New Mexico 2025 Regular Session

New Mexico House Bill HB548 Compare Versions

Only one version of the bill is available at this time.

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28	28	HOUSE BILL 548
29	29	57
30	30	TH LEGISLATURE
31	31	-
32	32
33	33	STATE
34	34
35	35	OF
36	36
37	37	NEW
38	38
39	39	MEXICO
40	40
41	41	-
42	42	FIRST SESSION
43	43	,
44	44
45	45	2025
46	46	INTRODUCED BY
47	47	Nathan P. Small and Meredith A. Dixon
48	48	AN ACT
49	49	RELATING TO TAXATION; ENACTING THE OIL AND GAS EQUALIZATION TAX
50	50	ACT.
51	51	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
52	52	SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1
53	53	through 11 of this act may be cited as the "Oil and Gas
54	54	Equalization Tax Act".
55	55	SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the
56	56	Oil and Gas Equalization Tax Act:
57	57	A. "department" means the taxation and revenue
58	58	department, the secretary of taxation and revenue or any
59	59	employee of the department exercising authority lawfully
60	60	delegated to that employee by the secretary;
61	61	B. "production unit" means a unit of property
62	62	designated by the department from which products of common
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90	90	ownership are severed;
91	91	C. "severance" means the taking from the soil of
92	92	any product in any manner whatsoever;
93	93	D. "value" means the actual price received from
94	94	products at the production unit, except as otherwise provided
95	95	in the Oil and Gas Equalization Tax Act;
96	96	E. "product" or "products" means oil, including
97	97	crude, slop or skim oil and condensate; liquid hydrocarbon,
98	98	including ethane, propane, isobutene, normal butane and
99	99	pentanes plus, individually or any combination thereof; and
100	100	non-hydrocarbon gases, including carbon dioxide and helium;
101	101	F. "operator" means any person:
102	102	(1) engaged in the severance of products from
103	103	a production unit; or
104	104	(2) owning an interest in any product at the
105	105	time of severance who receives a portion or all of such product
106	106	for the person's interest;
107	107	G. "purchaser" means a person who is the first
108	108	purchaser of a product after severance from a production unit,
109	109	except as otherwise provided in the Oil and Gas Equalization
110	110	Tax Act;
111	111	H. "person" means any individual, estate, trust,
112	112	receiver, business trust, corporation, firm, copartnership,
113	113	cooperative, joint venture, association, limited liability
114	114	company or other group or combination acting as a unit, and the
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143	143	plural as well as the singular number;
144	144	I. "interest owner" means a person owning an entire
145	145	or fractional interest of whatsoever kind or nature in the
146	146	products at the time of severance from a production unit or who
147	147	has a right to a monetary payment that is determined by the
148	148	value of such products;
149	149	J. "taxable value" means the average of the taxable
150	150	value per barrel, determined pursuant to Section 4 of the Oil
151	151	and Gas Equalization Tax Act, of all oil produced in New Mexico
152	152	for the specified calendar year as determined by the
153	153	department;
154	154	K. "tax" means the oil and gas equalization tax;
155	155	and
156	156	L. "volume" means the quantity of product severed
157	157	reported using:
158	158	(1) oil, condensate and slop oil in barrels;
159	159	and
160	160	(2) liquid hydrocarbons, helium and carbon
161	161	dioxide in thousand cubic feet at a pressure base of fifteen
162	162	and twenty-five thousandths pounds per square inch.
163	163	SECTION 3. [NEW MATERIAL] PRIVILEGE TAX LEVIED--COLLECTED
164	164	BY DEPARTMENT--RATE--INTEREST OWNER'S LIABILITY TO STATE--
165	165	INDIAN LIABILITY.--
166	166	A. There is imposed and shall be collected by the
167	167	department a privilege tax on all products that are severed and
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196	196	sold. The measure of the tax is eighty-five hundredths percent
197	197	of the taxable value of oil and on oil and other liquid
198	198	hydrocarbons removed from natural gas at or near the wellhead.
199	199	B. Every interest owner, for the purpose of levying
200	200	this tax, is deemed to be in the business of severing products
201	201	and is liable for the tax to the extent of the owner's interest
202	202	in the value of the products or to the extent of the owner's
203	203	interest as may be measured by the value of the products.
204	204	C. Any Indian tribe, Indian pueblo or Indian is
205	205	liable for the tax to the extent authorized or permitted by
206	206	law.
207	207	SECTION 4. [NEW MATERIAL] TAXABLE VALUE--METHOD OF
208	208	DETERMINING.--To determine the taxable value, there shall be
209	209	deducted from the value of products:
210	210	A. royalties paid or due to the United States or
211	211	the state of New Mexico;
212	212	B. royalties paid or due to any Indian tribe,
213	213	Indian pueblo or Indian that is a ward of the United States of
214	214	America; and
215	215	C. the reasonable expense of trucking any product
216	216	from the production unit to the first place of market.
217	217	SECTION 5. [NEW MATERIAL] VALUE MAY BE DETERMINED BY
218	218	DEPARTMENT--STANDARD.--
219	219	A. The department may determine the value of
220	220	products severed from a production unit when:
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249	249	(1) the operator and purchaser are affiliated
250	250	persons;
251	251	(2) the sale and purchase of products are not
252	252	an arm's length transaction; or
253	253	(3) products are severed and removed from a
254	254	production unit and a value as defined in the Oil and Gas
255	255	Equalization Tax Act is not established for such products.
256	256	B. The value determined by the department shall be
257	257	commensurate with the actual price received for products of
258	258	like quality, character and use that are severed in the same
259	259	field or area.
260	260	SECTION 6. [NEW MATERIAL] PRICE INCREASE SUBJECT TO
261	261	APPROVAL OF AGENCY OF UNITED STATES OF AMERICA, STATE OF NEW
262	262	MEXICO OR COURT--REFUND.--When an increase in the value of any
263	263	product is subject to the approval of any agency of the United
264	264	States of America or the state of New Mexico or any court, the
265	265	increased value shall be subject to the tax. In the event the
266	266	increase in value is disapproved, either in whole or in part,
267	267	then the amount of tax that has been paid on the disapproved
268	268	part of the value shall be considered excess tax. A person who
269	269	has paid excess tax may apply for a refund of that excess tax
270	270	in accordance with the provisions of Section 7-1-26 NMSA 1978.
271	271	SECTION 7. [NEW MATERIAL] PRODUCTS ON WHICH TAX HAS BEEN
272	272	LEVIED--DEPARTMENT RULE.--The tax shall not be levied more than
273	273	once on the same product. Reporting of products on which the
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302	302	tax has been paid is subject to department rule.
303	303	SECTION 8. [NEW MATERIAL] OPERATOR OR PURCHASER TO
304	304	WITHHOLD INTEREST OWNER'S TAX--DEPARTMENT MAY REQUIRE
305	305	WITHHOLDING OF TAX--TAX WITHHELD TO BE REMITTED TO THE STATE--
306	306	OPERATOR OR PURCHASER TO BE REIMBURSED.--
307	307	A. A operator making a monetary payment to an
308	308	interest owner for the operator's portion of the value of
309	309	products from a production unit shall withhold from the payment
310	310	the amount of tax due from the interest owner.
311	311	B. A purchaser who, by express or implied agreement
312	312	with the operator, makes a monetary payment to an interest
313	313	owner for the purchaser's portion of the value of products from
314	314	a production unit shall withhold from the payment the amount of
315	315	tax due from the interest owner.
316	316	C. The department may require a purchaser making a
317	317	monetary payment to an interest owner for the purchaser's
318	318	portion of the value of products from a production unit to
319	319	withhold from the payment the amount of tax due from the
320	320	interest owner.
321	321	D. An operator or purchaser who pays tax due from
322	322	an interest owner shall be entitled to reimbursement from the
323	323	interest owner for the tax paid and may take credit for the
324	324	amount from any monetary payment to the interest owner for the
325	325	value of products.
326	326	SECTION 9. [NEW MATERIAL] OPERATOR'S REPORT--TAX
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355	355	REMITTANCE--ADDITIONAL INFORMATION.--Each operator shall, in
356	356	the form and manner required by the department, file a return
357	357	with the department showing the total value, volume and kind of
358	358	products sold from each production unit for each calendar
359	359	month. All taxes due or to be remitted by the operator shall
360	360	accompany the return. The return shall be filed on or before
361	361	the twenty-fifth day of the second month after the calendar
362	362	month for which the return is required. Any additional report
363	363	or information the department may deem necessary for the proper
364	364	administration of the Oil and Gas Equalization Tax Act may be
365	365	required.
366	366	SECTION 10. [NEW MATERIAL] PURCHASER'S REPORT--TAX
367	367	REMITTANCE--ADDITIONAL INFORMATION.--Each purchaser shall, in
368	368	the form and manner required by the department, file a return
369	369	with the department showing the total value, volume and kind of
370	370	products purchased by the purchaser from each production unit
371	371	for each calendar month. All taxes due or to be remitted by
372	372	the purchaser shall accompany the return. The return shall be
373	373	filed on or before the twenty-fifth day of the second month
374	374	after the calendar month for which the return is required. Any
375	375	additional reports or information the department may deem
376	376	necessary for the proper administration of the Oil and Gas
377	377	Equalization Tax Act may be required.
378	378	SECTION 11. [NEW MATERIAL] ADVANCE PAYMENT REQUIRED.--
379	379	A. A person required to make payment of tax
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408	408	pursuant to Section 9 of the Oil and Gas Equalization Tax Act
409	409	shall make the advance payment required by this section.
410	410	B. For the purposes of this section:
411	411	(1) "advance payment" means the payment
412	412	required to be made by this section in addition to any oil and
413	413	gas equalization tax, penalty or interest due; and
414	414	(2) "average tax" means the aggregate amount
415	415	of tax, less any refunds or credits, paid by a person for the
416	416	twelve-month period ending the last day of February pursuant to
417	417	the Oil and Gas Equalization Tax Act divided by the number of
418	418	months during that period for which the person made payment.
419	419	C. Each year, prior to July 1, the department shall
420	420	compute the advance payment required to be made pursuant to
421	421	this section, compute the average tax for the filing periods
422	422	February through January of the subsequent year for each person
423	423	required to pay tax pursuant to the Oil and Gas Equalization
424	424	Tax Act and provide a tax statement to each person required to
425	425	pay tax pursuant to the Oil and Gas Equalization Tax Act. The
426	426	average tax calculated for a year shall be used during the
427	427	twelve-month period beginning in July of that year and ending
428	428	in June of the following year as the basis for making the
429	429	advance payments required by Subsection D of this section.
430	430	D. Annually, by the twenty-fifth day of the month
431	431	in which a person files or amends that person's first return
432	432	pursuant to the Oil and Gas Equalization Tax Act and after
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461	461	receiving the tax statement provided by the department, a
462	462	person required to pay tax in a month pursuant to the Oil and
463	463	Gas Equalization Tax Act shall pay, in addition to any amount
464	464	of tax, interest or penalty due, an advance payment in an
465	465	amount equal to the applicable average tax, except:
466	466	(1) if the person is making a final return
467	467	under the Oil and Gas Equalization Tax Act, no advance payment
468	468	pursuant to this subsection is due for that return; and
469	469	(2) as provided in Subsection F of this
470	470	section.
471	471	E. Annually, by the twenty-fifth day of the month
472	472	in which a person files or amends that person's first return
473	473	pursuant to the Oil and Gas Equalization Tax Act and after
474	474	receiving the tax statement provided by the department, a
475	475	person required to pay tax pursuant to the Oil and Gas
476	476	Equalization Tax Act may claim a credit equal to the amount of
477	477	advance payment made in the previous year, except as provided
478	478	in Subsection F of this section.
479	479	F. If, in a year, a person is not required to pay
480	480	tax pursuant to the Oil and Gas Equalization Tax Act, that
481	481	person is not required to pay the advance payment and shall not
482	482	claim a credit pursuant to Subsection E of this section;
483	483	provided that, in any succeeding month when the person has
484	484	liability under the Oil and Gas Equalization Tax Act, the
485	485	person may claim a credit for any advance payment made and not
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514	514	credited.
515	515	G. In the event that the date by which a person is
516	516	required to pay the tax pursuant to the Oil and Gas
517	517	Equalization Tax Act is accelerated to a date earlier than the
518	518	twenty-fifth day of the second month following the month of
519	519	production, the advance payment provision contained in this
520	520	section is void and any money held as advance payments shall be
521	521	credited to the taxpayers' accounts.
522	522	SECTION 12. Section 7-1-2 NMSA 1978 (being Laws 1965,
523	523	Chapter 248, Section 2, as amended) is amended to read:
524	524	"7-1-2. APPLICABILITY.--The Tax Administration Act
525	525	applies to and governs:
526	526	A. the administration and enforcement of the
527	527	following taxes or tax acts as they now exist or may hereafter
528	528	be amended:
529	529	(1) Income Tax Act;
530	530	(2) Withholding Tax Act;
531	531	(3) Oil and Gas Proceeds and Pass-Through
532	532	Entity Withholding Tax Act;
533	533	(4) Gross Receipts and Compensating Tax Act,
534	534	Interstate Telecommunications Gross Receipts Tax Act and Leased
535	535	Vehicle Gross Receipts Tax Act;
536	536	(5) Liquor Excise Tax Act;
537	537	(6) Local Liquor Excise Tax Act;
538	538	(7) any municipal local option gross receipts
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567	567	tax or municipal compensating tax;
568	568	(8) any county local option gross receipts tax
569	569	or county compensating tax;
570	570	(9) Special Fuels Supplier Tax Act;
571	571	(10) Gasoline Tax Act;
572	572	(11) petroleum products loading fee, which fee
573	573	shall be considered a tax for the purpose of the Tax
574	574	Administration Act;
575	575	(12) Alternative Fuel Tax Act;
576	576	(13) Cigarette Tax Act;
577	577	(14) Estate Tax Act;
578	578	(15) Railroad Car Company Tax Act;
579	579	(16) Investment Credit Act, rural job tax
580	580	credit, Laboratory Partnership with Small Business Tax Credit
581	581	Act, Technology Jobs and Research and Development Tax Credit
582	582	Act, Film Production Tax Credit Act, Affordable Housing Tax
583	583	Credit Act and high-wage jobs tax credit;
584	584	(17) Corporate Income and Franchise Tax Act;
585	585	(18) Uniform Division of Income for Tax
586	586	Purposes Act;
587	587	(19) Multistate Tax Compact;
588	588	(20) Tobacco Products Tax Act;
589	589	(21) the telecommunications relay service
590	590	surcharge imposed by Section 63-9F-11 NMSA 1978, which
591	591	surcharge shall be considered a tax for the purposes of the Tax
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620	620	Administration Act;
621	621	(22) the Insurance Premium Tax Act;
622	622	(23) the Health Care Quality Surcharge Act;
623	623	(24) the Cannabis Tax Act; and
624	624	(25) the Health Care Delivery and Access Act;
625	625	B. the administration and enforcement of the
626	626	following taxes, surtaxes, advanced payments or tax acts as
627	627	they now exist or may hereafter be amended:
628	628	(1) Resources Excise Tax Act;
629	629	(2) Severance Tax Act;
630	630	(3) any severance surtax;
631	631	(4) Oil and Gas Severance Tax Act;
632	632	(5) Oil and Gas Conservation Tax Act;
633	633	(6) Oil and Gas Emergency School Tax Act and
634	634	the Oil and Gas Equalization Tax Act ;
635	635	(7) Oil and Gas Ad Valorem Production Tax Act;
636	636	(8) Natural Gas Processors Tax Act;
637	637	(9) Oil and Gas Production Equipment Ad
638	638	Valorem Tax Act;
639	639	(10) Copper Production Ad Valorem Tax Act;
640	640	(11) any advance payment required to be made
641	641	by any act specified in this subsection, which advance payment
642	642	shall be considered a tax for the purposes of the Tax
643	643	Administration Act;
644	644	(12) Enhanced Oil Recovery Act;
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673	673	(13) Natural Gas and Crude Oil Production
674	674	Incentive Act; and
675	675	(14) intergovernmental production tax credit
676	676	and intergovernmental production equipment tax credit;
677	677	C. the administration and enforcement of the
678	678	following taxes, surcharges, fees or acts as they now exist or
679	679	may hereafter be amended:
680	680	(1) Weight Distance Tax Act;
681	681	(2) the workers' compensation fee authorized
682	682	by Section 52-5-19 NMSA 1978, which fee shall be considered a
683	683	tax for purposes of the Tax Administration Act;
684	684	(3) Uniform Unclaimed Property Act (1995);
685	685	(4) 911 emergency surcharge and the network
686	686	and database surcharge, which surcharges shall be considered
687	687	taxes for purposes of the Tax Administration Act;
688	688	(5) the solid waste assessment fee authorized
689	689	by the Solid Waste Act, which fee shall be considered a tax for
690	690	purposes of the Tax Administration Act;
691	691	(6) the water conservation fee imposed by
692	692	Section 74-1-13 NMSA 1978, which fee shall be considered a tax
693	693	for the purposes of the Tax Administration Act; and
694	694	(7) the gaming tax imposed pursuant to the
695	695	Gaming Control Act; and
696	696	D. the administration and enforcement of all other
697	697	laws, with respect to which the department is charged with
698	698	.230764.1
699	699	- 13 - underscored material = new
700	700	[bracketed material] = delete
701	701	1
702	702	2
703	703	3
704	704	4
705	705	5
706	706	6
707	707	7
708	708	8
709	709	9
710	710	10
711	711	11
712	712	12
713	713	13
714	714	14
715	715	15
716	716	16
717	717	17
718	718	18
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720	720	20
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722	722	22
723	723	23
724	724	24
725	725	25
726	726	responsibilities pursuant to the Tax Administration Act, but
727	727	only to the extent that the other laws do not conflict with the
728	728	Tax Administration Act."
729	729	SECTION 13. EFFECTIVE DATE.--The effective date of the
730	730	provisions of this act is July 1, 2025.
731	731	- 14 -
732	732	.230764.1