New Mexico Administrative Code › Title 3 - TAXATION › Chapter 6 - PROPERTY TAXES › Part 5 - CLASSIFICATION OF PROPERTY › Section 3.6.5.31 - SPECIAL METHOD OF VALUATION - MINERAL PROPERTY AND PROPERTY USED IN CONNECTION WITH MINERAL PROPERTY - POTASH

Current through Register Vol. 35, No. 13, July 16, 2024
A.
POTASH MINERAL PROPERTY - MARKET
				VALUE:
(1) The "market value of all
				mineral production from potash mineral property" as that phrase is used in
				Subsections B, D, and E of Section
				7-36-24
				NMSA 1978, means the amount for which all mineral production from potash
				mineral property was sold during the year prior to the tax year provided that
				the sale or sales were between willing buyers and sellers in the open market in
				the usual and ordinary course of trade and competition and both seller and
				buyer were equally free to bargain. The phrase "all mineral production from
				potash mineral property" includes minerals produced other than
				potash.
(2) If the market value of
				all or a part of the mineral production from potash mineral property for the
				year prior to the tax year cannot be determined under the preceding paragraph
				because the mineral production is not sold, is used or consumed or is not sold
				under the conditions described in Paragraph (1) of Subsection A of Section
				3.6.5.31 NMAC, then the market value of the mineral production is that
				reflected by sales of comparable mineral production from potash mineral
				property and the application of generally accepted appraisal techniques. In
				using the method of valuation described in this paragraph, the division
				considers and makes appropriate adjustments to the value reflected by sales of
				comparable mineral production from potash mineral property to account for the
				existence of a demand for, and the accessibility of a market for, the mineral
				production. In determining market value under this method, the division
				compares the gross income from the property determined for federal income tax
				purposes under Section 613 of the United States Internal Revenue Code of 1986,
				as amended or renumbered. Section 3.6.5.31 NMAC, however, does not adopt the
				valuation methods described in the United States treasury regulations for
				Section 613, unless specifically indicated herein.
(3) If the market value of all or a part of
				the mineral production for the year prior to the tax year cannot be determined
				under the methods set forth in Paragraphs (1) and (2) of Subsection A of
				Section 3.6.5.31 NMAC, then the market value is determined through the use of
				the "proportionate profits method" as that phrase is described in United States
				treasury regulations, Section 1.613-3, as amended or renumbered.
(4) The market value of muriate of potash and
				sulphate of potash magnesia "fines" used in the manufacture of potassium
				sulphate, although subgrade mineral products without a commercial market, is
				determined on the basis of a computed sales price between that portion of a
				taxpayer which produces the fines and that portion of the same taxpayer which
				subsequently processes the fines. This computed sales price is determined by
				use of a formula which takes into consideration the relevant factors generally
				used in valuing the fines including, for example, but not as a limitation, the
				processing costs, mineral content and particle size of the fines.