A. Every taxpayer shall pay estimated corporate income tax to the state of New Mexico during its taxable year if its tax after applicable credits is five thousand dollars ($5,000) or more in the current taxable year. A taxpayer to which this section applies shall calculate estimated tax by one of the following methods:
(1) estimating the amount of tax due, net of any credits, for the current taxable year, provided that the estimated amount is at least eighty percent of the amount determined to be due for the taxable year;
(2) using as the estimate an amount equal to one hundred percent of the tax due for the previous taxable year, if the previous taxable year was a full twelve-month year;
(3) using as the estimate an amount equal to one hundred ten percent of the tax due for the taxable year immediately preceding the previous taxable year, if the taxable year immediately preceding the previous taxable year was a full twelve-month year and the return for the previous taxable year has not been filed and the extended due date for filing that return has not occurred at the time the first installment is due for the taxable year; or
(4) estimating the amount of tax due, net of any credits, for each fiscal quarter of the current taxable year, provided that the estimated amount is at least eighty percent of the amount determined to be due for that quarter.
B. If Subsection A of this section applies, the amount of estimated tax shall be paid in installments as provided in this subsection. Twenty-five percent of the estimated tax calculated under Paragraph (1), (2) or (3) of Subsection A of this section or one hundred percent of the estimated tax calculated under Paragraph (4) of Subsection A of this section is due on or before the following dates: the fifteenth day of the fourth month of the taxable year, the fifteenth day of the sixth month of the taxable year, the fifteenth day of the ninth month of the taxable year and the fifteenth day of the twelfth month of the taxable year. Application of this subsection to a taxable year that is a fractional part of a year shall be determined by regulation of the secretary.
C. Every taxpayer to which Subsection A of this section applies that fails to pay the estimated tax when due or that makes estimated tax payments during the taxable year that are less than the lesser of eighty percent of the income tax imposed on the taxpayer under the Corporate Income and Franchise Tax Act or the amount required by Paragraph (2), (3) or (4) of Subsection A of this section shall be subject to the interest and penalty provisions of Sections 7-1-67 and 7-1-69 NMSA 1978 on the underpayment.
D. For purposes of this section, the amount of underpayment shall be the excess of the amount of the installment that would be required to be paid if the estimated tax were equal to eighty percent of the tax shown on the return for the taxable year or the amount required by Paragraph (2), (3) or (4) of Subsection A of this section or, if no return was filed, eighty percent of the tax for the taxable year for which the estimated tax is due less the amount, if any, of the installment paid on or before the last date prescribed for payment.
E. For purposes of this section, the period of underpayment shall run from the date the installment was required to be paid to whichever of the following dates is earlier:
(1) the fifteenth day of the third month following the end of the taxable year; or
(2) with respect to any portion of the underpayment, the date on which such portion is paid. For the purposes of this paragraph, a payment of estimated tax on any installment date shall be applied as a payment of any previous underpayment only to the extent such payment exceeds the amount of the installment determined under Subsection D of this section due on such installment date.
F. For the purposes of this section, the amount of tax deducted and withheld with respect to a taxpayer under the Withholding Tax Act [Chapter 7, Article 3 NMSA 1978] or the Oil and Gas Proceeds and Pass-Through Entity Withholding Tax Act [Chapter 7, Article 3A NMSA 1978] shall be deemed a payment of estimated tax. An equal amount of the amount of withheld tax shall be deemed paid on each due date for the applicable taxable year unless the taxpayer establishes the dates on which all amounts were actually withheld, in which case the amounts withheld shall be deemed payments of estimated tax on the dates on which the amounts were actually withheld. The taxpayer may apply the provisions of this subsection separately to amounts withheld under the Withholding Tax Act or the Oil and Gas Proceeds and Pass-Through Entity Withholding Tax Act. Amounts of tax paid by taxpayers pursuant to Section 7-3A-3 NMSA 1978 shall not be deemed a payment of estimated tax.
History: 1978 Comp., § 7-2A-9.1, enacted by Laws 1986, ch. 5, § 1; 1990, ch. 49, § 13; 1992, ch. 78, § 4; 1995, ch. 11, § 7; 1997, ch. 60, § 1; 2003, ch. 86, § 2; 2003, ch. 295, § 1; 2009, ch. 4, § 1; 2010, ch. 53, § 2.
ANNOTATIONSThe 2010 amendment, effective May 19, 2010, in Subsection F, in the first and third sentences, after "Oil and Gas Proceeds", added "and Pass-Through Entity"; and added the last sentence.
Applicability. — Laws 2010, ch. 53, § 19 provided that the provisions of this act are applicable to taxable years beginning on or after January 1, 2011.
The 2009 amendment, effective February 6, 2009, in Subsection B, provided that the payment date for the first quarterly payment of estimated corporate income tax is the fifteenth day of the fourth month of the taxable year; and in Subsection F, provided that the amount of the tax deducted and withheld under the Withholding Tax Act is a payment of estimated tax and added the last sentence.
Temporary provisions. — Laws 2009, ch. 4, § 2, provided that for estimated payments due on or before April 15, 2009, pursuant to Section 7-2A-9.1 NMSA 1978, a taxpayer shall remit at least one-eighth of the annual estimated taxes due for the taxable year in lieu of the one-fourth that is required in that section. The remainder of the annual estimated taxes due in the first quarter shall be remitted in addition to the taxpayer's second-quarter payment by June 15, 2009.
The 2003 amendment, effective June 20, 2003, in Subsection A substituted "is" for "for such taxable year can reasonably be expected to be" following "applicable credits" near the middle of the first sentence and added "in the current taxable year" at the end of the first sentence; deleted "and if the amount due for that previous taxable year was at least five thousand dollars ($5,000); or" at the end of Paragraph A(2); deleted "the amount due for the taxable year immediately preceding the previous taxable year was at least five thousand dollars ($5,000)" following "a full twelve-month year" in Paragraph A(3); added Paragraph A(4); in Subsection B, substituted "provided in this subsection. Twenty-five percent of the estimated tax calculated under Paragraph (1), (2), or (3) of Subsection A of this section or one hundred percent of the estimated tax calculated under Paragraph (4) of Subsection A of this section is due on or before the following dates" for "follows: twenty-five percent of the estimated tax is due on or before the fifteenth day of the fourth month of the taxable year, another twenty-five percent is due on or before", deleted "another twenty-five percent is due on or before" following "sixth month of the taxable year,", and deleted "the final twenty-five percent is due on or before" following "ninth month of the taxable year and"; inserted "or (4)" following "(3)" near the middle of Subsections C and D.
The 1997 amendment, effective June 20, 1997, rewrote Paragraph A(2), and added Paragraph A(3) and made related stylistic changes.
The 1995 amendment, effective June 16, 1995, inserted "the greater of five thousand dollars ($5,000)" in Subsection A(2), substituted "the amount required by Paragraph (2) of Subsection A of this section" for "one hundred percent of the tax liability for the previous taxable year" in Subsections C and D, and made a stylistic change.
The 1992 amendment, effective May 20, 1992, added the second sentence of Subsection A; and, in Subsection C, substituted "the lesser of eighty percent of the income tax" for "eighty percent of the tax", substituted "Corporate Income and Franchise Tax Act" for "Corporate Income Tax Act", and inserted "or one hundred percent of the tax liability for the previous taxable year".
The 1990 amendment, effective May 16, 1990, inserted "after applicable credits" in Subsection A, substituted "secretary" for "director" at the end of Subsection B, redesignated former Paragraphs (1) and (2) of Subsection C as present Subsections D and E, designated former Subparagraphs (a) and (b) of Paragraph (C)(2) as present Paragraphs (1) and (2) of Subsection E; in Paragraph (2) of Subsection E, substituted "this paragraph" for "this subparagraph" and "Subsection D of this section" for "Paragraph (1) of this subsection"; and made a minor stylistic change in Subsection D.
Am. Jur. 2d, A.L.R. and C.J.S. references. — 71 Am. Jur. 2d State and Local Taxation § 596.
85 C.J.S. Taxation §§ 1777 et seq.