New Mexico Lawmakers Approve 2010 Tax Amnesty

On June 7, 2010, New Mexico announced its 2010 amnesty program (“Program”), “New Mexico Tax Relief.” The Program, which began June 7, 2010 and ends September 30, 2010, offers a waiver of interest and penalties on taxes due prior to January 1, 2010. New Mexico’s Program was authorized by Senate Bill 2 (“SB 2”), which was signed by the Governor on March 19, 2010.

The Program can be used to pay most state taxes and fees administered by the New Mexico Taxation and Revenue Department (“Department”), including gross receipts tax, withholding tax, liquor excise tax, corporate income tax, workers’ compensation fees, oil and gas production tax, weight distance tax, tobacco products tax, and compensating use tax. It does not include taxes previously reported to or assessed by the Department.

Taxpayers interested in participating in this Program must submit applications and amnesty agreements to the Department on or before September 30, 2010. The Department has created a form application and agreement, and these documents can be located at http://www.taxrelief.newmexico.gov/apply.html. The amnesty agreement requires disclosure of the report periods and the type of receipts, transactions, or issues for which amnesty is requested. Further, the agreement requires the taxpayer to identify the procedures and records used in performing the amnesty review and the date on which the taxpayer will present required documents to the Department. In addition to tax calculation workpapers, additional source documents that may be required include non-taxable transaction certificates, tax returns, or other accounting records.

If the Department approves the amnesty application and agreement, the Department will waive penalties for qualifying taxpayers who enter into an amnesty agreement. Penalty is 2% per month up to a maximum of 20%. If taxpayers pay the resulting assessment within 180 days of assessment, no interest will be due. If the tax is not paid within 180 days, interest will accrue from the date the tax was originally due. New Mexico’s interest rate is computed daily at the rate established for individual income tax purposes by the Internal Revenue Code. In addition, participating taxpayers may be asked to waive limitations on assessments for the periods under amnesty.

For additional information on New Mexico’s Tax Relief Amnesty Program, please visit http://www.taxrelief.newmexico.gov.