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F I S C A L I M P A C T R E P O R T
SPONSOR Smith
ORIGINAL DATE
LAST UPDATED
1-30-2006
HB
SHORT TITLE Public Inspection of Certain Tax Records
SB 312
ANALYST Dearing
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY06
FY07
NFI
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
LFC Files
Responses Received From
Taxation & Revenue Department (TRD)
Attorney General’s Office (AGO)
SUMMARY
Synopsis of Bill
Enactment of Senate Bill 312 would make two changes to the provisions of Section 7-1-29
NMSA 1978, which authorizes the Taxation and Revenue Department to make refunds and cred-
its of overpaid tax.
1. In cases where the Department applies a portion of a refund against an outstanding liabil-
ity of the taxpayer, the Department would be required to provide notice of this action to the tax-
payer. A taxpayer may be entitled to interest on the refund if it is not credited to the tax liability
within the time periods set out in Section 7-1-68. This provision was approved by the Legislature
and signed by the Governor as part of HB 64 of the 2003 Legislative Session. However, the same
section of statute was amended by another provision in a separate statute that was signed after
HB 64. Therefore, this provision was not incorporated into the statute.
2. Records of tax credits in excess of $10 thousand would be kept by the Department and
made available for inspection by the public.
pg_0002
Senate Bill 312 – Page
2
FISCAL IMPLICATIONS
Enactment of this legislation would incur no significant impact on state revenues. There is no
associated fiscal impact.
SIGNIFICANT ISSUES
SB 312 specifically includes within the right to inspect pursuant to the Inspection of Public Re-
cords Act records of tax “credits” made in excess of $10,000, records which are maintained by
the Taxation and Revenue Department, and requires the Department to keep such records for at
least three years. Currently, only records of tax “refunds” made in excess of $10,000 are specifi-
cally made subject to inspection.
While records of such tax “credits” may already be subject to inspection under the Inspection of
Public Records Act, SB 312 leaves no room for interpretation that such records are in fact spe-
cifically included within the scope of the Inspection of Public Records Act.
ADMINISTRATIVE IMPLICATIONS
The Taxation and Revenue Department has already adopted, as a matter of policy, the require-
ment to make notice of offsets and the requirement to pay out interest until the date the tax liabil-
ity is credited with the refund amount.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
Duplicates HB 388
Relates to SB 318
SB 312 relates to SB 318 as this bill, if enacted, would amend the current method of calculating
interest amounts paid on both under and over-payments of taxes by corporations and individuals.
TECHNICAL ISSUES
To completely reflect the content of the bill, the title could include reference to the requirement
to make notice of offsets and to pay out interest until the date the tax liability is credited with the
refund amount.
The proposed requirement raises a question about the application of a refund that the taxpayer
requests be carried forward. Currently, the Department does not pay interest if the taxpayer re-
quests to have the refund carried forward. The proposal could be made explicit as to whether this
policy should be continued.
The proposed amendment that would authorize release of information on tax credits could be in-
terpreted as conflicting with the confidentiality requirements in Section 7-1-8. To avoid possible
conflicts, an amendment to Section 7-1-8 could be included that would authorize the release of
the information as proposed in the current bill.
pg_0003
Senate Bill 312 – Page
3
OTHER SUBSTANTIVE ISSUES
According to Taxation and Revenue department, authorizing the department to publish informa-
tion on tax credits could provide additional information about the utilization of the credits. This
information could in turn help the Legislature evaluate whether the tax credits are achieving their
intended purposes.
WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL
There will remain some level of ambiguity as to whether tax “credits” made in excess of $10,000
are specifically subject to the Inspection of Public Records Act.
PD/mt