A. Every person required by the provisions of any statute administered by the department to keep records and documents and every taxpayer shall maintain books of account or other records in a manner that will permit the accurate computation of state taxes or provide information required by the statute under which the person is required to keep records.
B. Methods of accounting shall be consistent for the same business. A taxpayer engaged in more than one business may use a different method of accounting for each business.
C. Prior to changing the method of accounting in keeping books and records for tax purposes, a taxpayer shall first secure the consent of the secretary or the secretary's delegate. If consent is not secured, the department upon audit may require the taxpayer to compute the amount of tax due on the basis of the accounting method earlier used.
D. Prior to changing the method of reporting taxes, other than for changes required by law, a taxpayer shall first secure the consent of the secretary or the secretary's delegate. Consent shall be granted or withheld pursuant to the provisions of Section 7-4-19 NMSA 1978. If consent is not secured, the secretary or the secretary's delegate upon audit may require the taxpayer to compute the amount of tax due on the basis of the reporting method earlier used.
E. Upon the written application of a taxpayer and at the sole discretion of the secretary or the secretary's delegate, the secretary or the secretary's delegate may enter into an agreement with a taxpayer allowing the taxpayer to report values, gross receipts, deductions or the value of property on an estimated basis for gross receipts and compensating tax, oil and gas severance tax, oil and gas conservation tax, oil and gas emergency school tax and oil and gas ad valorem production tax purposes for a limited period of time not to exceed four years. As used in this section, "estimated basis" means a methodology that is reasonably expected to approximate the tax that will be due over the period of the agreement using summary rather than detail data or alternate valuation applications or methods, provided that:
(1) nothing in this section shall be construed to require the secretary or the secretary's delegate to enter into such an agreement; and
(2) the agreement must:
(a) specify the receipts, deductions or values to be reported on an estimated basis and the methodology to be followed by the taxpayer in making the estimates;
(b) state the term of the agreement and the procedures for terminating the agreement prior to its expiration;
(c) be signed by the taxpayer or the taxpayer's representative and the secretary or the secretary's delegate; and
(d) contain a declaration by the taxpayer or the taxpayer's representative that all statements of fact made by the taxpayer or the taxpayer's representative in the taxpayer's application and the agreement are true and correct as to every material matter.
F. The secretary may, by regulation, require any person doing business in the state to submit to the department information reports that are considered reasonable and necessary for the administration of any provision of law to which the Tax Administration Act applies.
History: 1953 Comp., § 72-13-27, enacted by Laws 1965, ch. 248, § 15; 1971, ch. 276, § 6; 1979, ch. 144, § 9; 1982, ch. 18, § 9; 1983, ch. 211, § 22; 1993, ch. 30, § 5; 2001, ch. 16, § 3; 2007, ch. 275, § 1.
ANNOTATIONSCross references. — For inspection of books of taxpayers, see 7-1-11 NMSA 1978.
The 2007 amendment, effective July 1, 2007, amends Subsection E to permit oil and gas severance tax, oil and gas conservation tax, oil and gas emergency school tax and oil and gas ad valorem production tax to be reported on an estimated basis.
The 2001 amendment, effective July 1, 2001, added present Subsection E and renumbered the remaining subsection accordingly.
The 1993 amendment, effective June 18, 1993, substituted "department" for "division" in Subsections A and E; substituted "secretary or the secretary's delegate" for "director or his delegate" in Subsection C and in two places in Subsection D; substituted "department" for "director or his delegate" in the second sentence of Subsection C; substituted "secretary" for "director" in Subsection E; and made minor stylistic changes.
Adequacy of taxpayer's books and records is question of fact and the fact that taxpayer, in the hearing before the commissioner (now secretary), introduced evidence that his books and records were adequate did not require a ruling, as a matter of law, that they were adequate. Waldroop v. O'Cheskey, 1973-NMCA-146, 85 N.M. 736, 516 P.2d 1119.
Director's (now secretary's) decision conclusive if more than one inference possible. — If more than one inference can reasonably be drawn from the evidence, then the determination made by the commissioner (now secretary) that the books and records were inadequate is conclusive. Waldroop v. O'Cheskey, 1973-NMCA-146, 85 N.M. 736, 516 P.2d 1119.
Taxpayer has duty to provide director (now secretary) with books and records upon which to establish a standard for taxation as provided by law. If he fails to do so, he cannot complain of the best methods used by the commissioner (now secretary). Archuleta v. O'Cheskey, 1972-NMCA-165, 84 N.M. 428, 504 P.2d 638.