NMSA 1978, § 7-36-33 — 7-36-33

Special method of valuation; certain industrial and
commercial personal property.

# A.

The following kinds of property shall be valued for property taxation purposes in
accordance with the provisions of this section;
(1) all property used in connection with mineral property and defined in
Paragraph (1) of Subsection B of Section 7-36-23 NMSA 1978 and Paragraph (1) of
Subsection B of Section 7-36-25 NMSA 1978;
(2) all industrial, manufacturing, construction and commercial machinery,
equipment, furniture, materials and supplies subject to valuation for property taxation
purposes and not subject to valuation under the provisions of Sections 7-36-22 through
7-36-32 NMSA 1978;
(3) all other business personal property subject to valuation for property
taxation purposes and not subject to valuation under the provisions of Sections 7-36-22
through 7-36-32 NMSA 1978; and
(4) construction work in progress that includes any of the items of property
specified in Paragraphs (1), (2) or (3) of this subsection.

# B.

As used in this section:
(1) "depreciation" means the straight line method of computing the
depreciation allowance over the useful life of the item of property;
(2) "useful life of the item of property" means the "class life" for same or
similar kinds of property as defined and used in Section 167 of the United States
Internal Revenue Code of 1954, as amended or renumbered;
(3) "other justifiable factors" includes, but is not limited to, functional and
economic obsolescence;
(4) "schedule value" means a fixed value of an individual property unit within
a mass of similar or like units established by determining the average unit tangible
property cost of a substantial sample of such property and deducting therefrom an
average related accumulated provision for depreciation per unit and an average of other
justifiable factors per unit;
(5) "tangible property cost" means the actual cost of acquisition or
construction of property including additions, retirements, adjustments and transfers, but
without deduction of related accumulated provision for depreciation, amortization or
other purposes; and
(6) "construction work in progress" means the total of the balance of work
orders for property in process of construction on the last day of the preceding calendar
year but does not include the equipment, machinery or devices used or available to
construct such property but not incorporated therein.

# C.

The value of individual items of property subject to valuation under this section,
except construction work in progress, shall be determined as follows:
(1) the valuation authority shall first establish the tangible property cost of
each item of property;
(2) from the tangible property cost shall be deducted the related accumulated
provision for depreciation and any other justifiable factors; and
(3) notwithstanding the foregoing determination of value for property taxation
purposes, the value for property taxation purposes of each item of property valued
under this subsection shall never be less than twelve and one-half percent of the
tangible property cost of such item of property so long as the property is used and
useful in a business activity.

# D.

Construction work in progress shall be valued at fifty percent of the actual
amounts expended and entered upon the accounting records of the taxpayer as of
December 31 of the preceding calendar year as construction work in progress.

# E.

The division may establish a schedule value for the same or similar kinds of
property to be valued under Subsection C of this section for property taxation purposes.
In arriving at a schedule value, the division shall:
(1) determine the average unit tangible property cost of a substantial sample
of the same or similar kinds of property;
(2) such unit average tangible property cost shall then be reduced by the
average related accumulated provision for depreciation per unit applicable to the
sample of the same or similar kinds of property and shall then be further reduced by an
average of other justifiable factors per unit applicable to the same or similar kinds of
property; and
(3) from the foregoing determination a schedule value for the same or similar
kinds of property shall be determined and set forth in a regulation adopted pursuant to
Section 7-38-88 NMSA 1978 [repealed].

# F.

The division shall adopt a schedule value for the following kinds of property:
(1) drilling rigs; and
(2) large off-the-road highway construction equipment.

# G.

Each item of property having a taxable situs in the state and valued under this
section shall have its net taxable value allocated to the governmental unit in which the
property is located.

# H.

The division shall adopt regulations under Section 7-38-88 NMSA 1978
[repealed] to implement the provisions of this section.