us-nm/stat
NMSA 1978, § 7-3A-3 — Withholding from oil and gas proceeds and net income
A.
Except as otherwise provided in this section, a remitter shall deduct and withhold
from each payment of oil and gas proceeds being made to a remittee for each quarter
an amount equal to the rate specified in Subsection D of this section multiplied by the
amount prior to withholding that otherwise would have been payable to the remittee.
B.
Except as otherwise provided in this section, a pass-through entity shall deduct
and withhold from each owner's allocable share of net income for that calendar year an
amount equal to the rate specified in Subsection D of this section multiplied by the
owner's allocable share of that net income, reduced, but not below zero, by the amount
required to be withheld from the owner's allocable share of net income under
Subsection A of this section.
C.
The obligation to deduct and withhold from payments or allocable net income as
provided in Subsections A and B of this section does not apply to payments that are
made to:
(1) a corporation whose principal place of business is in New Mexico or an
individual who is a resident of New Mexico;
(2) remittees with a New Mexico address as shown on internal revenue
service form 1099-Misc or a successor form or on a pro forma 1099-Misc or a
successor form for those entities that do not receive an internal revenue service form
1099-Misc;
(3) the United States, this state or any agency, instrumentality or political
subdivision of either;
(4) any federally recognized Indian nation, tribe or pueblo or any agency,
instrumentality or political subdivision thereof; or
(5) organizations that have been granted exemption from the federal income
tax by the United States commissioner of internal revenue as organizations described in
Section 501(c)(3) of the Internal Revenue Code. However, the obligation to deduct and
withhold from payments of allocable net income to organizations identified in this
paragraph applies if that income constitutes unrelated business income.
D.
Except as provided in Subsection H of this section, the rate of withholding shall
be set by a department directive; provided that the rate may not exceed the higher of
the maximum bracket rate set by Section 7-2-7 NMSA 1978 for the taxable year or the
maximum bracket rate set by Section 7-2A-5 NMSA 1978 for the taxable year; and
provided further that remitters shall be given ninety days' notice of a change in the rate.
E.
If a remitter receives oil and gas proceeds from which an amount has been
deducted and withheld pursuant to the Oil and Gas Proceeds and Pass-Through Entity
Withholding Tax Act or a pass-through entity has deducted and withheld an amount
pursuant to the Oil and Gas Proceeds and Pass-Through Entity Withholding Tax Act
from the allocable share of net income of an owner that is also a pass-through entity,
the remitter or payee pass-through entity may take credit for that amount in determining
the amount the remitter or payee pass-through entity must withhold and deduct
pursuant to this section.
F.
If the amount to be withheld from all payments to a remittee in a calendar quarter
has not exceeded thirty dollars ($30.00) and a payment to a remittee is less than ten
dollars ($10.00), no withholding is required. If the amount to be withheld from an
owner's allocable share of net income in any calendar year is less than one hundred
dollars ($100), no withholding is required.
G.
Except as provided in Subsection H of this section, at the option of a remitter or
pass-through entity, a remitter or pass-through entity may agree with a remittee or an
owner that the remittee or owner pay the amount that the remitter or pass-through entity
would have been required to withhold and remit to the department on behalf of the
remittee or owner pursuant to the Oil and Gas Proceeds and Pass-Through Entity
Withholding Tax Act. The payments by the remittee or owner shall be remitted on the
dates set forth in Section 7-3A-6 NMSA 1978 on forms and in the manner required by
the department.
H.
Excluding wages, a personal services business shall deduct and withhold an
amount equal to the owner's allocable share of net income multiplied by the highest rate
for single individuals provided in Section 7-2-7 NMSA 1978.
I.
If the remittee or owner is an insurance company and falls under the provisions
of Section 59A-6-6 NMSA 1978, no withholding is required pursuant to this section.
Source: official text