us-nm/stat
NMSA 1978, § 7-26-6.2 — Coal surtax exemption; qualification requirements
A.
The following coal is exempt from the surtax imposed on coal under the
provisions of Section 7-26-6 NMSA 1978:
(1) coal sold and delivered pursuant to coal sales contracts that are entered
into on or after July 1, 1990, under which deliveries start after July 1, 1990, if the sales
contracts are not the result of:
(a) a producer and purchaser mutually rescinding an existing contract and
negotiating a revised contract under substantially similar terms and conditions;
(b) a purchaser establishing an affiliated company to purchase coal on behalf
of the purchaser; or
(c) a purchaser independently abrogating a contract that was in effect on July
1, 1990 with a producer for the purpose of securing the benefits of the exemption
granted by this section; and
(2) coal sold and delivered pursuant to a contract in effect on July 1, 1990 that
exceeds the average calendar year deliveries under the contract during production
years 1987, 1988 and 1989 or the highest contract minimum during 1987, 1988 and
1989, whichever is greater.
B.
If a contract existing on July 1, 1990 is renegotiated between a producer and a
purchaser after May 20, 1992 and if that renegotiated contract requires the purchaser to
take annual coal deliveries in excess of the greater of the average calendar year
deliveries under the contract during production years 1987, 1988 and 1989 or the
highest contract minimum during 1987, 1988 and 1989, the surtax imposed by
Subsection B of Section 7-26-6 NMSA 1978 shall not apply to such excess deliveries for
the remaining term of the renegotiated contract.
C.
For coal exempt under the provisions of Paragraph (2) of Subsection A of this
section, if the contract involved was for a lesser term during the production years
specified, then actual deliveries shall be annualized to establish average calendar year
deliveries, and in the event that coal sold and delivered in a calendar year after June 30,
2009 falls below the average calendar year deliveries during 1987, 1988 and 1989, the
exemption shall no longer apply unless the deliveries are reduced due to causes
beyond the reasonable control of either party to the contract.
D.
The taxpayer, prior to taking the exemption provided by this section, shall register
any contract for the sale of coal that qualifies for the exemption from the surtax under
the provisions of this section with the department on forms provided by the secretary. If
upon examination of the contract or upon audit or inspection of transactions occurring
under the contract the secretary or the secretary's delegate determines that a person
who is a party to the contract has taken an action to circumvent the intent and purpose
of this section, the exemption shall be disallowed.
Source: official text