The proposed legislation, titled the "Oil and Gas Equalization Tax Act," establishes a new tax framework for the severance and sale of oil and gas products in New Mexico. It introduces a privilege tax of 0.85% on the taxable value of oil and liquid hydrocarbons severed from production units. The bill defines key terms such as "operator," "purchaser," and "taxable value," and outlines the responsibilities of operators and purchasers in reporting and remitting taxes. Additionally, it specifies that the taxation will not be levied more than once on the same product and allows the taxation department to determine the value of products under certain conditions.

The act also mandates advance payments of taxes based on average tax calculations from the previous year, with specific provisions for refunds in cases where tax increases are disapproved. Furthermore, it amends existing tax administration laws to include the Oil and Gas Equalization Tax Act, ensuring that it is governed by the same administrative framework as other tax acts. The effective date for the provisions of this act is set for July 1, 2025.

Statutes affected:
introduced version: 7-1-2