2023 New Mexico Statutes › Chapter 7 - Taxation › Article 26 - Severance Tax › Section 7-26-6 - Severance tax on coal; surtax.

A. The severance tax on coal is measured by the quantity of coal severed and saved. The taxable event is sale, transportation out of New Mexico or consumption of the coal, whichever first occurs. Upon each short ton (two thousand pounds) of coal severed and saved, there shall be imposed on the severer a severance tax. For the period commencing on July 1, 1982, the severance tax rate shall be:
(1) surface coal, fifty-seven cents ($.57); and
(2) underground coal, fifty-five cents ($.55).
B. The severance tax on coal shall be increased by a surtax, hereby imposed. The surtax shall be imposed on the unit of quantity of such product or natural resource at the following rates:
(1) surface coal, sixty cents ($.60); and
(2) underground coal, fifty-eight cents ($.58).
C. The surtax rate on coal shall be increased on July 1, 1994, and on July 1 of each succeeding year by an amount equal to the product of the dollar amount of the severance tax imposed on each ton of coal by a percentage equal to the percentage rise in the producer price index for coal from the calendar year 1992 to the calendar year just prior to the year in which the surtax rates are computed, but in no case shall the surtax rate be decreased. The rates so computed shall be computed by the department in April of 1994 and in April of each year thereafter and published on or before May 1, 1994 and on or before May 1 of each year thereafter.
If the producer price index for coal is substantially revised or if the base year used as an index of one hundred is changed, the department shall make an adjustment in the percentage used to compute the surtax rates that would produce results equivalent, as nearly as possible, to those that would have been obtained if the producer price index for coal had not been so revised or if the base year had not been changed. If this index ceases to become available, then a comparable index based upon changes in the price of coal shall be adopted by the department by regulation.
D. As used in this section:
(1) "producer price index for coal" means the commodity code 05-1 as reported annually by the bureau of labor statistics at the United States department of labor in their annual producer price indexes data;
(2) "surface coal" means coal that is severed using surface mining methods;
(3) "surface mining" means the extraction of coal from the earth by removing the material overlying a coal seam and then removing the coal by common methods, including, but not limited to, contour mining, strip mining, mountain top removal mining, box cut mining, open pit mining and area mining; and
(4) "underground coal" means all coal that is not surface coal.
History:
1978 Comp., § 7-26-6, enacted by Laws 1982, ch. 77, § 1; 1989, ch. 261, § 1; 1993, ch. 89, § 1.
ANNOTATIONS
Cross references.
— For intergovernmental coal severance tax credit,
see
7-29C-2 NMSA 1978.
For conservation tax on coal,
see
7-30-1 to 7-30-27 NMSA 1978.
The 1993 amendment,
effective June 18, 1993, substituted "1994" for "1993" in three places and "1992" for "1991" in one place in the first paragraph of Subsection C; substituted "producer price index for coal" for "consumer price index" in the first and second paragraphs of Subsection C; deleted the former first sentence of the second paragraph of Subsection C defining "consumer price index" and substituted "If the producer price index for coal" for "If the manner in which the consumer price index is determined" at the beginning of the current second paragraph of Subsection C; inserted current Paragraph (1) and redesignated former Paragraphs (1) to (3) as Paragraphs (2) to (4) in Subsection D; deleted "auger mining" following "strip mining" in Paragraph (3) of Subsection D; and made minor stylistic changes.
The 1989 amendment,
effective July 1, 1989, added "; surtax" to the section heading; in Subsection A deleted former Paragraph (1) which read: "for the period ending June 30, 1982, the tax rate shall be fifty-seven cents ($.57)", restructured former Paragraph (2) as the fourth sentence, redesignated former Subparagraphs (a) and (b) as Paragraphs (1) and (2), and made minor stylistic changes; added Subsections B and C; and redesignated former Subsection C as Subsection D.
Law reviews.
— For comment, "Constitutional Limitations On State Severance Taxes," see 20 Nat. Resources J. 887 (1980).
For comment, "An Outline For Development of Cost-Based State Severance Taxes," see 20 Nat. Resources J. 913 (1980).
Am. Jur. 2d, A.L.R. and C.J.S. references. —
Classification of coal for purposes of taxation, 24 A.L.R. 1225.