Oil and Gas Proceeds Witholding Tax

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...

read more

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.

read more

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...

read more

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.

read more

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...

read more

Are there any other report requirements?

For tax years beginning January 1, 2011, Form RPD- 41283, Annual Summary of Oil and Gas Proceeds Withholding Tax, is no longer required to be mailed to the Department. Form RPD-41283 should be completed and retained by the remitter. Form RPD-41283 reconciles the total...

read more