A. For the privilege of severing or processing in New Mexico natural resources that are owned by another person and are not otherwise taxed by Sections 7-25-4 and 7-25-5 NMSA 1978, there is imposed on the service charge of any person severing or processing natural resources that are owned by another person an excise tax at the same rate that would be imposed on an owner of natural resources for performing the same function.
B. The tax imposed by this section shall be referred to as the "service tax".
History: 1953 Comp., § 72-16A-25, enacted by Laws 1966, ch. 48, § 6; 1993, ch. 30, § 25.
ANNOTATIONSThe 1993 amendment, effective June 18, 1993, substituted "Sections 7-25-4 and 7-25-5 NMSA 1978" for "Sections 4 and 5 of the Resources Excise Tax Act" in Subsection A.
Severance alone does not give rise to taxable event. Yankee Atomic Elec. Co. v. N.M. & Ariz. Land Co., 632 F.2d 855 (10th Cir. 1980).
Severance and sale, transportation or consumption triggers tax. — Severance, coupled with the sale, transportation out of New Mexico, or consumption thereof triggers the imposition of the tax. Yankee Atomic Elec. Co. v. N.M. & Ariz. Land Co., 632 F.2d 855 (10th Cir. 1980).
Receipts from development work incidental to severing taxable under this section. — The exemption from the gross receipts tax provided by Section 7-9-35 NMSA 1978 applies when severing was taking place as the development work was performed and none of taxpayer's work was preliminary to or preparatory for severing; receipts from development work, which includes construction, are exempted from the gross receipts tax and taxable under the service tax provided by this section when such construction work is incidental to the severing. Patten v. Bureau of Revenue, 86 N.M. 355, 524 P.2d 527 (Ct. App. 1974).
Law reviews. — For comment, "Approaches to State Taxation of the Mining Industry," see 10 Nat. Resources J. 156 (1970).
For article, "New Mexico's Effort at Rational Taxation of Hard-Minerals Extraction," see 10 Nat. Resources J. 415 (1970).
For comment, "Taxation of the Uranium Industry: An Economic Proposal," see 7 N.M.L. Rev. 69 (1976-77).
Am. Jur. 2d, A.L.R. and C.J.S. references. — 71 Am. Jur. 2d State and Local Taxation §§ 218, 614.