The proposed legislation, known as the "Oil and Gas Equalization Tax Act," establishes a new tax framework for the severance 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 and sold, with specific definitions provided for terms such as "operator," "purchaser," and "taxable value." The bill outlines the responsibilities of operators and purchasers in withholding and remitting taxes, as well as the process for determining taxable value, which includes deductions for royalties and transportation expenses. Additionally, it mandates that operators and purchasers file monthly returns detailing the value and volume of products sold or purchased.

The act also includes provisions for advance payments of taxes based on average tax calculations from the previous year, with specific guidelines for when these payments are required and how they can be credited. Furthermore, it amends existing tax administration laws to incorporate the Oil and Gas Equalization Tax Act, ensuring that it is governed under the same framework as other tax acts in New Mexico. The effective date for the provisions of this act is set for July 1, 2025.

Statutes affected:
introduced version: 7-1-2