FID-1. If you are a grantor trust not required to file Form FID-1, but you have had tax withheld from oil and gas proceeds and you wish to distribute the tax withheld to the beneficiaries of the trust, you must file a completed Schedule FID-WD, Withholding Tax Distributions for Simple and Grantor Trusts . Form FID-1 is not required to be submitted with the Schedule.


Fill Print and Go Forms

Q. How should I enter information into the form?

Using your computer keyboard type the information directly onto the screen.

Q. Should I include dashes, dollar signs, commas or texts with the data entered?

You can include dashes, dollar signs and commas in your entries.

Q. Can I make changes after all the information has been entered on the form?

Yes, you can still go in and make changes after entering the information.

Q. What do I do if I’ve entered the wrong information?

If you make an error, simply go back, delete the incorrect information and replace it with the correct information.

Q. Should I save a copy of my completed form before sending or taking it to you?

You cannot save a copy of the completed form on your computer, but you can print it for your records.

Q. What do I do with the completed form at the TRD Office?

When you get to the window or counter with your form, please let the employee know that you have already completed a Fill, Print and Go Form. He or she will give you further instructions if any are needed.


Form Development

Q. Can I create an electronic substitute form or worksheet on my computer and submit it to the Department instead of obtaining the Department’s form?

Persons who want to reproduce, develop, distribute or use New Mexico tax forms must receive approval to generate any substitute New Mexico state tax form. A substitute form must meet the requirements of the New Mexico Taxation and Revenue Department (TRD). The Department must approve it prior to release or distribution. The Department reserves the right to reject substitute forms with poor legibility or forms that do not meet its requirements. For more information on getting approval to generate a substitute New Mexico state tax form, see General Specifications and Approval Procedures for the Reproduction of New Mexico State Tax Forms .

Q. I am a software developer. I want my software product to reproduce a Taxation and Revenue Department form for filing. How do I begin?

If you want to reproduce, develop, distribute and or use New Mexico tax forms, you must first receive approval to generate any substitute New Mexico state tax form. A substitute form must meet the requirements of the New Mexico Taxation and Revenue Department (TRD). The Department must approve it prior to release or distribution. The Department reserves the right to reject substitute forms with poor legibility or forms that do not meet its requirements. For more information on getting approved to generate a substitute New Mexico state tax form, see General Specifications and Approval Procedures for the Reproduction of New Mexico State Tax Forms .


Gaming Tax

Q. How often do gaming tax returns need to be filed?

File returns monthly even if the tax due is zero. Gaming tax returns are due on or before the 15th of the month following the close of the calendar month.

Q. Who is required to file and pay?

Manufacturer or distributor licensees who sell, lease or transfer gaming devices in the state must remit a gaming manufacturer and distributor tax of ten percent (10%) on their gross receipts from the transaction.

What is the gaming tax rate?

*The gaming tax imposed on manufacturers and distributors is at a rate of 10%.
• The gaming tax imposed on gaming operators is 10%.• The gaming tax imposed on non-profit fraternal organization is 10%.• The gaming tax imposed on a racetrack gaming operator 26%.


Q. What form is used when paying the gaming tax on manufacturers and distributors?

Gaming device manufacturers and distributors should report gaming tax on Form RPD-41210, Manufacturer/Distributor Gaming Tax Return Gaming operators should report the tax on Form RPD-41209, Operator Gaming Tax Returan Tax Return

Q. If I overpaid gaming tax, how do I obtain a refund?

Complete a corrected gaming tax form, either Form RPD-41210, Manufacturer/Distributor Gaming Tax Return or Form RPD-41209, Operator Gaming Tax Return (whichever is applicable) and Form RPD-41071, Application for Tax Refund and send them to the address on the gaming tax form.

Q. Why are negative numbers not allowed on the gaming tax returns?

To properly complete gaming tax returns, do not enter negative amounts. To report negative amounts arising from prior-period adjustments, amend the return in which the error occurred. If a refund is due, also file Form RPD-41071, Application for Tax Refund

Q. How do I change my registration information?

Use Form ACD-31075, Business Tax Registration Update to make changes. Click instructions for Form ACD-31075 to see instructions for completing the form. Submit the form to the following address:
Special Tax Programs & Services
PO Box 25123
Santa Fe, NM 87504-5123


Governmental Gross Receipts Tax

Q. If a business sells a service or leases property to a federal, New Mexico or tribal government agency, are the gross receipts from that sale or lease subject to New Mexico governmental gross receipts tax?

No. Governmental gross receipts tax does not apply to receipts from sales or leases to government agencies. Rather, the tax applies to the gross receipts of an agency, institution, instrumentality or political subdivision of the State of New Mexico from transactions specified by state law.

Q. What transactions are subject to New Mexico governmental gross receipts tax?

Governmental gross receipts tax applies only to: - the sale of tangible personal property other than water from facilities open to the general public; - the performance of, or admissions to, recreational, athletic or entertainment services or events in facilities open to the general public; - refuse collection or refuse disposal, or both; - sewage services; - the sale of water by a utility owned or operated by a county, municipality or other political subdivision of the state, and - the renting of parking, docking or tie-down spaces or the granting of permission to park vehicles, tie aircraft down, or dock boats.

Q. If the gross receipts of an agency, institution, instrumentality or political subdivision of the State of New Mexico are not subject to governmental gross receipts tax, are they subject to regular gross receipts tax?

Generally, they are not. Such gross receipts are exempt from regular gross receipts tax under Section 7-9-13 NMSA 1978 except for: - receipts from the sale of gas or electricity by a utility owned or operated by a county, municipality, or other political subdivision of a state, or - receipts from the operation of a cable television system owned or operated by a municipality.


Gross Receipts Tax

Q. What is New Mexico's sales tax rate?

New Mexico does not have a sales tax. It has a gross receipts tax instead. This tax is imposed on persons engaged in business in New Mexico. In almost every case, the person engaged in business passes the tax to the consumer either separately stated or as part of the selling price. Only in its effect on the buyer does the gross receipts tax resemble a sales tax. The gross receipts tax rate varies throughout the state from 5.125% to 8.8675% depending on the location of the business.
View the current Gross Receipts Tax Rate Schedule.

Q. What is taxable?

Generally speaking, sales and leases of goods and other property, both tangible and intangible, are taxable. Unlike many other states, sales and performances of most services are taxable in New Mexico.

Q. What are gross receipts tax rates and how are they determined?

The gross receipts tax rate varies throughout the state from 5.125% to 8.8675%. The total rate is a combination of rates imposed by: State of New Mexico; State of New Mexico;
- New Mexico counties, and
New Mexico municipalities.View the current Gross Receipts Tax Rate Schedule. The total gross receipts tax is paid to the state, which keeps its portion and distributes the counties' and municipalities' portions to them.

Because the combined gross receipts tax rate can change in January and July of every year, we issue a new tax rate schedule semiannually and include it in the CRS-1 Filer’s Kit . Always check the front cover of the current Filer’s Kit and the Gross Receipts Tax Rate Schedule (link in the preceding paragraph) to see if the rate for your business location(s) has changed.

Q. What is an exemption?

Exemptions from gross receipts are receipts that are not taxable and do not have to be reported. If all your receipts are exempt, you do not have to register with the Taxation and Revenue Department (TRD) for gross receipts tax purposes. However, you may have to register for withholding tax or to obtain nontaxable transaction certificates.You do not have to report nontaxable receipts on the CRS-1 Form. If you have a combination of exempt, deductible and taxable receipts, you should register and report only the deductible and taxable receipts on the CRS-1 Form.

Q. What is a deduction?

A deduction from gross receipts, like an exemption, is an amount not subject to tax. Unlike an exemption, however, you must report on Form CRS-1 both the gross receipts (in Column D) and the amount of deductions you are eligible to claim against those gross receipts (in Column E). Please note that they are gross, not net, receipts.

Q. How do I get nontaxable transaction certificates (NTTCs) and Nontaxable Transaction Certificates for Out of State buyers (NTTC-OSBs)?

To obtain NTTCs, you must have a New Mexico CRS identification number, which is an 11-digit number also known as a business tax identification number. Obtain that number by submitting a completed Form ACD-31015, Application for Business Tax Identification Number . Click ACD-31015, Instructions  to review instructions for completing the form. You may also register online by using Taxpayer Access Point . A taxpayer who has a CRS identification number is registered with TRD.

Q. Do I need to register my business?

Persons engaging in business in New Mexico must register with TRD. With few exceptions, a business must hold a Combined Reporting System (CRS) identification number, also known as a state tax identification number. CRS is TRD’s method for reporting the state’s major business taxes: gross receipts tax, all local option gross receipts taxes, compensating tax, and withholding tax. For more information, click FYI-102: Information for New Businesses .

Q. What type of ownership am I (Corporation, LLC, Individual, Partnership, etc.)?

Ownership can take one of several forms:
- corporation/S-corporation with established officers (president, vice-pres, treasurer etc.); requirements include Federal Employer Identification Number (FEIN) and a Public Regulation Commission (PRC) number for New Mexico corporations;
- limited liability corporation (LLC) with managing member/members; requirements include FEIN and PRC number for New Mexico corporations;
- single-member LLC having only one member; applications can be processed by using the Social Security Number, but when paying wages to employees, a FEIN and a PRC number for New Mexico corporations will be required;
- individual (sole proprietorship); sole ownership requires a Social Security Number or Individual Taxpayer Identification Number (ITIN). If you pay wages to employees, a FEIN is required. A husband and wife may be considered a sole proprietorship;
- nonprofit organizations must have a FEIN. Nonprofits organized under 501(c)(3) must submit a copy of the IRS Letter of determination. For more information see FYI-103: Information for Nonprofit Organizations ; - a partnership must have at least two members, and a FEIN is required. For information, see FYI-102: Information for New Businesses ;
- an Indian tribe must have a letter from the tribe stating that permission has been granted to register as an Indian tribe. A FEIN is required;
- an estate/trust requires a FEIN. For information see FYI-102: Information for New Businesses , or
- a government entity requires a FEIN.

Q. Do I need a FEIN to register my business?

A Federal Employer Identification Number (FEIN) is required for all ownership types, excluding individual and single-member LLCs unless they pay wages

Q. Do I need a Public Regulations Commission (PRC) number?

If you have any problems logging in or otherwise using New Mexico Webfile, please contact us by sending an e-mail to: TRD-NMWebFile@state.nm.us , or call the CRS Helpdesk. Click the Contact Us button for current phone numbers. When you call, select Option 1.

Q. How often do I need to file returns for my gross receipts taxes?

Filing statuses for gross receipts tax and their due dates are:
- monthly - the 25th of the following month if combined taxes average more than $200 per month, or if you wish to file monthly regardless of the amount due;
- quarterly – the 25th of the month following the end of the quarter if combined taxes for the quarter are less than $600 or an average of less than $200 per month in the quarter. Quarters are January-March; April-June; July-September; October–December;
- semiannually - the 25th of the month following the end of the 6-month period if combined taxes are less than $1,200 for the semiannual period or an average less than $200 per month for the 6-month period. Semiannual periods are January-June; July–December;
- seasonal - businesses doing business only during a specific time of year, e.g., firewood vendors or Christmas tree sales. You must indicate month(s) for which you will be filing, and
- temporary – usually set up for one-time filing. A start date and an end date are required. There is a maximum of six months.

Q. What is a DBA and do I need one?

DBA (doing business as) is the name of the business. If this is a sole proprietorship, you may use your personal name if you do not have a DBA.

Do I list business contact information if I work at home?

List the phone number you will use for business purposes, even if it is a home phone.

Q. I’m still looking for office space. What do I put as my location address?

List a home address until you have a business location. If you are receiving mail at home under your business name, or you would like mail to be directed to a particular individual, enter that name in the attention line.

Q. What type of accounting method is right for the business I am registering?

If you will pay taxes based on when you receive payment; choose cash. If you will pay taxes based on when you bill clients; choose accrual.


Gross Receipts-Compensating-Witholding Tax E-filing

Q. Who can use the Combined Report System (CRS)?

Eligible taxpayers include:

  • Any person or business who files a CRS-1 Form to report any of the following taxes: 
  • gross receipts tax; 
  • compensating tax;- withholding tax; 
  • governmental gross receipts tax; 
  • leased vehicle gross receipts tax, or 
  • leased vehicle surcharge; 
  • Anyone who can be reached by phone and e-mail;- Anyone who is a monthly, quarterly, or semi-annual filer, and
  • Anyone who is filing any tax amount including zero.

    • A taxpayer who is not eligible is any person or business who is:
  • a 13-month filer;
  • reporting early for a period which has not yet closed; or
  • claiming a business tax credit (such as the investment tax credit, capital equipment tax credit, technology jobs tax credit, rural jobs tax credit).

    • Q. How are payments made?

    Using New Mexico Webfile, you can pay by the following different methods:
    - Credit Card (Visa, MasterCard, Discover or American Express). NOTE: Payments by credit card are subject to a 2.49% convenience fee imposed by the Official Payments Corporation. While this is not TRD’s fee, it is circulated through TRD;
    - Electronic check. You authorize TRD to debit your checking account in the amount you specify, or
    - automatic clearing house deposit and federal wire transfer. Such payment methods are only for taxpayers who make special arrangements with the bank to have funds transferred electronically to TRD on a specified date. NOTE: You must initiate this payment with your financial institution. See Publication FYI-401: Special Payment Methods

    Q. When is the service available?

    Except for limited periods of unexpected downtime, this service is available at all times. Please note, however, that credit card authorization depends upon the availability of the Official Payments Corporation site and is beyond our control.

    Q. What are the filing and payment deadlines?

    There are two deadline requirements to consider:
    -For all CRS taxpayers the deadline for filing the CRS-1 Form online, including remitting any tax due via electronic check or credit card payment, must be completed by the 25th day of the month immediately following the report period for which you are filing. If the 25th falls on a weekend or holiday, the transaction must be completed on the first business day after the 25th.
    - For special payment method taxpayers paying via automated clearinghouse deposit or fedwire transfer, the deadline for filing the CRS-1 Form is the same as for other taxpayers (see above). Note: the payment-due date may be earlier than the CRS-1 Form due date. Please consult Publication FYI-401: Special Payment Methods to ensure you meet the deadline.

    Q. What if I'm filing late?

    For most late filers, the system automatically calculates the penalty and interest from the original due date of the return to the date of filing. For taxpayers filing late via automated clearinghouse deposit or federal wire transfer, New Mexico Webfile calculates interest according to the payment date you enter on the data entry screen. If that date differs from the actual date of the electronic funds transfer, you will be billed or credited accordingly.

    Q. What if I need to change my e-mail address or phone number?

    To make changes, on New Mexico Webfile , enter your current username and password on the log-in screen. On the next page you will see an option, Update Personal Information. Click on this link and update your information as necessary.

    Q. What if I forgot my password?

    Click on the Forgotten Password Help button. Enter your username. Answer the secret questions that you created when you first registered. The answers must exactly match the answers you created. If they match, you can view the password on the screen or have it e-mailed to the e-mail address on file. NOTE: If you have a spam blocker on your e-mail, you may need to adjust your e-mail settings to accept the e-mail.

    Q. What if I still have problems?

    If you have any problems logging in or otherwise using New Mexico Webfile, please contact us by sending an e-mail to: TRD-NMWebFile@state.nm.us , or call the CRS Helpdesk. Click the Contact Us button for current phone numbers. When you call, select Option 1.


    Hearing Office

    Q. Who decides a taxpayer’s protest?

    If a protest cannot be resolved informally, the case is assigned to a hearing officer for formal hearing. The hearing officer listens to the facts and legal arguments presented by the taxpayer and the Department’s attorney and decides whether the assessment, denial of refund, or other action taken by the Department is supported by New Mexico law. The hearing officer is required to apply the state’s tax laws as written by the New Mexico Legislature and does not have the authority to change those laws or excuse taxpayers from their legal liability for taxes (including penalty and interest) owed to the state. The fact that a taxpayer is unable to pay an assessment or believes the law supporting the Department’s action is unfair does not provide a basis for granting the taxpayer’s protest.

    Q. How are hearings scheduled?

    Upon receiving a written request for hearing from the Department’s attorney or the taxpayer, the hearing officer schedules a formal hearing on the taxpayer’s protest.  All hearings are held in the Department’s offices in Santa Fe, New Mexico, and all parties and witness are required to appear in person.  In limited cases where the facts are not in dispute and credibility is not an issue, a taxpayer may ask to present his legal arguments by telephone.  A taxpayer who wishes to appear telephonically must submit a written request to the hearing officer well in advance of the hearing and must state whether the Department’s attorney agrees to or opposes the request.  A copy of any letter, fax or other document sent to the hearing officer also must be sent to the Department’s attorney.

    Q. What happens if a taxpayer does not attend the administrative hearing?

    If a taxpayer fails to attend the administrative hearing, either in person or through a legal representative, a decision is entered against the taxpayer and in favor of the Department.  Section 7-1-16 NMSA 1978 provides that a taxpayer who has protested the assessment of tax but fails to appear for the formal hearing becomes a “delinquent taxpayer.” At that point, the Department may proceed with collection action to collect the assessed tax.  

    Q. Is the taxpayer required to be represented by an attorney?

    Taxpayers are not required to have an attorney, although they may want to consider hiring an attorney or accountant to assist them with the protest.  Pursuant to Section 7-1-24 NMSA 1978, taxpayers may represent themselves at the administrative hearing or may be represented by a bona fide employee, an attorney, or a certified or registered public accountant.  A spouse, relative or other person holding a taxpayer’s power of attorney may act for the taxpayer in preliminary proceedings with the Department’s protest office, but may not represent the taxpayer at the formal hearing, unless that person is an employee of the taxpayer, an attorney, or a certified or registered public accountant.  Any attorney representing the taxpayer, including attorneys employed as in-house counsel, must be authorized to practice law in New Mexico or associate with local counsel.

    Q. What are a taxpayer’s responsibilities at the administrative hearing?

    A taxpayer challenging the Department’s assessment, refund denial, or other action has the burden of proving that the action taken by the Department does not comply with New Mexico law.  It is the taxpayer’s responsibility to gather all documents or other evidence supporting the protest, including nontaxable transaction certificates, tax returns, invoices, bank statements, etc.  The taxpayer may need to call witnesses to testify concerning those documents or other facts of the case.  The taxpayer may also testify on his or her own behalf. The Department’s attorney may call witnesses, including the taxpayer, to establish the Department’s case.  Anyone giving factual testimony at the hearing is required to be present in person, to testify under oath or affirmation, and to answer questions from both the taxpayer and the Department’s attorney.
     
    In addition to presenting the facts, the taxpayer is responsible for researching relevant statutes, regulations and case law and providing the hearing officer with the legal authority supporting the taxpayer’s protest.  Most of this material, including copies of the hearing officer’s decisions in similar cases, can be found on the Department’s web site (www.tax.state.nm.us).  Taxpayers must understand that the hearing officer is required to enforce the law as written by the Legislature and cannot grant a protest based on arguments that the state’s tax laws are unfair or create an undue hardship.  The taxpayer should discuss the statutes and regulations applicable to the protest with the Department’s protest auditor or attorney.  The hearing officer cannot discuss the case with either party prior to the formal hearing.  

    Q. How long after the hearing is the protest decided?

     The hearing officer’s written Decision and Order is issued within 30 days after the date of the administrative hearing or the date the last document or legal brief pertaining to the protest is filed.  A copy of the decision is mailed to the taxpayer by certified mail, return receipt requested.  


    Liquor Excise Tax

    Q. How often must liquor excise tax returns be filed?

    File returns monthly even if no tax is due. Liquor excise tax is due on or before the 25th of the month following the close of the calendar month.

    Q. What form is used when paying liquor excise tax?

    Q. Who is required to file and pay?

    Wholesalers who sell alcoholic beverages must file and pay liquor excise tax on alcoholic beverages sold.

    Q. If I overpaid, how do I obtain a refund?

    Complete a corrected Form RPD-41129, Liquor Excise Tax Return and Form RPD-41071, Application for Tax Refund and send them to:
    Taxation and Revenue Department
    P.O. Box 25123
    Santa Fe, NM 87504-5123
    If alcoholic beverages on which the liquor excise was paid in a prior period were destroyed in shipment, spoiled, or otherwise so damaged as to be unfit for sale or consumption, file Form RPD-41071, Application for Tax Refund . Include proof that the liquor excise tax was paid on the product, and proof of destruction, spoilage, or damage.


    Q. Why are negative numbers not allowed on the return?

    To correctly complete Form RPD-41129, Liquor Excise Tax Return , do not report negative amounts on either the form or on its schedules. A common reason for reporting negative numbers is entering incorrectly the number of alcoholic beverages on which the liquor excise tax was paid in a prior period. If beverages on which a liquor excise tax was paid in a prior period were destroyed in shipment, spoiled, or otherwise so damaged as to be unfit for sale or consumption, file Form RPD-41071, Application for Tax Refund  Include proof that the liquor excise tax was paid on the product, and proof of destruction, spoilage, or damage.

    Q. How do I change my registration information?

    Use Form ACD-31075, Business Tax Registration Update to make changes. Click instructions for Form ACD-31075 to see instructions for completing the form. Submit it to the following address:


    Local Liquor Excise Tax

    Q.How often do Local Liquor Excise Tax (LLQ) returns need to be filed?

    File returns monthly even if no tax is due. The LLQ return is due on or before the 25th of the month following close of the calendar month.

    Q. Who is required to file and pay?

    Retailers located in McKinley County who sell or possess alcoholic beverages for sale within McKinley County, and upon which the local liquor excise tax has not already been paid, must file and pay the local liquor excise tax.

    Q. What is the local liquor excise tax rate?

    The local liquor excise tax rate is 5% of the price that the retailer paid for the alcoholic beverages.

    Q. What form do I use when paying local liquor excise tax?

    Q. Why are negative numbers not allowed on the return?

    To correctly complete the return, do not report negative amounts on the form. A common reason for reporting negative numbers is entering incorrectly the number of alcoholic beverages on which the liquor excise tax was paid in a prior period. If beverages on which the liquor excise tax was paid in a prior period were destroyed in shipment, spoiled, or otherwise so damaged as to be unfit for sale or consumption, file Form RPD-41071, Application for Tax Refund. Include proof that the liquor excise tax was paid on the product, and proof of destruction, spoilage, or damage.

    Q.How do I change my registration information?

    Use Form ACD-31075, Business Tax Registration Update to make changes. Click instructions for Form ACD-31075 to see instructions for completing the form. Submit the form to the following address:
    Special Tax Programs & Services
    PO Box 25123
    Santa Fe, NM 87504-5123

    Q. If I overpay, how do I obtain a refund?

    Complete a corrected Form RPD-41277, Local Liquor Excise Tax Return and Form RPD-41071, Application for Tax Refund . If alcoholic beverages for which the local liquor excise tax was paid in a prior period were destroyed in shipment, spoiled, or otherwise so damaged as to be unfit for sale or consumption, file Form RPD-41071, Application for Tax Refund . Include proof that the local liquor excise tax was paid on the product and proof of destruction, spoilage or damage.


    Managed Audit

    Q. What is a Managed Audit?

    A managed audit is a variation on the traditional field audit. It’s an opportunity to come forward voluntarily and declare unreported or underreported income and pay back taxes owed without incurring penalty. In addition, interest is not assessed as long as the liability is paid in full within 180 days of assessment.

    Q. Who qualifies for a managed audit?

    Anyone qualifies who has not filed a tax return, or who needs to report additional tax and has not received an audit engagement letter from the Taxation and Revenue Department (TRD). You may be disqualified for a managed audit if you:
    - have an outstanding balance in the tax program you are applying for;- have received more than two non-filer notices from TRD, or
    - are in the process of declaring bankruptcy or under current investigation for a tax-related criminal act.

    Q. What tax types are eligible for a managed audit?

    Most of the state taxes and fees administered by TRD under the Tax Administration Act are eligible. These programs include, but are not limited to, personal income, gross receipts, withholding tax, liquor excise, corporate income and franchise tax, workers’ compensation fee, oil and gas production, weight distance, tobacco products, and compensating tax.If you are interested in a program and have a question about whether it is included, please click the Contact Us button.

    Q. How many times can I request a managed audit?

    You can request only one managed audit per tax program.

    Q. How do I apply for the amnesty program?

    Fill out and submit a managed audit application. Applications can be mailed or faxed, or you can come into a district office  and pick one up. You can inquire about managed audits by calling the Managed Audit Hotline phone number at (505) 841-6216. We can provide more information or you can request an application.

    Q. Where do I send my application/agreement?

    Mail your completed application or agreement to:New Mexico Taxation & Revenue Department
    Audit and Compliance Division
    Attn: Managed Audit, 6th Floor
    P.O. Box 8485
    Albuquerque, NM 87198-8485


    Motor Vehicle Excise Tax

    Q. If a person acquires a vehicle in New Mexico but immediately takes it to his or her state of residence, is that person exempt from New Mexico motor vehicle excise tax on the vehicle?

    A nonresident who acquires a vehicle in New Mexico and takes it to his or her state of residence to be titled does not owe New Mexico motor vehicle excise tax on the acquisition of that vehicle.

    Q. If a person acquires a vehicle outside New Mexico and brings it into this state when he or she establishes New Mexico residency, is that vehicle subject to New Mexico motor vehicle excise tax?

    A person who acquires a vehicle outside New Mexico 30 or more days before establishing residency in this state is exempt from New Mexico motor vehicle excise tax if the vehicle was acquired for personal use.

    Q. Is a rebate, offered for the purchase of a vehicle, included in the price paid for the vehicle for purposes of calculating the motor vehicle excise tax on the sales price?

    Yes. Though a rebate reduces the actual amount paid by the buyer, it does not reduce the total price paid for a vehicle. By law, motor vehicle excise tax is derived from the price paid for the vehicle regardless of any rebates that subsequently reduce the amount the buyer paid.

    Q. If a vehicle rental business buys a vehicle to lease or sell, is its acquisition of that vehicle subject to New Mexico motor vehicle excise tax?

    Such an acquisition of a vehicle is exempt from motor vehicle excise tax if:• the business does not use the vehicle in any way other than holding it for lease or sale, or for leasing or selling it in the ordinary course of business;
    • the lease of the vehicle is for a term of more than six months;

    • the receipts from the lease of the vehicle are subject to New Mexico gross receipts tax, and

    • the vehicle does not have a gross vehicle weight of over 26,000 pounds.


    Natural Gas Processor Tax   

    Q. Where can I find an explanation of this tax?

    Q. What is the purpose of the Natural Gas Processors tax?

    It is a tax on processors for the privilege of operating a natural gas processing plant in New Mexico.

    Q. On what is the tax imposed?

    The tax is imposed on the amount of mmBtus of natural gas delivered to the processor at the inlet of the natural gas processing plant after taking specifically authorized mmBtu deductions. The definition of “mmBtu” is one million British thermal units.

    Q. What is the tax rate?

    Per statute, the Taxation and Revenue Department (TRD) calculates the rate through a formula each year, and TRD must inform each processor of the rate on or before June 15th of each year.

    Q. Are there any tax incentives related to this program?

    No.

    Are there any tax credits related to this tax program?

    No.

    Q. What is the tax-due date for the Natural Gas Processors tax?

    The return and the payment are due on or before the 25th day of the month after the close of the plant processing month.


    Nexus

    Q. Does intangible property such as franchises and licenses give a taxpayer nexus in New Mexico?

    Section 7-9-3(J) NMSA 1978 specifically defines intangible property as property. If it is sold or licensed to be used in New Mexico, the property is present in the state, and you have nexus with New Mexico.

    Q. Are royalties derived from intangible property subject to tax?

    If an entity receives royalties for the license to use a franchise in New Mexico, the royalties are subject to gross receipts tax. If the taxpayer is:- a C-corporation, it is also subject to corporate income tax (CIT) and corporate franchise tax; - an S-corporation, it is subject to corporate franchise tax, and its shareholders are subject to personal income tax (PIT) and the gross receipts tax.

    Q. Does an interstate motor carrier create nexus if it only passes through New Mexico?

    Section 7-4-19 NMSA 1978; regulation 3.5.19.15 Link to: http://www.conwaygreene.com/nmsu/lpext.dll?f=templates&fn=main-h.htm&2.0 applies to trucking companies and how they allocate and apportion their income to New Mexico. This regulation includes a de minimis nexus standard stating that any motor carrier traveling more than 25,000 mobile property miles within New Mexico or making more than 12 trips into New Mexico has created nexus.

    Q. What filing requirements are there for an interstate motor carrier having nexus with New Mexico?

    Trucking companies that meet the de minimis nexus standard must file the appropriate tax returns with New Mexico. If the trucking company is a C-corporation, it files a CIT return and apportions income to New Mexico based on the regulation for calculating payroll, property and sales factors. It is also subject to corporate income tax and corporate franchise tax. If the trucking company is an S-corporation or a partnership, it files a New Mexico Pass-Through Entity (PTE) return. Withholding tax for non-resident shareholders is required unless there is a Non-Resident Owner Income Tax Agreement (PTE-TA) on file releasing the S-corporation from its withholding obligation. New Mexico resident shareholders file New Mexico PIT returns and apportion income to New Mexico based on the trucking company regulation. Only S-corporations are subject to the corporate franchise tax. An interstate motor carrier having nexus with New Mexico is required to file CRS-1 Forms to report its gross receipts from services performed in this state, even though its receipts may be deductible under interstate commerce. To file CRS-1 Forms, a business must obtain a New Mexico CRS identification number.

    Q. What is representational nexus?

    Representational nexus is created when a third party provides in-state services that exceed mere solicitation on behalf of out-of-state clients.

    Q. What does the term "exercising a corporate franchise" in New Mexico mean?

    A corporation exercises its corporate franchise when it seeks to be treated or acts as a legal entity or person subject to the jurisdiction of and privileges provided by state law. Another term for a "corporate franchise" is a "corporate charter."

    Q. What is an agent for the collection of compensating tax, and what is required?

    If the taxpayer has nexus with New Mexico, but the sales transaction is not subject to gross receipts tax, the taxpayer may be obligated to act as an agent for the collection of compensating tax. By New Mexico law, Section 7-9-10 NMSA 1978  the taxpayer is required to collect compensating tax from the buyer and pay it to TRD.

    Q. What would cause a taxpayer to be engaging in business in New Mexico?

    In New Mexico, "engaging in business" means carrying on or causing to be carried on any activity with the purpose of direct or indirect benefit.

    Q. Is New Mexico’s corporate franchise tax subject to the same nexus guidelines as corporate income tax?

    Federal P.L. 86-272 does not provide immunity from the corporate franchise tax. New Mexico’s corporate franchise tax is imposed on all domestic and foreign corporations, including S corporations, that engage in business in New Mexico or exercise their corporate franchise in this state, whether actively engaged in business or not.

    Q. What is de minimis activity?

    De minimis activities are those that, when taken together, establish only a trivial connection with the taxing state. An activity regularly conducted within a taxing state according to a company policy or on a continuous basis is normally not considered trivial.

    Q. If a taxpayer buys items from New Mexico vendors for resale only, will this activity give the taxpayer nexus in New Mexico?

    As defined by New Mexico law, "buying means the transfer of property for consideration or any performance of service for consideration." Because buying items for resale will result in a benefit to the taxpayer, buying activities constitute "engaging in business" in New Mexico. How the buying activities are conducted determines whether the taxpayer has nexus. If the taxpayer comes into the state to make purchases, it has created nexus with New Mexico.

    Q. Does registration with the Taxation and Revenue Department or qualification to do business by the State Corporation Commission remove the immunity provided by Public Law 86-272?

    The immunity afforded by P.L. 86-272 does not apply to any corporation incorporated in New Mexico. Immunity is not lost merely through registering in the state.

    * Nexus is a complicated subject that has many gray areas. The facts and circumstances for your particular situation may vary from the preceding discussion.

    Contact TRD


    Non-Taxable Transaction Certificates

    Q. Why would I need a Nontaxable Transaction Certificate?

    In transactions for which state law provides gross receipts tax deductions, the buyer or lessee may give the seller or lessor a New Mexico nontaxable transaction certificate (NTTC) to document the business’s deduction of its receipts. Deductible receipts are not subject to gross receipts tax. They are subtracted from gross receipts before the tax is calculated.In deductible transactions, the seller or lessor incurs no gross receipts tax to pass along to the customer, so the customer makes the purchase “tax free.” Although deductible receipts are not subject to gross receipts tax, they must be reported to the New Mexico Taxation and Revenue Department (TRD) on a Form CRS-1. Under state law, exempt receipts do not need to be reported.

    Q. Will New Mexico accept tax-exempt certificates from another state?

    Because the gross receipts tax structure differs fundamentally from a sales tax, New Mexico does not accept any tax exemption or deduction certificates issued by other states. New Mexico does, however, accept Multijurisdictional Uniform Sales and Use Tax Certificates (MTCs) and Border States Uniform Sale for Resale Certificates (BSCs).

    Q. What types of documentation are required to support a deduction from gross receipts tax?

    The nontaxable transaction certificate (NTTC) is the only acceptable proof of certain deductions. The buyer obtains an NTTC from TRD to give to a seller. The seller then may deduct those receipts when determining taxable gross receipts. In practice, this means the buyer can buy goods and services free of the gross receipts tax that is usually passed along by the seller. The seller must accept an NTTC in good faith, reasonably confident that the buyer executing the NTTC will use the property or service in the manner stated on the NTTC. The seller needs only one NTTC from each buyer to cover all transactions of the same type with that buyer.
    New Mexico businesses that sell to out-of-state buyers may obtain the out-of-state buyer certificate, NTTC-OSB. Unlike other NTTCs that the buyer obtains from TRD, the NTTC-OSB is obtained by the seller. The New Mexico seller completes Form ACD-31050, Application for Nontaxable Transaction Certificates (NTTCs) , and the seller then provides the NTTC-OSBs to out-of-state customers who are: 1) buying tangible personal property either for resale or for use as an ingredient or part of a manufactured product, or (2) buying manufacturing services that are performed directly upon either tangible personal property the purchaser is in the business of manufacturing or in the manufactured item’s ingredients or parts. The buyer must provide all the required information on an NTTC-OSB and give it to the New Mexico seller.

    Q. How do I get NTTCs and NTTC-OSBs?

    To obtain NTTCs, an applicant must have a New Mexico CRS identification number, which is an 11-digit number also known as a business tax identification number. Obtain that number by submitting a completed Form ACD-31015, Application for Business Tax Identification Number F to TRD. Click ACD-31015 Instructions for instructions to complete the form. You may also register online by using Taxpayer Access Point . A taxpayer who has a CRS identification number is registered with TRD.

    Q. Ca n I request NTTC’s Online?

    Yes. As a registered New Mexico gross receipts taxpayer, you can obtain, execute and record the use of NTTCs through NTTC-NET . To contact persons who can assist you with this online program, please click the Contact Us button. You may use NTTC-NET to make both initial and additional applications for NTTCs. If you are the seller or lessor, you can use your CRS identification number to execute an NTTC online. If you know the NTTC recipient’s CRS identification number, you may execute multiple NTTCs online. You can print an NTTC on a local printer, although you need not print an NTTC to execute it.

    Q. Why would I not be able to issue or receive an NTTC?

    If TRD’s records show that you have an outstanding tax liability or that you are a nonfiler for one or more reporting periods, TRD may refuse your application for NTTCs until you pay the liability or submit the missing reports.

    Q. Is there only one type of NTTC?

    No. The available NTTC types are:No. The available NTTC types are:
    - Type 2 certificates may be used for certain deductions related to the purchase of tangible personal property;
    - TYPE 5 certificates may be used for certain deductions related to services;
    - TYPE 6 certificates may be used for deductions related to construction industry;
    - TYPE 9 certificates may be used for deductions related to the purchase of tangible personal property by government entities, 501(c)(3) organizations, federal or state-chartered credit unions and Indian tribes, nations or pueblos;
    - TYPE 10 certificates may be used for the purchase of tangible personal property or services that are eligible generation plant costs by a person that holds an interest in a qualified generating facility;
    - TYPE 15 certificates may be used for the purchase of tangible personal property by qualified federal contractors;
    - TYPE 16 certificates may be used for the purchase of property and services, the leasing of property by qualified film production companies and accredited diplomats or missions, and
    - TYPE NTTC-OSB certificates may be used by out-of-state buyers for the purchase of tangible personal property that will be resold or become an ingredient or component of a manufactured product, or for services performed on a manufactured product. For more information on NTTC types and related deductions, please see FYI-204, Nontaxable Transaction Certificates (NTTCs)

    Q. Are there any additional deductions an NTTC can be used for?

    Statutes allow, but do not require, an NTTC to be executed for these transactions:

    - sales of tangible personal property other than construction materials to agencies of the United States and New Mexico governments (Section 7-9-54), Type 9 NTTC;

    - sales of tangible personal property to Indian tribes, nations or pueblos for use on Indian reservations or pueblo grants (Section 7-9-54), Type 9 NTTC;

    - sales of tangible personal property to federal or state-chartered credit unions (Sections 7-9-54 and 7-9-61.2) Type 9 NTTC;

    - sales of services to an out-of-state buyer when the delivery and initial use of the product of the service occur outside New Mexico (Section 7-9-57) Type 5 NTTC, and

    - Type 15 NTTC may be executed by qualified federal contractors on a contract-by-contract basis. A copy of the federal contract is required.
    To review the cited statutes, please see NMSA 1978

    Q. How do I deliver an NTTC to a vendor?

    Complete an NTTC form by entering the required information about the vendor to whom the NTTC is to be delivered. An NTTC may not be executed by anyone other than the person to whom TRD has issued it. You may complete an NTTC either online or by means of a paper NTTC obtained by application to TRD.
    To complete an NTTC online, access NTTC-NET and follow the instructions on the screen. You may keep the hard copy of the NTTC in your business records but the record in NTTC-NET is sufficient documentation for the deduction.

    Q. Can I make photocopies of my NTTC’s?

    An NTTC may be copied only:

    - by TRD or, on TRD’s request, by the person to whom the NTTC has been issued or to the seller or lessor who has accepted the NTTC for audit, tax compliance or tax administration purposes;

    - by the person to whom TRD has issued the NTTC for internal record-keeping purposes or in response to a request from a seller or lessor as a duplicate of the executed NTTC, or

    - by the seller or lessor who has accepted in good faith an NTTC executed by a buyer or lessee for internal record-keeping purposes only.

    No buyer, lessee, seller or lessor may execute or attempt to execute a photocopy or other reproduction of a previously executed NTTC. Doing so may result in suspension of the privilege of using NTTCs.


    Oil and Gas Proceeds Witholding Tax

    What is the Oil and Gas Proceeds Withholding Tax?

    The oil and gas proceeds withholding tax is a withholding tax on the amount paid to nonresidents of New Mexico from oil and gas wells located in New Mexico.

    Q. What does “oil and gas proceeds” mean?

    Oil and gas proceeds are amounts derived from production and payable to recipients (remittees) as royalty interest, overriding royalty interest, production payment interest, working interest, or any other amount expressed as a right to a specified interest either in the cash proceeds from the sale of oil and gas production, or in the cash value of that production.

    Q. Who must withhold?

    The remitter (the person, whether an individual or a business) who makes an oil and gas proceeds payment to a nonresident of New Mexico must withhold from that payment. The recipient must be a qualified remittee.

    Q. Who is a qualified remittee?

    A qualified remittee is a person who receives oil and gas proceeds from New Mexico wells and who is not a resident of New Mexico. As proof of a New Mexico residence, the Taxation and Revenue Department (TRD) will accept a New Mexico address provided by the remittee as the address to mail federal form 1099-MISC. If the recipient supplies no address for form 1099-MISC, then TRD will accept a New Mexico address to which the actual payment is mailed as proof that the recipient is a New Mexico resident.

    Q. How much do I withhold?

    Withhold at the top personal income tax bracket rate, which is 4.90% of payments made after January 1, 2008. Please see Form RPD-41284, Quarterly Oil and Gas Proceeds Withholding Tax Return  for current rates.

    Q. Must both parties withhold if the recipient is someone who pays oil and gas proceeds to another recipient subject to withholding?

    The first payer in the chain is not required to withhold from payments to a person who in turn makes payments of oil and gas proceeds to another recipient.

    Q. What proof does TRD accept that an oil and gas proceeds payment is subject to further distribution by the recipient?

    Acceptable proof of redistribution of oil and gas proceeds includes – but is not limited to – written notification from a recipient, or such internal documentation as signed division orders showing that the recipient must make payments to another person.

    Q. Who is not a qualified remittee?

    The United States of America, the State of New Mexico and any agencies, instrumentalities or political subdivisions of either government are not qualified, nor are 501(c)(3) nonprofit organizations. The payer does not need to withhold from oil and gas proceeds paid to any of those recipients.

    Q. How do I pay the Oil and Gas Proceeds Withholding Tax?

    Submit Form RPD-41284, Quarterly Oil and Gas Proceeds Withholding Tax Return with payment on or before the 25th day of the month following the close of the calendar quarter in which tax was withheld.

    Q. Are there any other report requirements?

    Yes, there are:Remitters file Form RPD-41283, Annual Summary of Oil and Gas Proceeds Withholding Tax , summarizing the oil and gas withholding tax withheld for the year. Attach to the summary the annual statements of withholding for each recipient (see following paragraph). The annual summary and the annual statements of withholding are due TRD by the last day of February of the year following the close of the calendar year.
    The remitter must provide to each recipient an annual statement of withholding on or before February 15 of the following year. The statement must be in a form prescribed by TRD. Remitters may use federal Form 1099-MISC, Miscellaneous Income Information Return, or state Form RPD-41285, Annual Statement of Withholding of Oil and Gas Proceeds 

    Q. How do remittees/recipients claim withholding tax?

    Recipients may claim the oil and gas proceeds withholding tax paid against personal or corporate income tax due. On the PIT-1 general return for individuals, or on the CIT-1 corporate income tax return, report the amount withheld. Attach the annual statement of withholding to the return. A recipient that is a pass-through entity claims the withholding on the PTE return.

    Q. Is a pass-through entity that has had income withheld from its oil and gas proceeds required to deduct and withhold from similar income distributed to a nonresident owner’s share of net income?

    A pass-through entity is not required to deduct and withhold oil and gas proceeds from a nonresident owner’s share of net income under the Oil and Gas Proceeds Withholding Tax Act.

    Q. What is the effective date?

    The effective date of legislation requiring withholding from oil and gas proceeds from wells located in New Mexico is October 1, 2003. Withholding is required from any payment made after the effective date regardless of sales/production date.

    Q. Is withholding required if an oil and gas proceeds payment is less than $10?

    If any single payment is more than $10, the remitter must withhold. The remitter is not prohibited, however, from withholding if the amount is less than $10.

    Q. How do remittees/recipients claim withholding tax?

    Recipients may claim the oil and gas proceeds withholding tax paid against personal or corporate income tax due. On the PIT-1 general return for individuals, or on the CIT-1 corporate income tax return, report the amount withheld. Attach the annual statement of withholding to the return. A recipient that is a pass-through entity claims the withholding on the PTE return.

    Q. Is a pass-through entity that has had income withheld from its oil and gas proceeds required to deduct and withhold from similar income distributed to a nonresident owner’s share of net income?

    A pass-through entity is not required to deduct and withhold oil and gas proceeds from a nonresident owner’s share of net income under the Oil and Gas Proceeds Withholding Tax Act.

    Q. What is the effective date?

    The effective date of legislation requiring withholding from oil and gas proceeds from wells located in New Mexico is October 1, 2003. Withholding is required from any payment made after the effective date regardless of sales/production date.

    Q. Is withholding required if an oil and gas proceeds payment is less than $10?

    If any single payment is more than $10, the remitter must withhold. The remitter is not prohibited, however, from withholding if the amount is less than $10.


    Oil and Gas Production Taxes

    Q. Where can I find the statutory explanation of severance tax?

    Q. What is the purpose of the oil and gas severance tax?

    It taxes all products severed and sold in New Mexico.

    Q. On what is the oil and gas severance tax imposed?

    The tax is imposed on the taxable value of the product.

    Q. What is the oil and gas severance tax rate?

    On all products, the tax rate is three and three-fourths percent (3.75%) of the taxable value.

    Q. Are there any tax incentives related to the oil and gas severance tax program?

    Tax-incentive rates do exist per statute but may or may not be in effect. Tax incentives are included within the Enhanced Oil Recovery Act (Chapter 7, Article 29A) and the Natural Gas and Crude Oil Production Incentives Act (Chapter 7, Article 29B) Please contact the Oil and Gas Bureau  for further information and applicability.

    Q. Are there any tax credits related to the oil and gas severance tax program?

    You may qualify for a credit against current severance taxes if the products are severed from Indian tribal land or imposed on the privilege of severing products from Indian tribal land. This credit is the intergovernmental production tax credit.

    Q. What is the due date for the oil and gas severance tax?

    File the return and the payment on or before the 25th day of the second month after the month of production.

    Q. Where can I find the statutory explanation of the oil and gas conservation tax?

    Review specific information on Chapter 7, Article 30 NMSA 1978

    Q. What is the purpose of the oil and gas conservation tax?

    The conservation tax is a tax on all products severed and sold in New Mexico.

    Q. On what is the oil and gas conservation tax imposed?

    The tax is imposed on the taxable value of the product.

    Q. What is the oil and gas conservation tax rate?

    The tax rate depends on the product: - on oil, and also on oil and other liquid hydrocarbons removed from natural gas at or near the wellhead, the base rate is nineteen-hundredths percent of the taxable value (0.19%). Effective for the July 2010 production and quarterly thereafter, the rate will increase to twenty-four hundredths percent (0.24%) if the price of West Texas intermediate crude in the previous calendar quarter exceeds $70 per barrel; or

    - on natural gas, carbon dioxide, helium and non-hydrocarbon gases, the rate is nineteen-hundredths percent of the taxable value (0.19%).

    Are there any tax incentives related to the oil and gas conservation tax program?

    No.

    Q. Are there any tax credits related to the oil and gas conservation tax program?

    You may qualify for a credit against current conservation taxes if the products are severed from Indian tribal land or imposed on the privilege of severing products from Indian tribal land. This credit is called the intergovernmental production tax credit.

    Q. What is the due date for the oil and gas conservation tax?

    File thre return and hte payment on or before the 25th day of the second month following the month of production.

    Q. Where can I find the statutory explanation of the oil and gas emergency school tax?

    Review specific information in Chapter 7, Article 31 NMSA 1978

    Q. What is the purpose of the oil and gas emergency school tax?

    It is a privilege tax on the business of every person severing products in New Mexico.

    Q. On what is the oil and gas emergency school tax imposed?

    The tax is imposed on the taxable value of the product.

    Q. What is the oil and gas emergency school tax rate?

    The tax rate depends on the product:
    -       on oil, and on oil and other liquid hydrocarbons removed from natural gas at or near the wellhead, three and fifteen hundredths percent (3.15%) of the taxable value;
     
    -       on carbon dioxide, helium and non-hydrocarbon gases, three and fifteen hundredths percent (3.15%) of the taxable value, or
     
    -       on natural gas, four percent (4%) of the taxable value.

    Q. Are there any tax incentives related to the oil and gas emergency school tax program?

    Tax incentive rates do exist per statute but may or may not be in effect. Please click the Contact Us button and speak with someone at the Oil and Gas Bureau for further information.

    Q. Are there any tax credits related to the oil and gas emergency school tax program?

    A taxpayer may qualify for a credit against current emergency school taxes if the products are:
    - severed from Jicarilla Apache tribal land. This credit is identified as the Jicarilla Apache tribal capital improvement tax credit (Section 7-31-27 NMSA 1978); or
    - severed from Indian tribal land or imposed on the privilege of severing products from Indian tribal land. This credit is called the intergovernmental production tax credit.

    Q. How is the Jicarilla Apache tribal improvement tax credit recognized for purposes of the oil and gas emergency school tax?

    The Jicarilla Apache tribal improvement tax credit is calculated monthly by product and production unit. It is the lesser of either the amount of the Jicarilla Apache tribal improvement tax imposed by the tribe, or seven-tenths of one percent of the taxable value as determined by applicable state law.

    Q. What is the due date for the oil and gas emergency school tax?

    File the return and the payment on or before the 25th day of the second month following the month of production.

    Q. Where can I find the statutory explanation of the oil and gas ad valorem production tax?

    Q. What is the purpose of the oil and gas ad valorem production tax?

    It is an ad valorem (in proportion to the value) tax on the value of severed products.

    Q. On what is the oil and gas ad valorem production tax imposed?

    The tax is imposed on the assessed value of products severed and sold from each production unit at a rate certified to the Taxation and Revenue Department (TRD).

    Q. What is the oil and gas ad valorem production tax rate?

    Per statute, the Department of Finance and Administration certifies the rate which is effective from September of any given year through the following August.

    Q. Are there any tax incentives related to the oil and gas ad valorem production tax program?

    No.

    Q. Are there any tax credits related to the oil and gas ad valorem production tax program?

    A taxpayer may qualify for a credit against current ad valorem production taxes if the products are severed from Indian tribal land or if the tax is imposed on the privilege of severing products from Indian tribal land. This credit is called the intergovernmental production tax credit.

    Q. What is the due date for the oil and gas ad valorem production tax?

    File the return and payment on or before the 25th day of the second month after the month of production.

    Q. Where can I find the statutory explanation of the oil and gas production equipment ad valorem tax?

    Q. What is the purpose of the oil and gas production equipment ad valorem tax?

    It is an ad valorem (in proportion to the value) tax on the assessed value of equipment at each production unit.

    Q. On what is the oil and gas production equipment ad valorem tax imposed?

    The tax is imposed on the assessed value of products severed and sold from each production unit at a rate certified to TRD.

    Q. What is the oil and gas production equipment ad valorem tax rate?

    Per statute, the Department of Finance and Administration certifies the tax rate that is used on the tax statement/assessment to the operators of the property.

    Q. Are there any tax incentives related to the oil and gas production equipment ad valorem tax program?

    No.

    Q. Are there any tax credits related to the oil and gas production equipment ad valorem tax program?

    A taxpayer may qualify for a credit against current production equipment ad valorem taxes if the products are severed from Indian tribal land or if tax is imposed on the privilege of severing products from Indian tribal land. This credit is called the Intergovernmental production tax credit.

    Q. What is the due date for the oil and gas production equipment ad valorem tax?

    TRD sends the tax statement and assessment to the operator of record on or before October 15. Payment due on or before November 30.

    Q. How is the intergovernmental tax credit recognized?

    The tax credit applies only to “qualifying wells.” It is calculated each month by product and production unit at 75% of the lesser of: either the aggregate amount of severance, privilege, ad valorem or similar tax in effect on March 1, 1995, that is imposed by the Indian nation, tribe or pueblo, or the aggregate amount of the oil and gas production tax imposed by the state on qualifying wells.


    Personal Income Tax

    Q. What is New Mexico's personal income tax rate?

    New Mexico uses a seven-bracket, graduated-rate table ranging from 1.7% to 4.9% of taxable income.

    Q. Who is required to file?

    Two situations require you to file personal income tax returns in New Mexico:
    − If you are required to file a federal tax return with the IRS and you are a New Mexico resident, you must file a state income tax return, and
    − If you are required to file a federal income tax return with the IRS and you are a nonresident with income or loss from New Mexico sources, you must file a state income tax return.

    Q. How do I determine if I'm a resident or a nonresident?

    Please see the Personal Income Tax Instructions for definitions of a resident, nonresident ,first-year resident , part-year resident, and residency for military personnel.

    Q. What forms do I need to file New Mexico personal income taxes?

    The forms you need depend on two factors: your financial status and your residency category. Please see the Personal Income Tax Instructions for guidance

    Q. I have income from both inside and outside New Mexico. Are there special forms that I have to file?

    In certain circumstances, you may be eligible for a credit for taxes paid to another state. Generally, this credit is for New Mexico residents who earned wages in another state. For non-residents with income from New Mexico sources, a PIT-B Allocation and Apportionment of Income Schedule  is generally used.

    Residents with income or losses outside New Mexico from rents and royalties, gains or losses from the sale or exchange of property, income or losses from pass-through entities, or other types of income not included in lines 1-6 and lines 8 and 9 of the PIT-B must use the PIT-B Allocation and Apportionment Schedule. The PIT-B schedule separates New Mexico income so tax liabilities can be distributed appropriately.

    Q. Why am I being taxed on income earned in another state just because I was in New Mexico for 185 days?

    You are considered a New Mexico resident if you were present for 185 days or more. Section 7-2-2(S) NMSA 1978  You are therefore taxed on all your income like any other resident, but you may be able to take credit for taxes paid to another state. Refer to the instructions on the PIT-1.

    Q. Does New Mexico offer a credit for income tax paid to another state?

    Yes, but only for New Mexico state residents. The credit is based on the tax the other state imposes on the portion of gross income that is also included in New Mexico gross income. The credit may not exceed the New Mexico income tax liability, nor can it be more than Q.5% of the income taxable in the other state.

    Q. Does New Mexico offer tax breaks to active duty military members?

    Yes. Active duty income earned by active duty members of the armed forces is exempt from New Mexico’s personal income tax. File a PIT-1 resident tax return and use a PIT-ADJ schedule to deduct any military active duty pay.

    Q. How is residency determined for active duty military members and their spouses?

    Military personnel are subject to special residency rules. A person serving in the United States Armed Forces does not become a resident of New Mexico solely because he or she is present in New Mexico on military orders even when physically present in this state for 185 days or more. A New Mexico resident serving in the military does not lose New Mexico residency solely because he or she is absent on military orders.

    Beginning with tax year 2009, spouses of military service members who move into New Mexico solely to be with their spouses who are here on military orders may keep their out-of-state residency status and source their non-military wages, salaries, tips etc. to their state of residence. For tax years beginning on or after January 1, 2007, active duty armed forces pay is exempt from New Mexico personal income tax.

    Q. Does New Mexico offer a tax break for working families?

    Yes. A refundable tax credit has been added. It totals ten percent of the federal earned income tax credit for which a taxpayer is currently eligible. There is also an exemption for low-and middle-income taxpayers that is based upon adjusted gross income. To qualify you must have an adjusted gross income of $27,500 or less if you are married and filing separately, $36,667 or less for single individuals, or $55,000 or less for married individuals filing jointly.

    Q. Does New Mexico offer a tax break to retirees?

    Yes. Depending on income level, taxpayers 65 years of age or older may be eligible for a deduction from taxable income of up to $8,000 each. Low-income taxpayers may also qualify for a property tax rebate even if they rent their primary residence. Beginning with tax year 2002 persons 100 years of age or more who are not dependents of other taxpayers are exempt from filing and paying New Mexico personal income tax.

    The state also provides an income tax exemption of up to $3,000 to those 65 and older for medical expenses for either that person or his or her spouse or dependents. The expenses must exceed $28,000 and must not be reimbursed or compensated by other means like health insurance or Medicaid. That same taxpayer may also claim an additional refundable credit of up to $2,800 for unreimbursed or uncompensated medical expenses.

    Q. If I have an Automatic Extension of Time to File with the IRS do I need to file an extension with New Mexico?

    No, New Mexico honors any federal extension of time to file that you have. You do not need to request a separate state extension if you already have a federal extension. If you require additional time than what is granted at the federal level, you must file a New Mexico extension using Form RPD-41096, Extension of Time to File

    Q. Why am I charged interest when I had an extension to file?

    An extension of time to file your return does not extend the time to pay.  Interest accrues on income tax that is not paid on or before the due date. If you expect to owe more tax when you file your return, you should make a payment online or by mail, using a payment voucher and avoid the accrual of interest on that amount.

    Q. What if I change addresses after I file my return and before I receive my refund?

    The best way to avoid a delay in receiving your refund is to use Refund Express. The Department will deposit your refund directly into your bank account. If your bank does not accept your refund express, the Department will mail a paper check to the latest address received. Normally the Post Office does not forward refund checks. Notify the Department of your new address in writing using Form RPD-41260, Personal Income Tax Change of Address Form , as soon as possible. Your account will be noted of the address change and the refund redirected to the correct address when processed.

    Q. If I filed “married filing jointly” on my federal tax return, can I file “married filing separately” for New Mexico?

    No, a taxpayer filing a New Mexico income tax return must use the same filing status for New Mexico and the IRS. Spouses using "married filing jointly" for the IRS must use the same status for New Mexico; those using "married filing separately" for the IRS must do likewise for New Mexico.

    Q. Should the return and payment be mailed to the same address?

    No. Payments, including estimated payments, should be mailed to:

    No, returns are mailed to:
    New Mexico Tax and Revenue Department
    P.O. Box 25122
    Santa Fe, NM 87504-5122
     
    Payments, including estimated payments, should be mailed to:
    New Mexico Taxation and Revenue Department
           P.O. Box 8390
           Santa Fe, NM 87504-8390
      

    Q. Can I make payments by phone or electronically?

    Yes, for phone payments call (505) 841-6352 or 1-866-285-2996. Electronic payments can be made by electronic check or credit card using our online services.  A convenience fee will be added for credit card payments.

    Q. Can I file an amended return electronically?

    Yes, you can file amended returns electronically for the current year until around the middle of October.

    Q. Did you receive my return?

    We do not track returns as they’re received. If you sent your return electronically and received a confirmation number, we have your return. If you mailed your return by certified mail and received the receipt back, then you can be assured we have it. Otherwise, please allow the full processing time of up to 12 weeks before contacting the Department.

    Q. What is form 1099-G and why did I receive it?.

    Form 1099-G is an income statement issued by the department which reports any refund, credit, carryforward, or offset issued to you for the tax year indicated in Box Q.  This document is not a bill.
    You received this statement because it may be taxable to you if you deducted the state or local income tax paid as an itemized deduction on your federal income tax return. If you received interest on this amount, report it as interest income on your tax return.

    Q. Why did I receive a 1099-INT when I never received a check for interest?

    Interest paid on your state income tax refund was combined on your refund check. A 1099-INT form must be filed separately to account for this payment.

    Q. Can I check on the status of my friend’s, parent’s, dependent’s or spouse’s refund?

    A signed authorization form  ACD-31102, Tax Information Authorization making you the authorized representative is required to release any information about someone else’s refund. Only in the case of a married filing jointly return may we release information on a refund to either spouse.

    Q. I mailed my return the same day as my neighbor. The neighbor has already received

    Each return is sorted and processed individually. We receive thousands of returns daily. Even if they were mailed on the same day, the processing times may vary. Before checking on the status of your refund, please allow eight weeks if you filed prior to March 15 or 12 weeks if you filed after that date.

    Q. Where can I get copies of my W-2s?

    Please contact your employer for a copy of your W-Q. If you cannot locate your employer, you may be able to get the information from your last pay stub for the year. If neither is available, you would have to estimate your wages and withholding on a Substitute W-2 form available from the IRS Please be advised that you will be held responsible for any information you enter on the form.

    Q. Does New Mexico have a state version of the federal W-4 form?

    New Mexico does not have a form equivalent to the federal Form W-Q. For New Mexico withholding tax you should use a federal W-4 and write across the top of that form: "For New Mexico Withholding Tax Only."

    Q. Who may claim the deduction for unreimbursed or uncompensated medical care expenses?

    Any taxpayer who files a New Mexico PIT-1 income tax return, including out-of-state residents with income tax responsibility to New Mexico, may claim the deduction. You may claim qualified expenses for medical care for yourself, your spouse or your dependent. See Section 152 of the Internal Revenue Code for the definition of "dependent." Non-resident PIT-1 filers take the deduction after the New Mexico percentage calculated on Schedule PIT-B is applied to total unreimbursed medical expenses.

    Q. What is an estimated payment?

    There is no penalty for underpayment of estimated personal income tax if:
    − You are a first-year resident;
    − Your tax liability (Net New Mexico income tax less total rebates and credits from Schedule RC shown on your return for the current year, less amounts withheld under the Withholding Tax Act) is less than $500. Do not subtract tax withheld according to the Oil and Gas Proceeds Withholding Tax, Sections 7-3A-1 through 7-3A-9 NMSA 1978, when determining your tax liability, or
    − You are a full-year New Mexico resident whose previous tax year was a 12-month tax year, and you owed zero tax for that tax return.
    Persons with irregular or seasonal income, or who are farmers or ranchers should review the instructions for FormRPD-41272, Calculation of Estimated Personal Income Tax Underpayment Penalty

    Q. Where do I take the deduction for unreimbursed or uncompensated medical care expenses?

    Take the deduction on the PIT-1 form. Check the PIT-1 line instructions for changes in line numbers in any given year.

    Q. When are estimated personal income tax estimated payments due?

    Generally, four equal installments of the required annual payment are due on April 15, June 15, September 15, and January Q. If any of these installments are underpaid or late, penalty is computed daily at the quarterly rate on the amount underpaid or paid late. Penalty accrues until estimated taxes are paid but will not accrue after April 15 for the prior tax year.

    Yes. The state’s low-income comprehensive tax rebate is for resident filers with modified gross incomes of $22,000 or less (for tax year 2000 and later) who also meet other qualifications.  “Modified gross income” is a calculation unique to New Mexico. It means -- for the entire household -- all income and all compensation from other sources regardless of whether the income is taxable by the U.S. Government or the state of New Mexico.

    There is also an exemption for low-and middle-income taxpayers that is based upon adjusted gross income. To qualify you must have an adjusted gross income of $27,500 or less if you are married and filing separately, $36,667 or less for single individuals, or $55,000 or less for married individuals filing jointly.

    Q. How is estimated personal income tax underpayment penalty computed?

    Determine your “required annual payment.” The required annual payment for tax year 2010 is the lesser of:
     
    -     90% of the current year, or the 2010 tax liability, or
    -     100% of the previous year, or the 2009 tax liability.
     
    For purposes of determining the required annual payment, tax liability equals the Net New Mexico Personal Income Tax due on the return less New Mexico rebates and credits. You may not subtract estimated payments and income tax withheld from Net New Mexico Personal Income Tax in this calculation.


    Personal Income Tax E-filing Mandate

    Q When did the electronic-media filing requirement begin for practitioners?

    The requirement for tax practicioners to file personal income tax returns by Department-approved electronic media began January 1, 2008, Section 7-1-71.4 NMSA 1978.

    Q. Does the requirement apply to all New Mexico personal income tax returns prepared by practitioners?

    In any calendar year, tax practitioners who prepare more than twenty-five (25) New Mexico personal income tax returns for the prior year must file those returns on Department-approved electronic media. Failure to do so incurs a penalty of $5 for each return filed in violation of the mandate.

    Q What about amended New Mexico personal income tax returns?

    An amended return does not count in reaching the threshold that mandates tax practitioners to file by Department-approved electonic media.

    Q. What if I work in an office where a pool of preparers completes more than 25 New Mexico personal income tax returns?

    The mandate applies to the person who prepares New Mexico personal income tax returns for others for compensation and the person who employs one or more persons to do so. If a person is employed by an office or a branch of an office where all preparers use the same EIN, then all returns filed by the office or the branch count toward the threshold that mandates filing by Department-approved electronic media. New Mexico uses the federal Employer Identification Number (EIN) and the Social Security Number or Preparer Taxpayer Identification Number (PTIN) to identify the tax return preparer to determine the penalty.

    Q. Suppose the taxpayer does not want to file his or her return by electronic means.

    A taxpayer may request a waiver of the requirement to have a return electronically filed. The taxpayer completes Form RPD-41338 , Taxpayer Waiver for Preparers Electronic Filing Requirement. The form is available online. The preparer retains the signed Form RPD-41338, Taxpayer Waiver for Preparers Electronic Filing Requirement, in its records and marks the check box in the Paid Preparer’s Signature Box on the individual’s return that the form is on file.

    Q. Some supporting back-up documentation cannot be submitted electronically. What do I do?

    If supporting back-up documentation is required and cannot be submitted electronically to the Department, then you may electronically file the return and submit the backup to the Department using New Mexico Form PIT-8453 Individual Income Tax Declaration For Electronic Filing And Transmittal as a transmittal. If you want to submit the form and the back-up document together, then a paper return with a 2D Bar Code printed on the form qualifies as an electronically filed return. If you choose one of these options, the return is considered filed by Department-approved electronic media

    Q. I am not familiar with a 2D Bar Code. How do I know if a 2D Bar Code appears on the form?

    New Mexico uses two types of bar codes on its personal income tax forms. All of the state’s principal personal income tax forms and schedules have a “Form” Bar Code (3of9 Bar Code) printed in the upper right hand corner of the page. This code allows the scanner to identify the form. A “2D Bar Code” is an additional bar code generated by software and printed only on page 2 of Form PIT-Q. The 2D Bar Code is different from the “Form” Bar Code. It appears underneath the “Form” Bar Code on page 2 of Form PIT-Q. You may also check with the tax-preparation-software company to determine whether it supports the printing of the 2D Bar Code for Form PIT-Q.

    Q. How do I find a software product that supports 2D Bar Codes?

    Every year New Mexico publishes a list of software developers and form vendors whom the state approves to print substitute New Mexico income tax forms. The list also indicates whether the software company has approval to support the printing of the 2D Bar Code on Form PIT-Q. Software developers require approval each year. The list of approved software companies appears on or around the end of the tax year. If you are looking for a software solution supporting 2D Bar Codes before release of the approval list for the tax year, check with the software company to determine whether it plans to support 2D Bar Code on its New Mexico personal income tax returns. To view the list, go to Tax Professionals. 

    Q How do I electronically transmit New Mexico personal income tax returns through the Department’s Internet Website?

    Click here  to access New Mexico WebFile. You must create an account and establish a user name and password to begin. An individual may use the WebFile application to file his own return, or a tax return preparer may use the application to file multiple returns. The user name and password serve as the preparer’s signature. There is no cost to use this service.

    Q How do I electronically transmit New Mexico personal income tax returns through the Internet using a third-party software or online program?

    Through a cooperative federal/state e-file effort, you can transmit a federal personal income tax return and the New Mexico personal income tax return together. You can also transmit a New Mexico personal income tax return through the Internet using software or an online program. Check with software companies to determine the costs associated with using their applications.

    Q. Do I need approval to e-file?

    Prior to e-filing with the IRS, tax preparation firms must apply to be an authorized IRS e-file provider. Apply as early as possible to be sure of approval before January 1 of the new year. There may be delays in processing applications for new applicants. There is no pre-application process with New Mexico. NOTE: To use federal/state e-file, you must be sure that you are approved by the IRS for the fed/state program. Further, the software you use must be approved by New Mexico for e-filing New Mexico returns.

    Q. How do I register to be an authorized IRS e-file provider?

    Tax preparation firms should register for e-services and complete an IRS e-file application available at the IRS web site.

    Q. How do I find a software company approved by New Mexico for fed/state filing?

    Every year New Mexico publishes a list of approved fed/state software developers who have demonstrated successful transmission of New Mexico personal income tax returns through the fed/state program. Software developers require annual approval. The list of approved software companies appears on or around the beginning of the year. If you are looking for a software solution before release of the approval list for the tax year in which you wish to e-file personal income tax returns, ask the software company whether it plans to support New Mexico state personal income tax returns. To view the list of approved companies, go to Tax Professionals. 

    Q. What are the benefits of e-filing returns?

    The chief benefits of e-filing returns are faster refunds and fewer key-entry errors. You also save tax dollars, and the electronically transmitted return cannot be lost in the mail.

    Q How do I contact the Department for more information about the electronic media requirement?

    Tax preparers should call (505) 827-0827 or their local district offices.

    Q. How does e-filing help the Department?

    E-filing eliminates key-entry errors; improves customer service, reduces the number of seasonal workers, and makes better use of staffing resources and tax dollars.

    Are there any known problems that a tax practitioner should be aware of when using a form with a 2D Bar Code?

    Yes, there are two common errors that taxpayers and tax practitioners make when using a form with a 2D Bar Code:
     
    -     If the Department receives a poor quality copy of a return with a 2D Bar Code, the information contained in the bar code cannot be electronically captured from the form. The form must be manually entered.
    -     When changes to the form are necessary after the software product has printed the return, do not write changes by hand on the form. They will not be changed in the 2D Bar Code. Preparers should go back into the software product, make the changes, and then reprint the form so that the 2D Bar Code contains the changes.

    Q Are there any known problems that a tax practitioner should be aware of when using a form with a 2D Bar Code?

    Yes, there are two common errors that taxpayers and tax practitioners make when using a form with a 2D Bar Code:
     
    -     If the Department receives a poor quality copy of a return with a 2D Bar Code, the information contained in the bar code cannot be electronically captured from the form. The form must be manually entered.
    -     When changes to the form are necessary after the software product has printed the return, do not write changes by hand on the form. They will not be changed in the 2D Bar Code. Preparers should go back into the software product, make the changes, and then reprint the form so that the 2D Bar Code contains the changes.



    Property Tax

    Q. Does the taxpayer have the right to appeal from the hearing officer’s decision?

    Yes.  If either the taxpayer or the Department disagrees with the factual findings or legal conclusions of the hearing officer, that party may file an appeal with the New Mexico Court of Appeals within 30 days after the date of the decision.  Appeals are decided based solely on the evidence and arguments presented at the administrative hearing.  All administrative tax hearings are hearings “of record,” which means that a tape recording or transcript is made of the proceedings.  This record is then used by the New Mexico Court of Appeals if either party decides to appeal from the hearing officer’s decision.

    Q. Where are delinquent property tax auctions held?

    Delinquent property tax auctions are held at the county seat (courthouse) or at a place the Department designates in the county where the property is located. The Property Tax Division strongly urges all potential bidders to inspect the property ahead of time and check the paper history on the chain of title before the auction. Because trespassing is not allowed, site inspections must be from a distance. All property is sold “as is” and is not guaranteed.

    Q. When does the Property Tax Division hold delinquent property tax sales?

    There is no set schedule for public auctions. They occur in each county as title research is completed, all other collection efforts are exhausted and as the Division moves forward in placing property back on the tax rolls. The Division does not hold sales in all 33 counties each year. For information about when a sale may occur in a given county that is not listed on our current sale schedule, please contact the Property Tax Division at (505) 827-0883 or check our website.

    Q. Where can I find copies of sale lists?

    Upon completion of all preliminary statutory requirements to properly offer delinquent property for sale, a list of eligible properties is available at the Property Tax Division office at the Wendell Chino Bldg, 1220 St. Francis Dr., 2nd Floor, Rm. 207, Santa Fe, NM 87505. The Property Tax Division does not mail sale lists. You can sign up to be notified of sales or any changes that occur in the Property Tax Delinquent Bureau. You can find copies of the sale lists through the county treasurer, the county assessor or you can check our website .

    Q. What determines the minimum bid on real property?

    The minimum bid is based on the total of taxes, penalty, interest and costs due. The owner’s interest in the real property is also taken into consideration.

    Q. How can a buyer bid on property offered at tax sales?

    Individuals who wish to bid on property register two hours before the start of the auction on the day of the sale. Registration closes promptly at the start of the sale. Bidding is on an oral basis with the property going to the highest bidder. Bidders must be physically present or represented by an agent. The agent must present a notarized authorization document to the Property Tax Division upon registration.

    Q. Does the Property Tax Division provide buyers with title information (deeds, mortgage, liens etc.) prior to a tax sale?

    The Property Tax Division does not furnish title information, maps or suggestions about the locations of properties being sold. The responsibility to inspect the property and review the chain of title belongs to the buyer prior to the sale. Buyers should know exactly what they are buying before the sale. The property is awarded to the highest bidder “as is.” There are no refunds, and all sales are final.
     

    Q. If a buyer purchases a property through a tax sale, are all other existing liens against that property extinguished at that time?

    A sale properly made under Section 7-38-67 NMSA 1978 constitutes full payment of all delinquent taxes, penalties and interest considered as a lien against the property. The sale extinguishes the tax lien only. No other liens are extinguished. The responsibility to inspect the property and review the chain of title belongs to the buyer prior to the sale.

    Q. Does New Mexico have a right of redemption for former owners?

    New Mexico has no right of redemption for former owners. It does offer a two-year limitation for the former owner to challenge the sale under Section 7-38-70 NMSA 1978. The only redemption period in New Mexico is a 120-day federal IRS redemption. The IRS has 120 days after the auction to buy the property from the successful bidder up to the amount purchased.

    Q. What types of payment are acceptable at public auction sales?

    All payments at public auctions must be in the form of a cashier's check, money order, personal check or company check. A letter of guarantee from the issuing bank must accompany personal and company checks at the time of registration. Letters of guarantee must state that the bank will guarantee payment up to a specific amount. Personal or company checks are unacceptable otherwise. There is reasonable time after the conclusion of the sale for parties to acquire a cashier's check or money order for the amount of their purchases.

    Q. What happens if a buyer does not pay for a piece of property?

    Any bidder who does not pay once the auction closes may not participate in any future property tax sales. In addition, the bidder is responsible for all costs, expenses, and attorney fees expended in the collection of uncollected bids.
     

    Q. Is property bought at a delinquent tax sale assessed and taxed on the amount of purchase?

     The purchase price of a property acquired at auction does not dictate its value. The county assessor has already determined a taxable value based on the appraisal analysis of similar properties in the area. Before buying at auction the prospective bidder should assess the value by consulting the county assessor’s office and talking to realtors and owners of property bordering the piece to be sold.

    Q. What type of deed does the Property Tax Division issue for property sold at tax sales?

     The state issues a tax deed equivalent to a quitclaim deed. The deed conveys all of the former owner's interest in the real property as of the date the state's lien for real property taxes arose. This deed is subject only to perfected interests in the real property that existed before the date of the property tax lien. New Mexico warrants no title to property you buy at public auction. It is sold “as is.” The deed issued by the Property Tax Division can be used as the basis to begin clearing the title through the court.

    Q. What is a perfected interest?

    Interest in real property is "perfected" when the deed or lien is recorded with the County Clerk's Office in the county where the property is located.

    Q. Which sections of the Taxation and Revenue Department Selected Laws and Regulations contain the property tax statutes?

     Sections 7-35-1 through 7-39-10 NMSA 1978 are the property tax statutes.

    Q. Where can I find copies of the property tax and motor vehicle statutes?

    You may purchase a copy from Conway Greene or you may contact the Tax Information and Policy Office at (505) 827-0908 or by e-mail at poffice@state.nm.us .  The statutes can also be accessed online.

    Q. Is there a mailing list to notify prospective buyers about upcoming sales?

    The Property Tax Division does not mail sale lists. You can sign up to be notified of sales or any changes that occur in the Property Tax Delinquent Bureau, or you can check our website. You can also contact the Property Tax Division at (505) 827-0883.

    Q. How does land used for agriculture qualify for a special method of valuation?

    Depending on whether the county assessor agrees, there must be a bona fide primary agricultural use of the land and the capacity to produce agricultural products. The property owner must initially apply for this classification. Refer to Section 7-36-20 NMSA 1978

    Q. What is the valuation basis of my commercial or non-residential assessment?

    As Section 7-36-16 NMSA 1978 requires, property is valued as “current and correct.”

    Q. What is the valuation basis of my residential assessment?

     If you bought your land in the prior year, or the property changed classification (from residential to non-residential use, for instance), or you made an improvement to the structure, then your assessment is limited to an increase of 1.03% or 1.061%, depending on the assessment cycle the assessor has chosen pursuant to Section 7-36-21.2 NMSA 1978. If the following limits do not apply to your property, it will be valued as current and correct as required by Section 7-36-16 NMSA 1978.

    This limitation on increases in value does not apply to:
     
    -      a residential property in the first tax year that it is valued for property taxation;
    -      any physical improvements made to the property during the year immediately prior to the tax year, or
    -      valuation of a residential property in any tax year in which a change of ownership of the property occurred in the prior year, or the use or zoning of the property has changed in the prior year.

    Q. What effect on valuation does the 65-and-older limitation have?

    If a qualifying applicant is 65 or older or is disabled, the value of the property cannot increase from the prior year. The applicant must file yearly and provide the assessor with proof of age, occupancy and income for the tax year for which application is made.

    Q. I do not agree with the valuation notice, denial of exemption or classification of property that I received from my county assessor. What can I do?

    The law, specifically, Section 7-38-24 NMSA 1978 entitles you to file a petition of protest with your county assessor within 30 days after you receive your valuation notice. If your disagreement is not resolved, you will be scheduled for a protest hearing before the County Valuation Protests Board.  The board usually decides protests within 180 days of the date that the protest was filed unless extended by a director’s order. A written order is issued within 30 days of the hearing unless extended by agreement of the board and the taxpayer.

    Q. I have filed a protest with my county assessor. What must I do to support my case?

    You may request an informal conference according to Section 7-38-24.D NMSA 1978 and 3.6.7.33.B.1,2,3 before the scheduled hearing date. At the informal conference you and the county exchange information each of you has to support value, classification or exemption. Information can be a current appraisal, purchase agreement or market analysis. If it is income-producing property, you would present your income and expense reports. Many times your concerns will be resolved during the informal conference. If not, you proceed to the Valuation Protest Hearing.

    Q. I have received the Valuation Protest Board's decision and am not in agreement. Can I appeal the decision?

    Yes, by law you have the right to appeal. File your appeal in District Court. The appellee (the assessor or commission of your county) must be named. File the appeal under the provisions of Section 12-8A-1 NMSA 1978 no later than 30 days from the date of decision.   

    Q. I have a manufactured home. In order to refinance it and the land it sits on, I was told by the finance company that I must deactivate the title. If this is so, what do I have to do?

    Regulation 3.6.5.33.D.1,2,3 Manufactured Homes – When Valued as Real Property addresses the property owner's request for the county assessor to value the unit as real property. To qualify, the owner must also own the land where the home is situated. Certain restrictions set by the Manufactured Housing Division must be met before approving the request, such as removing the tongue and axle. The title of the unit must be deactivated according to Regulation 18.19.3.16 NMAC of the Motor Vehicle Code before the change in valuation can occur.
     

    Q. When is the last day to file property tax reports?

    The deadline for reporting is on or before the last day of February of the tax year unless an extension is requested and approved by the division director. If the last day falls on a weekend, the deadline is on the next regularly-scheduled workday.

    Q. How much more time is allowed if the extension is approved?

    The extension is granted for an additional 30 days.

    Q. Can Central Assessed Bureau (CAB) forms be reproduced or generated from the computer?

    CAB forms and other industry-specific forms can be reproduced or computer-generated as long as they follow the same format as the original forms. You can also download these forms online

    Q. Are intangible assets taxable?

    Intangible assets are not taxable.

    Q. Are household effects subject to the personal property tax?

    No. The Property Tax Code generally exempts personal property unless it is used for the person's profession, business or occupation.

    Q. I own a small business. I use a computer and a few pieces of office furniture and equipment. They are my own personal items acquired mostly before the business was started. Must I report them to the county assessor and pay property taxes on them?

    If you are not taking a deduction for depreciation on your federal income tax on these items, you do not need to report or pay property tax on them even though you use them for your profession, business or occupation.

    Q. My business bought computers and other pieces of office equipment on January 2 of this year. Are they subject to tax this year?

    No. January 1 of the tax year is the "taxable situs" date. The assets should be reported the following year. “Situs” means the property is "…physically present in the state on the date when it is required to be valued for property taxation purposes…"  

    Q. My business reported all assets to the county assessor at the depreciated net book value at year end. The assessor ignored these values and used a different depreciation schedule, thus increasing the values. Is this legal?

    The assessor is mandated to use class life and established depreciation schedules. The net book value you calculated is for federal income tax. The assessor is not allowed to use your net book value, but the assessor should use your acquisition cost and date of acquisition to recalculate the value for property tax purposes.

    Q. Over the years my business has bought computer software. Some counties are telling me that software is exempt, while others tell me it is taxable. Who is right? What are the criteria to determine taxability?

    Computer software has been complex since it was first introduced. Computer software is a class of personal property. It is comprised of several different subclasses of personal property that can be divided by use, development, distribution, and relationship to hardware. Software includes custom software, canned software and embedded software.
     
    Because the valuation of software presents administrative burdens to both the assessing units and the taxpayers of New Mexico, treat the software classes as follows:
     
    -      Canned (off the shelf) software is subject to property tax. It is valued using a three-year life and straight-line depreciation [Internal Revenue Code, Section 167(f)(1).]
    -      If canned software is modified, only the canned portion is subject to tax.
    -      Any software that comes with the equipment (i.e. Windows, etc.) is taxed as part of the machinery or equipment. Usually the cost of the machinery and equipment includes the embedded software.
    -      Custom software that is customized for the company only and is subject to an exclusive license and greatly modified, is exempt from property taxation.

    Q. My federal income tax report is due on April 15. I bought various assets between April 15 and December 31 of last year, but I have not claimed a deduction for depreciation for federal income tax during the twelve months immediately proceeding the first day of the property tax year. The assets were located in my office in X County on the first day of the property tax year. Do I report them this year to the county assessor, or do I wait until next year, after I have reported them for depreciation for the first time?

    Report the assets this year. The assets are reportable for federal income tax in the current year. The fact that the reporting deadlines for property tax fall before reporting deadlines for federal income tax does not postpone the taxability by one year. This provision is in line with the IRS's position that "depreciation for tax purposes begins when an asset is placed in service and ends when it is retired from service." The IRS considers an asset placed in service "when it is in a condition or state of readiness and availability for its assigned function."

    Q. I have a DVD store business. The majority of my business is the renting out of DVDs and players. I also sell some DVDs occasionally. What percent good factors do I use for reporting property tax?

    This asset class calls for a class life of nine years, so you must depreciate the assets using Table 11 of the State Assessed Valuation Guideline.  Link to: ***Document: State Assessed Valuation Guideline.pdf

    Q. I purchased a piece of equipment for $25,000 and have taken the one-time Section 179 Internal Revenue Code deduction. Must I report the equipment to the county assessor?

    The equipment is subject to property taxation only in the first tax year after you take the federal deduction. If you purchased the piece in March, for example, then the equipment is subject to tax on January 1 of the following year and not thereafter. If the equipment is ten-year property , see

     

    Table 13 of the State Assessed Valuation Guideline. Link to: ***Document: State Assessed Valuation Guideline.pdf the assessor puts it on the tax rolls for the following tax year at 95.6% ($23,900) of the original cost. The taxable value is 1/3 or $7,967. Visit the IRS website at Link to: www.irs.gov.

     

    Q. What is the approved method for the valuation of taxable personal property?

    The "Special Method" is outlined in theProperty Tax Code,

    Section 7-36-33 NMSA 1978

    .  The method is a cost approach. The statute calls for using the "tangible property cost or " the "actual cost of acquisition or construction of property including additions, retirements, adjustments and transfers." Depreciation must be considered. Calculate depreciation using the straight-line method to compute the depreciation allowance over the useful life of the item of property. The useful life is the class life defined in Section 167 of the United States Internal Revenue Code of 1954. Click here to search US Tax Code.

     

    Q. I lease several items of personal property to others. Am I still subject to property tax?

    Yes. The owner of personal property used in a business and subject to federal income tax depreciation is also subject to ad valorem taxes in New Mexico. If your lease agreement passes the property tax along to the lessee, the lessee can report the assets directly. Agreements that require lessees to pay local taxes, where equitable title does not pass from lessor to lessee, are simply agreements between two parties (neither of which is the county assessor) that allow the lessor to pass the property taxes to the lessee. The agreement does not free the owner from his tax obligation to the county. The tax liability statutorily rests on the owner of the personal property. For administrative convenience we suggest that leased personal property be assessed separately from owned personal property; for example, an assessment for a leased Xerox Copying Machine should be:

     

     

    XXX Corporation, Owner

    YYY Store #12, Lessee

    C/O YYY, Inc.

    One Sureway Plaza

    Dallas, Texas 00000-0000

     

    An assessment like this identifies all parties without further investigation. In all cases where the assessment is made against the lessee, keep on file a copy of the lease agreement showing the make, model, serial number and description of each item of leased personal property. Additionally, note the location of the leased equipment.

    Q. What is situs?

    Situs in regard to personal property is property "…physically present in the state on the date when it is required to be valued for property taxation purposes…" That date is, in almost all cases, January 1 of the tax year. If personal property, including livestock and construction equipment, is present in the taxing jurisdiction on January 1 of the tax year, it is subject to property taxation. Livestock and construction equipment, however, are subject to yet another date. If livestock or construction equipment is present in a New Mexico taxing jurisdiction for more than 20 days after January 1, then the livestock or construction equipment is valued for property taxation as of the first day of the month after the month in which they spent the 20 days in the state. Use a basic allocation formula that prorates value according to the amount of time that livestock or construction equipment is in the state and subject to valuation for property taxation.

     

    Q. Who is responsible for property taxes when a mobile home owner rents the property or the lot?

    The owner of the mobile home is responsible for property taxes on the mobile home. The owner of the real property where the mobile home is situated is responsible for property taxes on the land. Payment of the property taxes on the land is ultimately the responsibility of the landowner.

    Q. When is a mobile home taxed as a permanent structure?

    A manufactured home may be classified as a permanent structure by the assessor when:

    - The owner of a manufactured home has requested the mobile home to be taxed as real property;

     

     

    -  The tongue and axle have been removed from the manufactured home, and the manufactured home has been affixed to a permanent foundation as required by Regulation 3.6.5.33.D.1,2,3 Manufactured Homes – When Valued as Real Property

    - The owner of the manufactured home holds title to the home and the real estate to which the manufactured home is affixed. Title must have been issued according to the provisions of the Motor Vehicle Code and deactivated according to Regulation 18.19.3.16 NMAC  The owner must provide evidence of the deactivation to the county assessor.

     

     

     

     

     

    Q. What must I do if I wish to move my mobile home to another location?

    Section 66-7-413 NMSA 1978 requires a permit from the Motor Vehicle Division before relocating the vehicle. Before a permit can be issued, however, the owner must obtain a certificate from the County Treasurer or Assessor of the county in which the manufactured home is located showing that either:

     

     

    -

     

    All property taxes due or to become due on the manufactured home for the current tax year or any past tax years have been paid, or

     

    -

     

    No liability for property taxes on the manufactured home exists for the current year or any past tax years.

     

     

    You can find more information in Subsections F-G of

     

    Section 66-7-413 NMSA 1978 of the Motor Vehicle Code.

     

     

    Q. What must I do to change the name on the title or transfer the title on my mobile home?

    When a title transfer or change of name on a title occurs, the Motor Vehicle Division issues the new title. As per

    Section 66-3-110 NMSA 1978

    , the Motor Vehicle Division issues a new title under the following guidelines:

     

     

    -

     

    The Motor Vehicle Division needs a properly endorsed certificate of title, current registration evidence, proper application for registration or transfer of registration, and the required fee.

     

    -

     

    The Motor Vehicle Division requires, in addition to conditions set out above, a certificate from the County Treasurer or Assessor of the county in which the manufactured home is located showing that either:

     

     

    -

     

    All property taxes due or to become due on the manufactured home for the current tax year or any past tax years have been paid, or

     

    -

     

    No liability for property taxes on the manufactured home exists for the current year or any past tax years.

     

    Q. Why are County Treasurers selling mobile homes?

    44. Why are County Treasurers selling mobile homes?

     

    To collect delinquent taxes, the County Treasurer is authorized to seize a mobile home and sell it for taxes under authority of a demand warrant according to

    Section 7-38-53 NMSA 1978

    of the Property Tax Code.

    Q. How many years of delinquent taxes must be owed before the county treasurer can sell a mobile home?

    Once the property taxes on a mobile home has become 30 days delinquent, the county treasurer may seize a mobile home and sell it for taxes under authority of a demand warrant.

    Q. What gives the County Treasurer's Office the authority to cross into private property to serve a demand warrant for the delinquent taxes when the property owner is not home?

    Under

     

    Section 7-38-53 NMSA 1978 of the Property Tax Code, a county treasurer has authority to collect delinquent property taxes on a mobile home (a/k/a personal property) by asserting a claim against the owner's personal property for which taxes are delinquent. To properly assert a claim, the county treasurer or an employee of the treasurer’s office, or the county sheriff must serve and post the demand warrant on the mobile home.

     

    Q. If I did not receive a tax bill, how do I know that I owe taxes on my mobile home?

    The State of New Mexico is a self rendering state. According to

     

    Section 7-38-47 NMSA 1978, property taxes are a personal obligation of the property owner. The owner is still responsible for finding out about the tax and paying it. A personal judgment may be rendered against the owner for delinquent property taxes and any penalty and interest on the delinquent taxes. The sale or transfer of property after its valuation date does not free the former owner of personal liability for the property taxes imposed for that tax year.

     

     

    Q. What determines the amount of the minimum bid on a mobile home?

    The minimum bid is based on the amount of taxes, penalty, interest and costs due. The owner’s interest in the mobile home is also taken into consideration.

     

    Q. Where are the delinquent mobile home tax auctions held?

    Delinquent mobile home tax auctions are held at the county seat (courthouse) or another place designated by the county treasurer's offices in counties where the properties are located.

    Q. When does the county treasurer's office conduct delinquent mobile home tax sales?

    50. When does the county treasurer's office conduct delinquent mobile home tax sales?

    <

     

    file:///\\Trdmvddev\wwwroot\Tax\ptd\DPTB%20Skeleton%20Web%20Page\ptdatrea.htm>

     

    There is no set schedule for public auctions; public auctions occur as all research is completed and all other collection efforts are exhausted in each county. For information on when a sale may take place in a given county, please contact the specific county treasurer. <

     

    file:///\\Trdmvddev\wwwroot\Tax\ptd\DPTB%20Skeleton%20Web%20Page\ptdatrea.htm>

     

    Q. Where can I find copies of sales lists?

    You can find copies of the sale lists through the county treasurer's office in each county.

     

    <file:///\\Trdmvddev\wwwroot\Tax\ptd\DPTB%20Skeleton%20Web%20Page\ptdatrea.htm>

     

     

    Q. How can an interested purchaser bid on mobile homes offered at tax sales?

    Auction registration for individuals who wish to bid on property is usually scheduled two hours before the start of the auction on the day of the auction. Registration closes promptly at the start of the sale. Bidding is on an oral basis and the property is awarded to the highest bidder. Bidders must be physically present or represented by an agent. The agent must present a notarized authorization document to the Property Tax Division upon registration.

    Q. Does the county treasurer's office provide interested purchasers with title information (deeds, mortgage, liens etc.) before a tax sale of a mobile home?

    The county treasurer's office does not furnish title information or maps. It is the prospective buyer’s responsibility to do all title research before the sale. All research should be done at the county offices and the Motor Vehicle Division. Property is sold to the highest bidder and is sold "as is." Neither the Property Tax Division nor the counties offer refunds. All sales are final.

    Q. Is there a right of redemption for former owners of mobile homes?

    The only redemption period that exists is a 120-day federal IRS redemption. IRS has up to 120 days after the auction to purchase the property from the successful auction purchaser to the amount purchased.

    Q. What types of payment are accepted at public auction sales of mobile homes?

    All payments at public auction must be in the form of a cashier's check, money order, personal check or company check. A letter of guarantee from the issuing bank must accompany personal and company checks. All letters of guarantee must state that the bank will guarantee payment up to a specific amount. The buyer must present the letter of credit at the time of registration. Personal or company checks will not be accepted without a proper letter. There will be reasonable time after the conclusion of the sale for parties to purchase cashier's checks or money orders for the amount of their bid(s).


    Property Tax Appraisal Bureau

    Q. How does land used for agriculture qualify for a special method of valuation?

    Depending on whether the county assessor agrees, there must be a bona fide primary agricultural use of the land and the capacity to produce agricultural products. The property owner must initially apply for this classification. Refer to Section7-36-20 NMSA

    Q. What is the valuation basis of my commercial or non-residential assessment?

    As Section 7-36-16 NMSA 1978 requires property is valued as “current and correct.”

    Q. What is the valuation basis of my residential assessment?

    If you bought your land in the prior year, or the property changed classification (from residential to non-residential use, for instance), or you made an improvement to the structure, then your assessment is limited to an increase of 1.03% or 1.061%, depending on the assessment cycle the assessor has chosen as stated in Section 7-36-21.2 NMSA 1978. If the following limits do not apply to your property, it will be valued as current and correct as required by Section 7-36-16 NMSA 1978. 

    This limitation on increases in value does not apply to:

    − a residential property in the first tax year that it is valued for property taxation;
    − any physical improvements made to the property during the year immediately prior to the tax year, or
    − valuation of a residential property in any tax year in which a change of ownership of the property occurred in the prior year, or the use or zoning of the property has changed in the prior year.

    Q. What effect on valuation does the 65-and-older limitation have?

    If a qualifying applicant is 65 or older, or is disabled, the value of the property cannot increase from the prior year. The applicant must file yearly and provide the assessor with proof of age, occupancy and income for the tax year for which application is made.

    Q. I do not agree with the valuation notice, denial of exemption or classification of property that I received from my county assessor. What can I do?

    The law as stated in Section 7-38-24 NMSA 1978  entitles you to file a petition of protest with your county assessor within 30 days after you receive your valuation notice. If your disagreement is not resolved, you will be scheduled for a protest hearing before the County Valuation Protests Board.  The board usually decides protests within 180 days of the date that the protest was filed unless extended by a director’s order. A written order is issued within 30 days of the hearing unless extended by agreement of the board and the taxpayer. 
     

    Q. I have filed a protest with my county assessor. What must I do to support my case?

     You may request an informal conference Section 7-38-24(D) NMSA 1978  and regulation 3.6.7.33.B.1,2,3 NMAC before the scheduled hearing date. At the informal conference you and the county exchange information each of you has to support value, classification or exemption. Information can be a current appraisal, purchase agreement or market analysis. If it is income-producing property, you would present your income and expense reports. Many times your concerns will be resolved during the informal conference. If not, you proceed to the valuation protest hearing.

    Q. I have received the Valuation Protest Board's decision and am not in agreement. Can I appeal the decision?

    Yes, by law you have the right to appeal. File your appeal in District Court. The appellee (the assessor or commission of your county) must be named. File the appeal under the provisions of Section 12-8A-1 NMSA 1978 no later than 30 days from the date of decision.

    Q. I have a manufactured home. In order to refinance it and the land it sits on, I was told by the finance company that I must deactivate the title. If this is so, what do I have to do?

    Regulation 3.6.5.33.D.1,2,3 Manufactured Homes – When Valued as Real Property  addresses the property owner's request for the county assessor to value the unit as real property. To qualify, the owner must also own the land where the home is situated. Certain restrictions set by the Manufactured Housing Division must be met before approving the request, such as removing the tongue and axle. The title of the unit must be deactivated according to Regulation 18.19.3.16 NMAC of the Motor Vehicle Code before the change in valuation can occur.

    Q. Who is responsible for property taxes when a mobile home owner rents the property or the lot?

    The owner of the mobile home is responsible for property taxes on the mobile home. The owner of the real property where the mobile home is situated is responsible for property taxes on the land. Payment of the property taxes on the land is ultimately the responsibility of the landowner.

    Q. When is a mobile home taxed as a permanent structure?

    A manufactured home may be classified as a permanent structure by the assessor when:
    − The owner of a manufactured home has requested the mobile home to be taxed as real property;
    − The tongue and axle have been removed from the manufactured home, and the manufactured home has been affixed to a permanent foundation as required by Regulation 3.6.5.33.D.1,2,3 Manufactured Homes – When Valued as Real Property − The owner of the manufactured home holds title to the home and the real estate to which the manufactured home is affixed. Title must have been issued according to the provisions of the Motor Vehicle Code and deactivated according to Regulation 18.19.3.16 NMAC The owner must provide evidence of the deactivation to the county assessor.

    What must I do if I wish to move my mobile home to another location?

    Section 66-7-413 NMSA 1978  requires a permit from the Motor Vehicle Division before relocating the vehicle. Before a permit can be issued, however, the owner must obtain a certificate from the county treasurer or assessor of the county in which the manufactured home is located showing that either: − All property taxes due or to become due on the manufactured home for the current tax year or any past tax years have been paid, or
    − No liability for property taxes on the manufactured home exists for the current year or any past tax years.

    You can find more information in Subsections F and G of Section 66-7-413 NMSA 1978.

    Q. What must I do to change the name on the title or transfer the title on my mobile home?

    When a title transfer or change of name on a title occurs, the Motor Vehicle Division issues the new title.  As per Section 66-3-110 NMSA 1978,  the Motor Vehicle Division issues a new title under the following guidelines:
     
    -      The Motor Vehicle Division needs a properly endorsed certificate of title, current registration evidence, proper application for registration or transfer of registration, and the required fee.
    -     The Motor Vehicle Division requires, in addition to conditions set out above, a certificate from the County Treasurer or Assessor of the county in which the manufactured home is located showing that either:
     
    -      All property taxes due or to become due on the manufactured home for the current tax year or any past tax years have been paid, or
    -      No liability for property taxes on the manufactured home exists for the current year or any past tax years.

    Why are County Treasurers selling mobile homes?

    To collect delinquent taxes, the County Treasurer is authorized seize a mobile home and sell it for taxes under authority of a demand warrant according to Section 7-38-53 NMSA 1978 of the Property Tax Code.

    Q. How many years of delinquent taxes must be owed before the county treasurer can sell a mobile home?

    Once the property taxes on a mobile home has become 30 days delinquent, the county treasurer may seize a mobile home and sell it for taxes under authority of a demand warrant.

    Q. What gives the County Treasurer's Office the authority to cross into private property to serve a demand warrant for the delinquent taxes when the property owner is not home?

    Under Section 7-38-53 NMSA 1978 of the Property Tax Code,  a county treasurer has authority to collect delinquent property taxes on a mobile home (a/k/a personal property) by asserting a claim against the owner's personal property for which taxes are delinquent. To properly assert a claim, the county treasurer or an employee of the treasurer’s office, or the county sheriff must serve and post the demand warrant on the mobile home.

    Q. If I did not receive a tax bill, how do I know that I owe taxes on my mobile home?

    The State of New Mexico is a self rendering state. According to Section 7-38-47 NMSA 1978 , property taxes are a personal obligation of the property owner. The owner is still responsible for finding out about the tax and paying it. A personal judgment may be rendered against the owner for delinquent property taxes and any penalty and interest on the delinquent taxes. The sale or transfer of property after its valuation date does not free the former owner of personal liability for the property taxes imposed for that tax year.

    Q. What determines the amount of the minimum bid on a mobile home?

    The minimum bid is based on the amount of taxes, penalty, interest and costs due. The owner’s interest in the mobile home is also taken into consideration.

    Q. Where are the delinquent mobile home tax auctions held?

    Delinquent mobile home tax auctions are held at the county seat (courthouse) or another place designated by the county treasurer's offices in counties where the properties are located.

    Q. When does the county treasurer's office conduct delinquent mobile home tax sales?

    There is no set schedule for public auctions; public auctions occur as all research is completed and all other collection efforts are exhausted in each county. For information on when a sale may take place in a given county, please contact the specific county treasurer.

    20. Where can I find copies of sale lists?

    You can find copies of the sale lists through the county treasurer's office in each county.

    Q. How can an interested purchaser bid on mobile homes offered at tax sales?

    Auction registration for individuals who wish to bid on property is usually scheduled two hours before the start of the auction on the day of the auction. Registration closes promptly at the start of the sale. Bidding is on an oral basis and the property is awarded to the highest bidder. Bidders must be physically present or represented by an agent. The agent must present a notarized authorization document to the Property Tax Division upon registration.

    Q. Does the county treasurer's office provide interested purchasers with title information (deeds, mortgage, liens etc.) before a tax sale?

    The county treasurer's office does not furnish title information or maps. It is the prospective buyer’s responsibility to do all title research before the sale. All research should be done at the county offices and the Motor Vehicle Division. Property is sold to the highest bidder and is sold “as is.” Neither the Property Tax Division nor the counties offer refunds. All sales are final.

    Q. Is there a right of redemption for former owners?

    The only redemption period that exists is a 120-day federal IRS redemption. IRS has up to 120 days after the auction to purchase the property from the successful auction purchaser to the amount purchased.All payments at public auction must be in the form of a cashier's check, money order, personal check or company check. A letter of guarantee from the issuing bank must accompany personal and company checks. All letters of guarantee must state that the bank will guarantee payment up to a specific amount. The buyer must present the letter of credit at the time of registration. Personal or company checks will not be accepted without a proper letter. There will be reasonable time after the conclusion of the sale for parties to purchase cashier's checks or money orders for the amount of their bid(s).

    Q. Where can I find copies of the Motor Vehicle Code or the Property Tax Code?

    You may purchase a copy from Conway Greene or you may contact the Tax Information and Policy Office at (505) 827-0908 or by e-mail at poffice@state.nm.us. The statutes can also be accessed online.


    Reporting Tax Fraud

    Q. What is tax fraud?

    Fraud is a deception deliberately practiced for unfair or unlawful gain. As it relates to taxes, it is simply “cheating” by intentionally paying less tax than is legally due. The main difference between an honest mistake and tax fraud is the element of criminal intent.

    Q. How does tax fraud affect me?

    Since dishonest people are not paying their fair share, there is no “level playing field” for businesses or consumers. This can sometimes lead to higher prices, possible tax increases, and inadequately funded school systems, government infrastructure and other government programs. The added burden of covering these shortages falls on honest taxpayers and the taxpaying public.

    Q. Which programs are affected by tax fraud?

    The New Mexico Taxation and Revenue Department (TRD) administers several tax programs, all of which may be affected. These include:- Personal Income Tax;- Gross Receipts Tax, also known as CRS (Combined Reporting System);- Corporate Income Tax;- Oil and Gas Tax, and- Cigarette Tax.

    Q. Who reports tax fraud?

    The taxpaying public, private industry and other government agencies including federal, state and local law enforcement are some of the eyes and ears that report suspected tax fraud to the Tax Fraud Investigations Division (TFID).

    Q. May I remain anonymous if I call to report someone for tax fraud?

    Yes, you may remain anonymous; you do not have to provide your name, phone number or any identifying information.

    Q. How do I report someone whom I believe is committing tax fraud?

    There are three ways to report tax fraud:

    - Call the 24-Hour New Mexico Tax Fraud Hot Line: 1-866-457-6789.
    - Send an e-mail to tax.fraud@state.nm.us 
    - Download the Fraud Information Report Form mail or fax it to:

    New Mexico Taxation and Revenue Department
    Tax Fraud Investigations Division
    P.O. Box 8487
    Albuquerque, NM 87198

    Fax Number: 505-222-6634

    For more information on submitting a fraud report, click Guidelines for Reporting Tax Fraud 

    Q. If I provide you my name and telephone number, can I receive updates on the investigation?

    No, the confidentiality statutes of the Tax Administration Act preclude TRD from disclosing any taxpayer or taxpayer-related information.

    Q. Does the State of New Mexico pay rewards for supplying information that leads to the successful investigation and/or prosecution of tax fraud?

    No, there is no provision in the New Mexico State Government Statutes or Rules or Regulations to allow rewards for tips and other information about tax fraud.Although there is no monetary reward for this specific purpose, if you supply the information, you can receive a great deal of satisfaction from knowing that you helped ensure that all taxpayers in New Mexico pay their fair share of taxes and knowing that those who don’t will be held accountable.


    Resource Excise Tax

    Q. What is the purpose of the resource excise tax?

    The resources excise tax (Chapter 7, Article 25) provides revenue for public purposes by levying a tax on the privilege of severing and processing natural resources within New Mexico.

    Q. In general, on which natural resources is the resources excise tax imposed?

    Generally, the resources excise tax is imposed on: timber and any timber product and any metalliferous or non-metalliferous mineral product, combination, or compound severed in New Mexico excepting oil, natural gas, liquid hydrocarbons, and carbon dioxide.

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

    If you file the resources excise tax, you must file a severance tax report. If the taxpayer is not the owner of the natural resource, then the lessee must pay the tax.

    Q. What is the definition of “processing’?

    “Processing” means smelting, leaching, refining, reducing, compounding or otherwise preparing for sale or commercial use any natural resource in such a way that its character or condition is materially changed in mills or plants located in New Mexico.

    Q. Can you explain the three sections of the resources excise tax report, RPD-41193?

    The three sections of the resources excise tax report are:
    -      Section A:  “Resources Tax” - complete this section if the entity is the owner of the land where the extracting or felling is taking place;

    -      Section B:  “Processors Tax”- applies if the entity owns the land and is processing hard minerals as described in question 4 above; and
     
    -      Section C:  “Services Tax” - applies to the entity severing or processing natural resources if it is not the owner of the natural resources. The service charge is the total amount of money or the reasonable value of other consideration received for severing or processing any natural resource.  

    Q. What are the resources tax rates?

    Resources tax rates are:
    - For all natural resources except potash and molybdenum, the rate is three-fourths of one percent (3/4% or 0.75).

    - The rate for potash is one-half of one percent (1/2% or 0.5).

    - The rate for molybdenum is one-eighth of one percent (1/8% or 0.125).

    Q. What are the processors tax rates?

    Processors tax rates are:
    - For all natural resources except timber, potash and molybdenum, the rate is three-fourths of one percent (3/4% or 0.75).

    - The rate for timber is three eighths of one percent (3/8% or 0.375).

    - The rate for potash is one-eighth of one percent (1/8% or 0.125).

    - The rate for molybdenum is one-eighth of one percent (1/8% or 0.125).

    Q. What is the service tax rate?

    The service tax rate is the same as the resources tax rate or the processors tax rate, depending on the job performed.

    Q. What is the tax-due date for the resources excise tax?

    The taxes are due on or before the 25th day of the month following the month in which the first of the following occurs: sale, transportation out of New Mexico, or consumption, unless otherwise allowed by the Taxation and Revenue Department.


    Severance Tax - Non Oil and Gas

    Q. What is the purpose of the severance tax?

    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?

    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?

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

    Q. What is the definition of “severing”?

    “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?

    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.

    Q. Are there any tax credits related to this tax program?

    A taxpayer may qualify for a credit against current coal severance taxes if the coal is severed from Indian tribal land or if a tax is imposed on the privilege of severing coal from Indian tribal land. This credit is called the Intergovernmental Coal Severance Tax Credit. See Section 7-29C-2 NMSA 1978 .

    Q. How is the intergovernmental tax credit recognized?

    The tax credit is calculated monthly by the mine. It is 75% of the lesser of either the aggregate amount of coal severance, privilege, ad valorem or similar tax in effect on March 1, 1995, that is imposed by the Indian nation, tribe or pueblo, or the aggregate amount of coal severance tax and surtax tax due the state.

    Q. What is the tax-due date for the severance tax?

    Pay the tax on or before the 25th day of the month following the month in which the taxable event occurs unless otherwise allowed by the Taxation and Revenue Department.


    State Assessed Property Tax

    Q. What is situs?

    Situs in regard to personal property is property "…physically present in the state on the date when it is required to be valued for property taxation purposes…"  That date is, in almost all cases, January 1 of the tax year. If personal property, including livestock and construction equipment, is present in the taxing jurisdiction on January 1 of the tax year, it is subject to property taxation. Livestock and construction equipment, however, are subject to yet another date. If livestock or construction equipment is present in a New Mexico taxing jurisdiction for more than 20 days after January 1, then the livestock or construction equipment is valued for property taxation as of the first day of the month after the month in which they spent the 20 days in the state. Use a basic allocation formula that prorates value according to the amount of time that livestock or construction equipment is in the state and subject to valuation for property taxation.

    Q. When is the last day to file property tax reports?

    The deadline for reporting is on or before the last day of February of the tax year unless an extension is requested and approved by the division director. If the last day falls on a weekend, the deadline is on the next regularly-scheduled workday.

    Q. How much more time is allowed if the extension is approved?

    The extension is granted for an additional 30 days.

    Q. Can Central Assessed Bureau (CAB) forms be reproduced or generated from the computer?

    CAB forms and other industry-specific forms can be reproduced or computer-generated as long as they follow the same format as the original forms. You can also download theseforms online .

    Q. Are intangible assets taxable?

    Intangible assets are not taxable.

    Q. Are household effects subject to the personal property tax?

    No. The Property Tax Code generally exempts personal property unless it is used for the person's profession, business or occupation.

    Q. I own a small business. I use a computer and a few pieces of office furniture and equipment. They are my own personal items acquired mostly before the business was started. Must I report them to the county assessor and pay property taxes on them?

    If you are not taking a deduction for depreciation on your federal income tax on these items, you do not need to report or pay property tax on them even though you use them for your profession, business or occupation.

    Q. My business bought computers and other pieces of office equipment on January 2 of this year. Are they subject to tax this year?

    No. January 1 of the tax year is the "taxable situs" date. The assets should be reported the following year. “Situs” means the property is "…physically present in the state on the date when it is required to be valued for property taxation purposes…" 

    Q. My business reported all assets to the county assessor at the depreciated net book value at year end. The assessor ignored these values and used a different depreciation schedule, thus increasing the values. Is this legal?

    The assessor is mandated to use class life and established depreciation schedules. The net book value you calculated is for federal income tax. The assessor is not allowed to use your net book value, but the assessor should use your acquisition cost and date of acquisition to recalculate the value for property tax purposes.

    Q. Over the years my business has bought computer software. Some counties are telling me that software is exempt, while others tell me it is taxable. Who is right? What are the criteria to determine taxability?

    Computer software has been complex since it was first introduced. Computer software is a class of personal property. It is comprised of several different subclasses of personal property that can be divided by use, development, distribution, and relationship to hardware. Software includes custom software, canned software and embedded software.

    Because the valuation of software presents administrative burden to both assessing units and the taxpayers of New Mexico, treat the software classes as follows:

    • Canned (off the shelf) software is subject to property tax. It is valued using a three-year life and straight-line depreciation [Internal Revenue Code, Section 167(f)(1).]
    • If canned software is modified, only the canned portion is subject to tax.
    • Any software that comes with the equipment (i.e. Windows, etc.) is taxed as part of the machinery or equipment. Usually the cost of the machinery and equipment includes the embedded software.
    • Custom software that is customized for the company only and is subject to an exclusive license and greatly modified, is exempt from property taxation.

    Q. My federal income tax report is due on April Q. I bought various assets between April 15 and December 31 of last year, but I have not claimed a deduction for depreciation for federal income tax during the twelve months immediately proceeding the fi

    Report the assets this year. The assets are reportable for federal income tax in the current year. The fact that the reporting deadlines for property tax fall before reporting deadlines for federal income tax does not postpone the taxability by one year. This provision is in line with the IRS's position that "depreciation for tax purposes begins when an asset is placed in service and ends when it is retired from service." The IRS considers an asset placed in service "when it is in a condition or state of readiness and availability for its assigned function."

    Q. I have a DVD store business. The majority of my business is the renting out of DVDs and players. I also sell some DVDs occasionally. What percent good factors do I use for reporting property tax?

    This asset class calls for a class life of nine years, so you must depreciate the assets using Table 11 of the State Assessed Valuation Guideline.  Link to: ***Document: State Assessed Valuation Guideline.pdf

    Q. I purchased a piece of equipment for $25,000 and have taken the one-time Section 179 Internal Revenue Code deduction. Must I report the equipment to the county assessor?

    The equipment is subject to property taxation only in the first tax year after you take the federal deduction. If you purchased the piece in March, for example, then the equipment is subject to tax on January 1 of the following year and not thereafter. If the equipment is ten-year property , see Table 13 of the State Assessed Valuation Guideline.  Link to: ***Document: State Assessed Valuation Guideline.pdf the assessor puts it on the tax rolls for the following tax year at 95.6% ($23,900) of the original cost. The taxable value is 1/3 or $7,967. Visit the IRS website at Link to: www.irs.gov.

    Q. What is the approved method for the valuation of taxable personal property?

    The "Special Method" is outlined in the Property Tax Code, Section 7-36-33 NMSA 1978  The method is a cost approach. The statute calls for using the "tangible property cost" or the “actual cost of acquisition or construction of property including additions, retirements, adjustments and transfers." Depreciation must be considered. Calculate depreciation using the straight-line method to compute the depreciation allowance over the useful life of the item of property. The useful life is the class life defined in Section 167 of the United States Internal Revenue Code of 1954.

    Q. I lease several items of personal property to others. Am I still subject to property tax?

    Yes. The owner of personal property used in a business and subject to federal income tax depreciation is also subject to ad valorem taxes in New Mexico. If your lease agreement passes the property tax along to the lessee, the lessee can report the assets directly. Agreements that require lessees to pay local taxes, where equitable title does not pass from lessor to lessee, are simply agreements between two parties (neither of which is the county assessor) that allow the lessor to pass the property taxes to the lessee. The agreement does not free the owner from his tax obligation to the county. The tax liability statutorily rests on the owner of the personal property. For administrative convenience we suggest that leased personal property be assessed separately from owned personal property; for example, an assessment for a leased Xerox Copying Machine should be:

    XXX Corporation, Owner
    YYY Store #12, Lessee
    C/O YYY, Inc.
    One Sureway Plaza
    Dallas, Texas  00000-0000
     
    An assessment like this identifies all parties without further investigation. In all cases where the assessment is made against the lessee, keep on file a copy of the lease agreement showing the make, model, serial number and description of each item of leased personal property. Additionally, note the location of the leased equipment.


    Tax Amnesty

    Q. What if I didn’t apply by 9/30/10?

    Amnesty applications will no longer be accepted after 9/30/10. If your application is received by the Department after 9/30/10 it will be denied.

    The Department considers an application to be received if by 9/30/10 they are postmarked, scanned and emailed, hand delivered, faxed, or dropped in an official TRD receptacle box outside a TRD district office and so long as there is a signed agreement with the application.

    Q. I tried to send my application before the deadline but my fax was rejected/my email got sent back. What do I do?

    Please retain a copy of the dated rejection/error message you received when you attempted to submit your application and call us at 1-888-NM-TAX-RX (1-888-66-829-79).

    Q. Can I file an extension for amnesty?

    No. The amnesty application and agreement must be postmarked or otherwise received (see above) no later than September 30, 2010, or we must deny your amnesty application.

    Q. Can I protest the denial of my amnesty application?

    Yes. If you submit an application for amnesty and we deny you, you can file a formal protest by filling out Formal Protest Form (Form ACD- 31094). You may download Form ACD-31094.

    Q. What if I didn’t apply by the deadline and I still have unreported taxes?

    If you still have unreported taxes but missed the amnesty application deadline you may still apply for the Managed Audit program. 

    The Managed Audit Program allows taxpayers to come into compliance with most taxes and fees administered by the Taxation and Revenue Department. 

    For information about the Managed Audit program go to: http://www.tax.newmexico.gov/Individuals/Pages/Managed-Audits.aspx.

    Applications for the Managed Audit program can be picked up at any district office or by calling the Managed Audit Hotline at (505) 841-6216.

    Q. I submitted my application weeks ago but I still haven’t heard if I’ve been accepted. What do I do?

    Please allow up to 60 days after you submit your application for the Department to notify you as to whether you have been approved or disqualified. If you have not been contacted at that time please call 1-888-NM-TAX-RX (1-888-66-829-79).

    Q. What happens once I submit my application by the deadline?

    • The Department will review it and notify you whether you are approved or disqualified. Please allow 60 days for us to process your application.
    • If approved, we will send you a notice with the contact information of the Department employee assigned to your case. If disqualified, we will send you a formal disqualification notice.
    • The approval notice will also indicate a date when you must provide all information, records and documents. No extensions to this deadline will be allowed.
    • After all information, records and documents are received, the Department will create the assessment.
    • From the date of assessment, you have 180 calendar days to pay in full or incur interest.

    Q. What is the deadline for providing information or returns under the amnesty program?

    After your acceptance into the amnesty program you have 60 calendar days from the start date of the amnesty agreement to send in any NTTCs (Non-Taxable Transaction Certificates) needed to substantiate deductions for the gross receipts tax program; all other necessary returns or records must be received within 90 calendar days from the start date of the amnesty agreement.

    Q. What is the “start date” of the amnesty agreement?

    The “start date” is ten calendar days after the Department signs the agreement. The start date is also indicated on the approval letter you will receive if accepted into the amnesty program.

    Q. What are my payment options?

    You may include payment with your agreement if you wish or submit a payment at any time during the review process to the Department employee assigned to your review.

    To make an electronic payment, go to www.https://efile.state.nm.us/uls2/Logon.aspx. Please note: when making electronic payments you must direct your payment to the last period of the amnesty agreement and select payment type “amnesty”.

    To make a credit card payment where available, call (505) 841-6352 in Albuquerque or 1-800-285-2996 toll-free.

    To mail a payment, please submit your check to the following address:
    NM Taxation and Revenue-Amnesty
    PO Box 2129
    Santa Fe, NM 87504

    Q. Will I be charged a convenience fee if I use my credit card?

    Yes. If you choose to make a credit card payment, there is a convenience fee of 2.49% charged by the third-party credit card vendor. The total charge, including the convenience fee and amnesty payment, appears on your credit card statement as a single charge.

    Q. What information should I include on my check?

    Please write “AMNESTY” on the memo line of any check you send. Please also write on your check the tax ID number, tax program, and the date of the last period included in the amnesty. For example, if you received amnesty for 2006-2008 personal income taxes, the last period would be 12/31/08. If you received amnesty for 1/06-12/08 gross receipts taxes, the last period would be 12/31/08. Please submit a separate check for each tax program for which you received amnesty. This indicates that you would like your payment applied to the amnesty assessment.

    Q. What happens if I have an existing liability and I don’t indicate where to apply my payment?

    We will apply unlabeled payments to your oldest outstanding tax liability. In the case of taxpayers who have liabilities that predate amnesty, unlabeled payments are first applied to pre-amnesty debt.

    Q. If I am due a refund of tax based on a tax return I have filed but still have a balance due on my amnesty agreement, will I receive the refund?

    No. Section 7-1-29(C) NMSA 1978 says the Department may offset against any tax due as a result of amnesty any amount of tax to be refunded to the taxpayer.

    Q. Do I need to submit separate checks for each type of tax?

    Yes. In addition, please list the following on each check:  “AMNESTY”, the tax identification number, the tax program, and the last period included in your amnesty agreement.

    Q. What if I can’t pay right now?

    The amnesty program allows a 180-calendar-day grace period from assessment for payment. If the resulting liability is paid in full within 180 calendar days of assessment, no interest is due.

    Q. Following the amnesty period, what happens to taxpayers who still have not registered and/or paid their taxes?

    The Department pursues individuals and businesses that don’t pay their fair share of taxes. 

    Please note that these taxpayers could voluntarily come forward after the amnesty period is over and apply for a Managed Audit.  If taxpayers do not voluntarily come forward, they may be selected for audit by the department.

    Q. What if I report back taxes during amnesty but later determine I reported the wrong amount?

    If you over reported your taxes, you have waived your right to request a refund under the terms of the Amnesty Agreement. If you underreported your taxes, you may apply for a regular Managed Audit to report additional taxes.

    Q. If I file for amnesty can the resulting assessment be protested?

    No. You waive your right to protest the assessment by signing the Amnesty Agreement.

    Q. What if I still have a question about the Amnesty Program?

    You may email questions to: tax.amnesty.questions@state.nm.us or call 1-888-NM-TAX-RX (1-888-66-829-79).


    Telecommunications Relay Service Surcharge

    Q. How often must Telecommunications Relay Service Surcharge (TRS) returns be filed?

    File returns monthly even if no tax is due. The TRS return is due on or before the 25th day of the month following the close of the calendar report month.

    Q. What form is used when paying the telecommunications relay service surcharge?

    Q. If I overpaid, how do I obtain a refund?

    Complete a corrected Form RPD-41116, Telecommunications Relay Service Surcharge Return and Form RPD-41071, Application for Tax Refund , and send them to the address on the TRS form.

    Q. Why are negative numbers not allowed on the return?

    The form will be incorrect with negative numbers. To complete the form correctly, do not enter negative amounts. To handle negative amounts arising from prior-period adjustments, amend the return in which the error occurred. If a refund is due, also file Form RPD-41071, Application for Tax Refund .

    Q. How do I change my registration information?

    Use Form ACD-31075, Business Tax Registration Update . Click instructions for Form ACD-31075 to see instructions for completing the form. Submit the form to the following address:

    Special Tax Programs & Services
    PO Box 25123
    Santa Fe, NM 87504-5123


    Tobacco Products Tax

    Q. In general, who is responsible for paying the Tobacco Products Tax?

    The “first purchaser” of tobacco products in New Mexico is responsible.

    Q. Who is considered a “first purchaser”?

    A “first purchaser” is a person engaging in business in New Mexico who manufactures tobacco products or who purchases tobacco products for resale.

    Q. What are considered tobacco products?

    Any products, other than cigarettes, made from or containing tobacco are considered tobacco products.

    Q. How do I pay tobacco tax?

    Pay Tobacco tax monthly using Form RPD-41192, Tobacco Products Tax Return .

    Q. How much is the tax?

    The tax is twenty-five percent (25%) of the purchase cost of the product.

    Q. When is the tax due?

    Pay the tax on or before the 25th day of the month following the month in which the taxable event occurs.


    Wage Withholding Tax

    Q. As an employer must I submit an annual report of New Mexico withholding tax paid and reported during the tax year?

    No, but you may choose to complete and submit to the Taxation and Revenue Department (TRD) Form RPD-41072, Annual Summary of Withholding Tax for CRS-1 Filers . That form reconciles the total amounts withheld on the annual statement of withholding information returns given to withholdees (Federal forms W-2, W-2g, 1099-R) with the total tax withheld and paid to New Mexico on Form RPD-41072, Annual Summary of Withholding Tax for CRS-1 Filers .

    Q. Does New Mexico have a state version of the federal W-4 form?

    New Mexico does not have a form equivalent to the federal Form W-4. For New Mexico withholding tax, you should use a federal W-4 and write across the top of that form: "For New Mexico Withholding Tax Only." Retain it in your files for reference.

    Q. Must a business located outside New Mexico report and pay New Mexico withholding tax for an employee who lives in New Mexico but works in another state?

    An employer is not required to report and pay New Mexico withholding tax for a New Mexico resident employee unless the employer has income from activity or sources in New Mexico. The employer may choose to report and pay such tax as a courtesy upon the employee's request, however, since that employee may be liable for New Mexico personal income tax.

    Q. We are a company located outside New Mexico. We are sending employees, who are not New Mexico residents, to work a job in New Mexico for one week. Do we have to pay and report New Mexico withholding tax for them?

    No. Employees who are not New Mexico residents are exempt from New Mexico withholding tax unless they work in this state for more than 15 days during the calendar year.

    Q. I have questions on New Mexico unemployment tax. Whom do I contact?

    TRD does not administer New Mexico unemployment taxes. For information on this tax program, please contact the Department of Workforce Solutions


    Water Conservation Fee

    Q. How often must Water Conservation Fee (H20) returns be filed?

    File a return for each month, quarter or semi-annual period, depending upon your required filing frequency. If no water was produced for a report period, no report is due. File the H20 return on or before the 25th of the month following the close of the report period.

    Q. Who is required to file the Water Conservation Fee (H20) return?

    A person or entity that operates a public water supply system must file.

    Q. What is the Water Conservation Fee (H20) rate?

    Calculate the Water Conservation Fee at three cents ($0.03) per thousand gallons of water produced.

    Q. What form is used when paying Water Conservation Fee (H20)?

    Q. If I overpay, how do I obtain a refund?

    Complete both a corrected Form RPD-41109, Water Conservation Fee Return and Form RPD-41071, Application for Tax Refund  and send them to the address on the Water Conservation Fee Return.

    Q. Why are negative numbers not allowed on the return?

    The form will be incorrect with negative numbers. To correctly complete the form, do not enter negative amounts. Handle negative amounts arising from prior-period adjustments by amending the return in which the error occurred. If a refund is due, also file Form RPD-41071, Application for Tax Refund

    Q. How do I change my registration information?

    Use Form ACD-31075, Business Tax Registration Update to make changes. Click instructions for Form ACD-31075 to see instructions for completing the form. Submit the form to the following address:


    Weight Distance Tax

    Q. Who must file a weight distance tax return?

    Registrants, owners and operators of all motor vehicles having a declared gross weight or gross vehicle weight over 26,000 pounds and who are using highways in this state are subject to the weight distance tax for the use of the highways of New Mexico and must file and pay the tax due.

    Q. What is the filing frequency for a weight distance tax return?

    Carriers must file and pay weight distance tax on a quarterly basis. Submit the report and tax on or before the last day of the month following the close of the report period. Even if you have not traveled through New Mexico, you must file a return. This requirement keeps carriers in compliance and helps you avoid non-filer penalties.

    Q. Whom can I contact for questions about the weight distance tax return?

    You may contact Commercial Vehicles @ (505) 827-0392 option # 2 for WDT/IFTA.

    Q. What if money was collected at the port of entry?

    If you have paid to travel through New Mexico, you may deduct the miles paid for at the port of entry and retain the receipt in your records. You can only deduct the miles. You cannot receive a refund for the amount collected at the port.


    Workers Compensation Fee

    Q. What are the requirements for workers' compensation in New Mexico?

    First: If you are covered by the workers' compensation law, you are required to obtain workers' compensation insurance. You can buy this insurance privately from any insurance agency that sells commercial lines of insurance. You must obtain workers' compensation insurance if you have three or more full-time or part-time employees. If you are in construction, however, you must have worker’s compensation insurance even if you have only one employee.

    In other industries, many employers with only one or two employees buy workers' compensation insurance even though not required by law. They do this because workers' compensation insurance provides important protection for them and their employees. This is called "electing" coverage. If you have elected coverage, then you must file and pay the personnel assessment fee using form WC-1.

    For more information about the requirement, contact the state Workers' Compensation Administration (WCA) . Or you can request printed publications from the WCA.
    Second: You also must pay the workers' compensation personnel assessment fee. This fee is a quarterly tax payment to the Taxation and Revenue Department (TRD). It is not insurance coverage.

    Q. Where do I register with the state for the workers' compensation personnel assessment fee?

    It is your responsibility to register for the personnel assessment fee with TRD. Although workers’ compensation insurance coverage must be registered with the Workers' Compensation Administration, it is handled by the insurance agency. To determine how much to pay with your quarterly filing, count the number of employees on your payroll on the last working day of the quarter. If you have no employees, you do not have to pay anything, but you must file a "zero report."

    Q. Who must pay?

    Every employer covered by the New Mexico Workers Compensation Act, whether by requirement or election, must file and pay the New Mexico Worker’s Compensation fee with form WC-1.

    Q. What is the amount due per employee?

    The fee is $4.30 per quarter for each covered employee who is employed on the last working day of the calendar quarter. $2.00 should be deducted from the wages of the employee and $2.30 should be paid by the employer.

    Q. When is the workers’ compensation fee due?

    The workers’ compensation fee is due the last day of the month following the end of the quarter (e.g., quarter ending 3/31/10 is due 4/30/10).

    Q. When will I receive workers’ compensation forms?

    You should receive workers’ compensation forms two weeks prior to the due date of the 1st quarter. The packet contains the forms for the 1st and 2nd quarters. The second packet arrives two weeks before the due date of the 3rd quarter and contains forms for the 3rd and 4th quarters.

    Q. How can I obtain a refund for overpayment?

    To obtain a refund, complete Form RPD 41071, Application for Tax Refund with supporting documentation for the basis for refund requested on the form.

    Q. How do I know if I need workers’ compensation insurance?

    TRD collects the workers’ compensation fee but does not administer the workers’ compensation program for the State of New Mexico. If you have questions concerning the workers’ compensation fee, please contact us. Direct questions on whether you are required to have workers’ compensation insurance or other program-specific questions to the Workers’ Compensation Administration



    • Message from the Secretary
      Thank you again for making the 2012 tax-filing season a success. Largely because of your efforts, we were able to process nearly $260 million in personal income tax refunds in a timely and efficient fashion with very few errors. Read More       ​

    E-File for accurate returns and faster refunds.
    Federal automatic extensions also extend New Mexico income tax returns.
    E-File and E-Pay and extend your income tax due date.
    Get your refund faster when you E-File.
    Low-income residents may qualify for income tax credits.
    You may qualify for the Working Family Income Tax Credit.
    You may qualify for the Earned Income Tax credits.
    Estimated tax payments may be required if you withhold too little.
    Manage your account online using Taxpayer Access Point.
    Business closed? Update your CRS account online.
    Gross receipts tax rates are subject to change in January and July.
    NTTCs may be required to support tax-deductible sales.
    Changing your address? Update your tax records online.
    View payments and returns using Taxpayer Access Point.
    Keep up with recent tax changes. See the instructions.
    Keep accurate tax records for up to 10 years.
    Double-check your figures. Errors will delay your return.
    Get your money faster using refund express direct deposit.
    Pay online by electronic check or credit card.
    Avoid delays, submit a complete return.
    Tax Fraud in New Mexico, call 1-800-457-6789.
    Check the status of your refund, visit Taxpayer Access Point.
    Pay your property taxes to your county treasurer.
    Delinquent property taxes? See your local county treasurer’s office.
    Find out who is managing your county government.
    Property tax auctions are often held at the county treasurer’s office.
    April property tax valuation determines your November tax bill.
    Property taxes pay for schools, police, and hospitals.
    Property was sold at auction? We may have your money.
    Stop penalty and interest by paying your principal tax quickly.
    Make sure you use correct tax ID numbers.
    Refund express? Double-check your bank account and routing numbers.
    Include your phone number and e-mail address when filing.
    Secure your tax records from identity theft.
    Generally, both spouses are responsible for liability on a joint return.
    Sign and date your return.
    Avoid preparers who base their fee on a percentage of the refund.
    Tax fraud is the responsibility of the taxpayer
    Visit Website