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AN ACT

RELATING TO TAXATION; REQUIRING THE TAXATION AND REVENUE

DEPARTMENT TO KEEP AND TO MAKE AVAILABLE FOR PUBLIC INSPECTION

RECORDS OF CREDITS MADE IN EXCESS OF TEN THOUSAND DOLLARS

($10,000); RECONCILING MULTIPLE AMENDMENTS TO THE SAME SECTION

OF LAW IN LAWS 2003.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. Section 7-1-29 NMSA 1978 (being Laws 1965,

Chapter 248, Section 31, as amended by Laws 2003, Chapter 398,

Section 11 and by Laws 2003, Chapter 439, Section 4) is

amended to read:

"7-1-29. AUTHORITY TO MAKE REFUNDS OR CREDITS.--

A. In response to a claim for refund made as

provided in Section 7-1-26 NMSA 1978, but before a court

acquires jurisdiction of the matter, the secretary or the

secretary's delegate may authorize the refund to a person of

the amount of an overpayment of tax determined by the

secretary or the secretary's delegate to have been erroneously

made by the person, together with allowable interest. A

refund of tax and interest erroneously paid and amounting to

more than ten thousand dollars ($10,000) may be made to a

person only with the prior approval of the attorney general,

except that the secretary or the secretary's delegate may make

refunds with respect to:

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(1) the Oil and Gas Severance Tax Act, the

Oil and Gas Conservation Tax Act, the Oil and Gas Emergency

School Tax Act, the Oil and Gas Ad Valorem Production Tax Act,

the Natural Gas Processors Tax Act or the Oil and Gas

Production Equipment Ad Valorem Tax Act, Section 7-13-17 NMSA

1978 and the Cigarette Tax Act without the prior approval of

the attorney general regardless of the amount; and

(2) the Corporate Income and Franchise Tax

Act amounting to less than twenty thousand dollars ($20,000)

without the prior approval of the attorney general.

B. Pursuant to the final order of the district

court, the court of appeals, the supreme court of New Mexico

or a federal court, from which order, appeal or review is not

successfully taken, adjudging that a person has made an

overpayment of tax, the secretary shall authorize the refund

to the person of the amount thereof.

C. In the discretion of the secretary, any amount

of tax to be refunded may be offset against any amount of tax

for which the person due to receive the refund is liable. The

secretary or the secretary's delegate shall give notice to the

taxpayer that the refund will be made in this manner, and the

taxpayer shall be entitled to interest pursuant to Section

7-1-68 NMSA 1978 until the tax liability is credited with the

refund amount.

D. In an audit by the department or a managed

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audit covering multiple reporting periods in which both

underpayments and overpayments of a tax have been made in

different reporting periods, the department shall credit the

tax overpayments against the underpayments, provided that the

taxpayer files a claim for refund of the overpayments. An

overpayment shall be applied as a credit first to the earliest

underpayment and then to succeeding underpayments. An

underpayment of tax to which an overpayment is credited

pursuant to this section shall be deemed paid in the period in

which the overpayment was made or the period to which the

overpayment was credited against an underpayment, whichever is

later. If the overpayments credited pursuant to this section

exceed the underpayments of a tax, the amount of the net

overpayment for the periods covered in the audit shall be

refunded to the taxpayer.

E. When a taxpayer makes a payment identified to a

particular return or assessment, and the department determines

that the payment exceeds the amount due pursuant to that

return or assessment, the secretary may apply the excess to

the taxpayer's other liabilities pursuant to the tax acts to

which the return or assessment applies, without requiring the

taxpayer to file a claim for a refund. The liability to which

an overpayment is applied pursuant to this section shall be

deemed paid in the period in which the overpayment was made or

the period to which the overpayment was applied, whichever is

later.

F. If the department determines, upon review of an

original or amended income tax return, corporate income and

franchise tax return, estate tax return, special fuels excise

tax return or oil and gas tax return, that there has been an

overpayment of tax for the taxable period to which the return

or amended return relates in excess of the amount due to be

refunded to the taxpayer pursuant to the provisions of

Subsection J of Section 7-1-26 NMSA 1978, the department may

refund that excess amount to the taxpayer without requiring

the taxpayer to file a refund claim.

G. Records of refunds and credits made in excess

of ten thousand dollars ($10,000) shall be available for

inspection by the public. The department shall keep such

records for a minimum of three years from the date of the

refund or credit."

Section 2. EFFECTIVE DATE.--The effective date of the

provisions of this act is July 1, 2006. HB 388

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