The bill amends the New Mexico Tax Administration Act to strengthen tax compliance and enforcement. Key provisions 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. It also exempts taxpayers from interest assessments if their failure to pay is due to a good faith mistake of law, 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 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. Additionally, tax return preparers filing more than 25 personal income tax returns annually must submit them electronically unless a client requests otherwise.

The bill also revises sections related to tax fraud, increasing the petty misdemeanor threshold for tax fraud from $250 to $500 and adjusting the thresholds for misdemeanor and felony classifications to $1,000 and $5,000, respectively. It defines "sales suppression software" and establishes penalties for its use or sale to evade tax payments. Furthermore, fines for obstructing tax administration are raised from $250 to $1,000, and penalties for assaulting department employees are similarly increased. The offense of revealing taxpayer information is reclassified from a misdemeanor to a fourth-degree felony, with a maximum fine of $5,000. The effective dates for the bill's provisions are set for July 1, 2025, and January 1, 2026, for different sections.

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