The proposed legislation amends the New Mexico Tax Administration Act to strengthen tax compliance and enforcement. Key changes include raising the threshold for installment agreements available for public inspection from $1,000 to $10,000 and requiring the Taxation and Revenue Department to retain these agreements for a minimum of three years. A new provision exempts taxpayers from interest assessments if their failure to pay is due to a good faith mistake of law. Additionally, the bill increases the minimum interest rate for overpayments from $1 to $10 and raises the minimum penalty for failure to pay taxes or file returns from $5 to $15. Stricter penalties for willful tax evasion are also introduced, with the minimum fine increasing from $25 to $75 and the maximum fine for felony tax evasion rising from $10,000 to $50,000.

Moreover, the bill enhances penalties for tax fraud, reclassifying offenses based on the amount owed. Fraud involving $500 or less is now a petty misdemeanor, while amounts over $500 but not exceeding $1,000 are classified as misdemeanors. Amounts over $1,000 but not exceeding $5,000 are considered fourth-degree felonies, and amounts exceeding $5,000 but not more than $50,000 are classified as third-degree felonies, with amounts over $50,000 designated as second-degree felonies. The bill also increases fines for obstructing revenue laws and for assaulting department employees, with minimum fines raised to $1,000 and maximum fines increased to $25,000 for obstruction. The penalty for revealing taxpayer information is elevated to a fourth-degree felony, with fines up to $5,000 and potential imprisonment. The effective dates for the provisions are set for July 1, 2025, for Section 1 and January 1, 2026, for Sections 2 through 11.

Statutes affected:
introduced version: 7-1-21, 7-1-67, 7-1-68, 7-1-69, 7-1-29, 7-1-71.4, 7-1-72, 7-1-73, 7-1-74, 7-1-75, 7-1-76