NMSA 1978, § 7-29-4 — 7-29-4

Oil and gas severance tax imposed; collection; interest
owner's liability to state; Indian liability.

# A.

There is imposed and shall be collected by the department a tax on all products
that are severed and sold, except as provided in Subsection B of this section. The
measure of the tax and the rates are:
(1) on natural gas severed and sold, except as provided in Paragraphs (4), (6)
and (7) of this subsection, three and three-fourths percent of the taxable value
determined pursuant to Section 7-29-4.1 NMSA 1978;
(2) on oil and on other liquid hydrocarbons removed from natural gas at or
near the wellhead, except as provided in Paragraphs (3), (5), (8) and (9) of this
subsection, three and three-fourths percent of taxable value determined pursuant to
Section 7-29-4.1 NMSA 1978;
(3) on oil and on other liquid hydrocarbons removed from natural gas at or
near the wellhead produced from a qualified enhanced recovery project, one and seven-
eighths percent of the taxable value determined pursuant to Section 7-29-4.1 NMSA
1978, provided that the annual average price of west Texas intermediate crude oil,
determined by the department by averaging the posted prices in effect on the last day of
each month of the twelve-month period ending on May 31 prior to the fiscal year in
which the tax rate is to be imposed, was less than twenty-eight dollars ($28.00) per
barrel;
(4) on the natural gas from a well workover project that is certified by the oil
conservation division of the energy, minerals and natural resources department in its
approval of the well workover project, two and forty-five hundredths percent of the
taxable value determined pursuant to Section 7-29-4.1 NMSA 1978, provided that the
annual average price of west Texas intermediate crude oil, determined by the
department by averaging the posted prices in effect on the last day of each month of the
twelve-month period ending on May 31 prior to the fiscal year in which the tax rate is to
be imposed, was less than twenty-four dollars ($24.00) per barrel;
(5) on the oil and on other liquid hydrocarbons removed from natural gas at or
near the wellhead from a well workover project that is certified by the oil conservation
division of the energy, minerals and natural resources department in its approval of the
well workover project, two and forty-five hundredths percent of the taxable value
determined pursuant to Section 7-29-4.1 NMSA 1978, provided that the annual average
price of west Texas intermediate crude oil, determined by the department by averaging
the posted prices in effect on the last day of each month of the twelve-month period
ending on May 31 prior to the fiscal year in which the tax rate is to be imposed, was less
than twenty-four dollars ($24.00) per barrel;
(6) on the natural gas from a stripper well property, one and seven-eighths
percent of the taxable value determined pursuant to Section 7-29-4.1 NMSA 1978,
provided the average annual taxable value of natural gas was equal to or less than one
dollar fifteen cents ($1.15) per thousand cubic feet in the calendar year preceding July 1
of the fiscal year in which the tax rate is to be imposed;
(7) on the natural gas from a stripper well property, two and thirteen-
sixteenths percent of the taxable value determined pursuant to Section 7-29-4.1 NMSA
1978, provided that the average annual taxable value of natural gas was greater than
one dollar fifteen cents ($1.15) per thousand cubic feet but not more than one dollar
thirty-five cents ($1.35) per thousand cubic feet in the calendar year preceding July 1 of
the fiscal year in which the tax rate is to be imposed;
(8) on the oil and on other liquid hydrocarbons removed from natural gas at or
near the wellhead from a stripper well property, one and seven-eighths percent of the
taxable value determined pursuant to Section 7-29-4.1 NMSA 1978, provided that the
average annual taxable value of oil was equal to or less than fifteen dollars ($15.00) per
barrel in the calendar year preceding July 1 of the fiscal year in which the tax rate is to
be imposed;
(9) on the oil and on other liquid hydrocarbons removed from natural gas at or
near the wellhead from a stripper well property, two and thirteen-sixteenths percent of
the taxable value determined pursuant to Section 7-29-4.1 NMSA 1978, provided that
the average annual taxable value of oil was greater than fifteen dollars ($15.00) per
barrel but not more than eighteen dollars ($18.00) per barrel in the calendar year
preceding July 1 of the fiscal year in which the tax rate is to be imposed; and
(10) on carbon dioxide, helium and non-hydrocarbon gases, three and three-
fourths percent of the taxable value determined pursuant to Section 7-29-4.1 NMSA
1978.

# B.

The tax imposed in Subsection A of this section shall not be imposed on:
(1) natural gas severed and sold from a production restoration project during
the first ten years of production following the restoration of production, provided that the
annual average price of west Texas intermediate crude oil, determined by the
department by averaging the posted prices in effect on the last day of each month of the
twelve-month period ending on May 31 prior to each fiscal year in which the tax
exemption is to be effective, was less than twenty-four dollars ($24.00) per barrel; and
(2) oil and other liquid hydrocarbons removed from natural gas at or near the
wellhead from a production restoration project during the first ten years of production
following the restoration of production, provided that the annual average price of west
Texas intermediate crude oil, determined by the department by averaging the posted
prices in effect on the last day of each month of the twelve-month period ending on May
31 prior to each fiscal year in which the tax exemption is to be effective, was less than
twenty-four dollars ($24.00) per barrel.

# C.

Every interest owner shall be liable for the tax to the extent of the interest owner's
interest in such products. Any Indian tribe, Indian pueblo or Indian shall be liable for the
tax to the extent authorized or permitted by law.

# D.

The tax imposed by this section may be referred to as the "oil and gas severance
tax".