SB 146 — TAX ADMINISTRATION CHANGES

(1) when a return of a taxpayer is received by the department showing a liability for taxes;

(2) when a document denominated "notice of assessment of taxes", issued in the name of the secretary, is mailed or delivered in person to the taxpayer against whom the liability for tax is asserted, stating the nature and amount of the taxes assertedly owed by the taxpayer to the state, demanding of the taxpayer the immediate payment of the taxes and briefly informing the taxpayer of the remedies available to the taxpayer;

or (3) when an effective jeopardy assessment is h made as provided in the Tax Administration Act.

u » r t h C.

Any assessment of taxes or demand for payment g e l i made by the department is presumed to be correct.

h r i s D.

When taxes have been assessed to any taxpayer h , e h t u g and remain unpaid, the secretary or the secretary's delegate e b l e e , gh may demand payment at any time except as provided otherwise by n d d i = = o h l ] b ,d Section 7-1-19 NMSA 1978." i a º r e r = SECTION 2.

Section 7-1-24 NMSA 1978 (being Laws 1965, t e w d m a n o d m :

b r e t º o t n = .223113.3SAAIC March 20, 2023 (12:15pm) s k m e - 7 - e a n e d r e l u [ A d Chapter 248, Section 26, as amended) is amended to read:

"7-1-24.

DISPUTING LIABILITIES--ADMINISTRATIVE PROTEST.-- A.

A taxpayer may dispute:

(1) the assessment to the taxpayer of any amount of tax over fifty dollars ($50.00);

(2) the application to the taxpayer of any provision of the Tax Administration Act except the issuance of a subpoena or summons;

or (3) the denial of or failure either to allow or to deny a:

(a) credit or rebate;

or (b) claim for refund made in accordance with Section 7-1-26 NMSA 1978.

B.

The taxpayer may dispute a matter described in Subsection A of this section by filing with the secretary a written protest that:

h g (1) identifies the taxpayer and the tax o t hr credit, rebate, property or provision of the Tax Administration g e i k Act involved;

h r i s h (2) states the grounds on which the protest is , t, e u g based and summarizes evidence supporting each ground asserted;

e b l e e h and n d d i = = o h l ] b ,d (3) states the affirmative relief requested.

i a º e r i = r C.

A taxpayer may amend a statement made by the t e w d m a n o d m :

b e d s º o t n = .223113.3SAAIC March 20, 2023 (12:15pm) s k m e - 8 - e a n e d r e l u [ A d taxpayer in accordance with Paragraphs (2) and (3) of Subsection B of this section at any time prior to ten days before the hearing conducted on the protest in accordance with the Administrative Hearings Office Act or, if a scheduling order has been issued, in accordance with the scheduling order.

The secretary may, in appropriate cases, provide for an informal conference before a hearing of the protest is set by the administrative hearings office or before acting on a claim for refund.

D.

A taxpayer may file a protest, in the case of an assessment of tax by the department, without making payment of the amount assessed;

provided that, if only a portion of the assessment is in dispute, any unprotested amounts of tax, interest or penalty shall be paid, or, if applicable, an installment agreement pursuant to Section 7-1-21 NMSA 1978 shall be entered into for the unprotested amounts, on or before h the due date for the protest.

u » r t h E.

A protest by a taxpayer shall be filed within g e l i ninety days after:

h r i s (1) the date of the mailing to the taxpayer by h , e h t u g the department of the notice of assessment and demand for e b l e e , gh payment as provided in Subsection A or D of Section 7-1-17 NMSA n d d i = = o h l ] b ,d 1978;

i a º r e r = (2) the mailing of the other peremptory notice t e w d m a n o d m :

b r e t º o t n = .223113.3SAAIC March 20, 2023 (12:15pm) s k m e - 9 - e a n e d r e l u [ A d or demand;

(3) the date of the application to the taxpayer of the applicable provision of the Tax Administration Act;

or (4) the date of denial of a claim pursuant to Section 7-1-26 NMSA 1978 or the last date upon which the department was required to take action on the claim but failed to take action.

F.

If a taxpayer fails to timely protest an assessment of tax, penalty or interest:

(1) the undisputed amount of tax assessed and not protested becomes final;

(2) the taxpayer is deemed to have waived the right to protest the assessment, unless the taxpayer pays the tax and claims a refund of the tax pursuant to Section 7-1-26 NMSA 1978;

and h (3) the secretary may proceed to enforce u » r t h collection of the tax if the taxpayer is delinquent as defined g e l i by Section 7-1-16 NMSA 1978.

h r i s G.

The fact that the department did not mail the h , e h t u g assessment or other peremptory notice or demand by certified or e b l e e , gh registered mail or otherwise demand and receive acknowledgment n d d i = = o h l ] b ,d of receipt by the taxpayer shall not be deemed to demonstrate i a º r e r = the taxpayer's inability to protest within the required time.

t e w d m a n o d m :

b r e t º o t n = .223113.3SAAIC March 20, 2023 (12:15pm) s k m e - 10 - e a n e d r e l u [ A d H.

A proceeding other than one to enforce collection of an amount assessed as tax and to protect the interest of the state by injunction, as provided by Sections 7-1-31, 7-1-33, 7-1-34, 7-1-40, 7-1-53, 7-1-56 and 7-1-58 NMSA 1978, is not stayed by timely filing of a protest in accordance with this section.

I.

Nothing in this section shall be construed to authorize a criminal proceeding or to authorize an administrative protest of the issuance of a subpoena or summons."»Sfl1 SECTION Sfl1ºSFCº3.»SFC SFCº1.»SFC»Sfl1 Sfl1º3.»Sfl1 Section 7-1-29.2 NMSA 1978 (being Laws 2003, Chapter 398, Section 10) is amended to read:

CREDIT CLAIMS.--[AnyCLAIMS.-- ] A.

A taxpayer who [requests approval of] submits a complete application for a [statutory] tax credit is deemed to h have received [such ] approval of the application if the g o t hr [request] application has not been granted or denied within one g e i k hundred [eighty ] twenty days of the date it was filed.

Nothing h r i s in this section shall be construed to prevent the department h , t, e u g from auditing taxes paid or from assessing taxes owed, e b l e e h including any tax resulting from tax credits found not to be n d d i = = o h valid.

l ] b ,d i a º e r i = r B.

A taxpayer who believes that the taxpayer is t e w d m a n o eligible to receive a tax credit may apply for approval of the dcredit mby :directing to the secretary a complete application on the form and in the manner prescribed by the department.

b e d s º o t n = .223113.3SAAIC March 20, 2023 (12:15pm) s k m e - 11 - e a n e d r e l u [ A d credit by directing to the secretary a complete application on the form and in the manner prescribed by the department.

SB 146 Page 6 D.

The secretary or the secretary's delegate may h approve or deny an application for a tax credit in whole or in u » r part.

An approval or denial by the secretary or the t h g e secretary's delegate shall be in writing.

If the application l i h r i s is denied in whole or in part, the taxpayer shall not refile h , e h the denied application, but the taxpayer, within one hundred t u g e b l twenty days after the mailing or delivery of the denial of all e e , gh n d d i = = o h or any part of the application, may elect to pursue only one of l ] b ,d i a º r the remedies provided in this subsection.

A taxpayer who e r = t e w d timely pursues more than one remedy is deemed to have elected mthe afirst nremedy orequested. d m :

b r e t º o t n = .223113.3SAAIC March 20, 2023 (12:15pm) s k m e - 12 - e a n e d r e l u [ A d the first remedy requested.

(b) an allegation that, because of the denial, the state is indebted to the taxpayer for a specified SB 146 Page 7 amount, including any allowed interest;

h alleging that on account of the denial, the state is indebted g o to the taxpayer for a specified amount, together with any t hr g e i k interest allowable;

demanding approval of the application for h r i s the tax credit of that amount;

and reciting the facts of the h , t, application for the tax credit.

The taxpayer or the secretary e u g e b l may appeal from any final decision or order of the district e e h n d d i = = o h court to the court of appeals." l ] b ,d i a º e SECTION Sfl1ºSFCº4.»SFC4. SFCº2.»SFC»Sfl1 Sfl1º4.»Sfl1 r i = r t e w d Section 7-1-73 NMSA 1978 (being Laws 1965, Chapter 248, Section m a n o d m :

bSection e7-1-73 dNMSA s1978 º(being oLaws t1965, nChapter =248, .223113.3SAAICSection March 20, 2023 (12:15pm) s k m e - 13 - e a n e d r e l u [ A d 74, as amended) is amended to read:

(1) willfully makes and subscribes any return, statement or other document that contains or is verified by a written declaration that it is true and correct as to every material matter and that the person does not believe it to be true and correct as to every material SB 146 Page 8 matter;

h (a) the taxpayer or other person liable g o t hr for taxes owed on the return;

or g e i k (b) a person who signs a document h r i s stating that the return, affidavit, claim or other document is h , t, true, correct and complete to the best of that person's e u g e b l e e h knowledge;

n d d i = = o h (3) files any return electronically, knowing l ] b ,d i a º e the information in the return is not true and correct as to r i = r t e w d m a n o every material matter;

[or(4) ]with dintent mto :evade or defeat the payment or collection of any tax, or, knowing that the probable consequences of the person's act will be to evade or defeat the payment or collection of any tax, removes, conceals or releases any property on which levy is authorized or that is liable for payment of tax under the provisions of SB 146 Page 9 Section 7-1-61 NMSA 1978, or aids in accomplishing or causes the accomplishment of any of the foregoing;

b e d s º o t n = .223113.3SAAIC March 20, 2023 (12:15pm) s k m e - 14 - e a n e d r e l u [ A d (4) with intent to evade or defeat the payment or collection of any tax, or, knowing that the probable consequences of the person's act will be to evade or defeat the payment or collection of any tax, removes, conceals or releases any property on which levy is authorized or that is liable for payment of tax under the provisions of Section 7-1-61 NMSA 1978, or aids in accomplishing or causes the accomplishment of any of the foregoing;

or (6) with the intent to evade or defeat the payment or collection of any tax, or, knowing that the probable consequences of the person's act will be to evade or defeat the h payment or collection of any tax, sells, licenses, purchases, u » r installs, transfers, sells as a service, manufactures, develops t h g e l i or possesses any sales suppression software with the purpose to h r i s defeat or evade the payment or collection of any tax.

h , e h B.

Whoever commits tax fraud when the amount of the t u g e b l e e , gh tax owed is two hundred fifty dollars ($250) or less is guilty n d d i = = o h of a petty misdemeanor and shall be sentenced pursuant to the l ] b ,d i a º r provisions of Section 31-19-1 NMSA 1978.

e r = t e w d m a n o C.

Whoever commits tax fraud when the amount of the dtax mowed :is over two hundred fifty dollars ($250) but not more than five hundred dollars ($500) is guilty of a misdemeanor and shall be sentenced pursuant to the provisions of Section 31-19-1 NMSA 1978.

b r e t º o t n = .223113.3SAAIC March 20, 2023 (12:15pm) s k m e - 15 - e a n e d r e l u [ A d tax owed is over two hundred fifty dollars ($250) but not more than five hundred dollars ($500) is guilty of a misdemeanor and shall be sentenced pursuant to the provisions of Section 31-19-1 NMSA 1978.

Whoever commits tax fraud when the amount of SB 146 Page 10 the tax owed is over five hundred dollars ($500) but not more than two thousand five hundred dollars ($2,500) is guilty of a fourth degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978.

Whoever commits tax fraud when the amount of the tax owed is over twenty thousand dollars ($20,000) is guilty of h a second degree felony and shall be sentenced pursuant to the u » r provisions of Section 31-18-15 NMSA 1978.

t h g e l i G.

In addition to the fines imposed pursuant to h r i s this section, a person who commits tax fraud shall pay the h , e h costs of the prosecution of the person's case.

t u g e b l e e , gh H.

n d d i = = o h (1) "sales suppression software" means hidden l ] b ,d i a º r or concealed computer software, also known as phantomware, for ea rpoint-of-sale =system tthat ecan wcreate da msecond aset nof orecords aor point-of-saleeliminate systemor manipulate transaction records that canmay createor amay secondnot setbe preserved in digital formats in order to misrepresent the existence or the true record of recordsa dtransaction min :the point-of-sale system.

b"Sales rsuppression esoftware" tincludes ºan oelectronic tdevice nSB =146 .223113.3SAAICPage March11 20, 2023 (12:15pm) s k m e - 16 - e a n e d r e l u [ A d or eliminate or manipulate transaction records that maycarries or maycontains notsales besuppression preservedsoftware; in digital formats in order to misrepresent the existence or the true record of a transaction in the point- of-sale system.

"Sales(2) suppression"tax" software"does includesnot aninclude electroniccivil devicepenalties that carries or containsinterest; sales suppression software;

[(1)]and (2)(3) "tax""willfully" doesmeans notintentionally, includedeliberately civilor penaltiespurposely, orbut interest;not necessarily maliciously." SECTION 5.

and [(2)] (3) "willfully" means intentionally, deliberately or purposely, but not necessarily maliciously." SECTION Sfl1º SFCº5.»SFC SFCº3.»SFC»Sfl1 Sfl1º5.»Sfl1 Section 7-38-21 NMSA 1978 (being Laws 1973, Chapter 258, Section 61, as amended) is amended to read:

A property owner may protest the value or h classification determined by the county assessor for the g o t hr property owner's property for property taxation purposes, the g e i k allocation of value of the property to a particular h r i s governmental unit or a denial of a claim for an exemption or h , t, for a limitation on increase in value either by:

e u g e b l e e h (1) filing a petition with the county assessor n d d i = = o h as provided in the Property Tax CodeCode; [a petition of protest l ] b ,d i a º e with:

r i = r t e w d m a n o (a) the administrative hearings office;

d m :

b e d s º o t n = .223113.3SAAIC March 20, 2023 (12:15pm) s k m e - 17 - e a n e d r e l u [ A d or (b) the county assessor];

SB 146 Page 12 C.

A property owner may also protest the application to the property owner's property of any administrative fee adopted pursuant to Section 7-38-36.1 NMSA 1978 by filing a claim for refund after paying the property owner's taxes as provided in the Property Tax Code." SECTION Sfl1º6. SFCº6.»SFC SFCº4.»SFC»Sfl1 Sfl1º6.»Sfl1 A new Section 7-38-21.1 NMSA 1978 is enacted to read:

hA "7-38-21.1.new Section 7-38-21.1 NMSA 1978 is enacted to read:

[NEW"7-38-21.1. MATERIAL] PROTESTS--STATE-ASSESSED g o t hr PROPERTY--ELECTION OF REMEDIES.-- g e i k A.

APROTESTS--STATE-ASSESSED propertyPROPERTY--ELECTION ownerOF mayREMEDIES.-- protestA. the value or h r i s classification determined by the department for the property h , t, owner's property for property taxation purposes, the allocation e u g e b l e e h of value of the property to a particular governmental unit or a n d d i = = o h denial of a claim for an exemption by:

lA ]property bowner ,dmay iprotest athe ºvalue eor (1)classification filingdetermined aby petitionthe ofdepartment protestfor with the rproperty iowner's =property rfor tproperty etaxation wpurposes, dthe mallocation aof nvalue oof administrativethe hearingsproperty office,to asa providedparticular ingovernmental theunit Propertyor Taxa ddenial mof :a claim for an exemption by:

b(1) efiling da spetition ºof oprotest twith nthe =administrative .223113.3SAAIChearings Marchoffice, 20,as 2023provided (12:15pm)in sthe kProperty mTax e - 18 - e a n e d r e l u [ A d Code;

The initiation of a protest under Paragraph (1) of Subsection A of this section is an election to pursue that remedy and is an unconditional and irrevocable waiver of the right to pursue the alternative remedy provided in Paragraph (2) of Subsection A of this section." SECTIONSB Sfl1º146 SFCº7.»SFCPage SFCº5.»SFC»Sfl113 Sfl1º7.»Sfl1SECTION Section7. 7-38-22 NMSA 1978 (being Laws 1973, Chapter 258, Section 62, as amended) is amended to read:

Section 7-38-22 NMSA 1978 (being Laws 1973, Chapter 258, Section 62, as amended) is amended to read:

PROTESTING VALUES, CLASSIFICATION, ALLOCATION OF VALUES AND DENIAL OF EXEMPTION DETERMINED BY THE [DIVISION]DEPARTMENT.-- DEPARTMENT .-- A.

A property owner may protest the value or h classification determined by the [division ] department for the g o t hr property owner's property for property taxation purposes or the g e i k [division's ] department's allocation of value of the property h r i s owner's property to a particular governmental unit or the h , t, denial of a claim for an exemption by filing a petition with e u g e b l e e h the administrative hearings office.

Filing a petition in n d d i = = o h accordance with this section entitles a property owner to a l ] b ,d i a º e hearing on the property owner's protest.

r i = r t e w d m a n o B.

d(1) mbe :filed no later than thirty days after:

b(a) ethe dmailing sby ºthe odepartment tof nthe =notice .223113.3SAAICof Marchvaluation; 20, 2023 (12:15pm) s k m e - 19 - e a n e d r e l u [ A d (1) be filed no later than thirty days after:

(a) the mailing by the [division] department of the notice of valuation;

(3) state why the property owner believes the value, classification, allocation of value or denial of SB 146 Page 14 an exemption is incorrect and what the property owner believes the correct value, classification, allocation of value or exemption to be;

and (5) contain such other information as the h administrative hearings office may by rule require.

g o t hr C.

The administrative hearings office shall notify g e i k the [director ] secretary and the property owner by certified h r i s mail of the date, time and place that the parties may appear h , t, before the administrative hearings office to present evidence e u g e b l e e h related to the petitionpetition; STBTCº ;

provided that the parties may n d d i = = o h request, consent or agree to an alternative service method for l ] b ,d i a º e the notice of hearing»STBTChearing. .

The notice shall be rsent i = r t e w d m a n o STBTCºmailed»STBTC STBTCºsent»STBTC at least fifteen days dprior mto :the hearing date.

b e d s º o t n = .223113.3SAAIC March 20, 2023 (12:15pm) s k m e - 20 - e a n e d r e l u [ A d prior to the hearing date.

The [director] secretary may provide for an informal conference on the protest before the hearing." SECTION Sfl1º8. SFCº8.»SFC SFCº6.»SFC»Sfl1 Sfl1º8.»Sfl1 Section 7-38-28 NMSA 1978 (being Laws 1973, Chapter 258, Section 68, as amended) is amended to read:

Section 7-38-28 NMSA 1978 (being Laws 1973, Chapter 258, Section 68, as amended) is amended to read:

APPEALS FROM ORDERS OF THE [HEARING OFFICER OR] COUNTY VALUATION PROTESTS BOARDS.--[A.BOARDS.--A property owner may appeal an order made by a county valuation protests board by filing an appeal pursuant to the provisions of Section 39-3-1.1 NMSA 1978." SECTION 9.

] A propertynew ownersection mayof appealChapter an7, orderArticle made38 bySB [a146 hearingPage officer15 orNMSA ]1978 ais countyenacted valuation protests board by filing an appeal pursuant to theread: provisions of Section 39-3-1.1 NMSA 1978.

[B."APPEALS FROM DECISIONS AND ORDERS OF THE HEARING OFFICER OF THE ADMINISTRATIVE HEARINGS OFFICE.-- A.

TheA directorproperty shallowner notifyor the appropriatesecretary countymay assessorappeal ofa the decision and order of thea districthearing courtofficer andof shall direct the assessoradministrative tohearings takeoffice appropriate action to comply with the decisioncourt andof order.]"appeals SECTIONfor Sfl1ºfurther SFCº9.»SFCrelief, SFCº7.»SFC»Sfl1but Sfl1º9.»Sfl1only hto Athe newsame sectionextent ofand Chapteron 7,the Articlesame 38theory NMSAas 1978was isasserted enactedin tothe ghearing obefore tthe hrhearing read:officer.

g e i k "[NEW MATERIAL] APPEALS FROM DECISIONS AND ORDERS OF THE h r i s HEARING OFFICER STBTCº OF THE ADMINISTRATIVE HEARINGS h , t, e u g OFFICE»STBTC .-- e b l e e h A.

A property owner or the secretary may appeal a n d d i = = o h decision and order of a hearing officer STBTCº of the l ] b ,d i a º e administrative hearings office»STBTC to the court of appeals r i = r t e w d m a n o for further relief, but only to the same extent and on the same d m :

b e d s º o t n = .223113.3SAAIC March 20, 2023 (12:15pm) s k m e - 21 - e a n e d r e l u [ A d theory as was asserted in the hearing before the hearing officer.

(2) not supported by substantial evidence in h the record;

or g o t hr (3) otherwise not in accordance with the SB 146 Page 16 law.

g e i k D.

If the secretary appeals a decision and order of h r i s the hearing officer and the court's decision, from which either h , t, no appeal is taken or no appeal may be taken, upholds the e u g e b l e e h decision of the hearing officer, the court shall award n d d i = = o h reasonable attorney fees to the property owner.

If the court's l ] b ,d i a º e decision upholds the hearing officer's decision only in part, r i = r t e w d m a n o the award shall be limited to reasonable attorney fees dassociated mwith :the portion upheld.

b e d s º o t n = .223113.3SAAIC March 20, 2023 (12:15pm) s k m e - 22 - e a n e d r e l u [ A d associated with the portion upheld.

The secretary shall notify the appropriate county assessor of any decision and order or appellate court opinion and shall direct the assessor to take appropriate action to comply with the decision and order." SECTION Sfl1º10. SFCº10.»SFC SFCº8.»SFC»Sfl1 Sfl1º10.»Sfl1 EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2023.

-EFFECTIVE 23DATE.--The -effective »date gof othe »provisions rof hthis tact iis kJuly l1, i2023. g t h s , e h t l i w l b l e e , gh n d l h = = b , a l º d i a r e r = , a t e d m a n o d m :

bSB r146 ePage t17 º25 o t n = .223113.3SAAIC March 20, 2023 (12:15pm) s k m e e a n e d r e l u [ A d