Railroad Car Company Tax

The State imposes the Railroad Car Company Tax on the gross earnings of an organization as defined in Section 7-11-2C NMSA 1978 from the use or operation of railway cars within the state.  “Organization” excludes a railroad company operating its own or leased lines. This tax is imposed instead of property taxes on railway cars owned by that organization (Section 7-11-3 NMSA 1978). The tax rate is 1½% of gross earnings of the organization.

Every railroad company using or leasing the railway cars of any organization must withhold the tax when it pays the organization for the use or lease of the cars. The railroad company must pay the amount withheld in the previous year to the Department on or before March 1 each year. The organization is liable for any difference between the tax due for all of its cars and the sum of withheld taxes remitted by one or more railroad companies for the organization.

We deposit the revenue in the Tax Administration Suspense Fund and, after payment of refunds, the remaining revenue is distributed to the General Fund.

Railroad Car Company Tax Forms and Documents