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Department of Taxation and Finance

Survey of Railroad and Utility Taxation Practices Among the States: 2005 Update


  1. Basis for taxation:

    Market value, as determined by sales of comparable property. If that method cannot be used due to lack of comparable sales data for the property being valued, then its value shall be determined using an income method or cost methods of valuation. In using any of the methods of valuation authorized under Chapter 7 of the New Mexico Statutes Annotated the valuation authority shall apply generally accepted appraisal techniques.
  2. Property subject to taxation:

    Real property and tangible personalty; private railroad cars subject to corporate taxation are exempt from property taxation.
  3. Classification (if applicable):

    No. All taxable realty and personalty in New Mexico is assessed at one-third of value. However, property is classified into two categories: resident, and nonresident. These rates are uniform within each county.
  4. Level of government which determines basis for tax liability - ad valorem property tax:

    The New Mexico Taxation and Revenue Department (TRD) is responsible for centrally assessing all utility properties. Counties are responsible for centrally assessing nonsystem railroad property. After certifying assessed values to each
    county, tax billing is made by counties. At present counties are still responsible for assessing cable television property.
  5. Report filing and valuation method(s) required by statute for ad valorem taxation:

    Except for railroads, TRD first establishes the tangible property cost of each item of property; from such tangible property cost shall be deducted the related accumulated provision for depreciation and any other justifiable factors which further affect the tangible property value of each item of property, and the resulting net value may not be less than 20 percent of the cost of such property before depreciation. For system railroad property TRD conducts unit appraisals using: 1) capitalization of earnings, 2) market value of stock and debt, or 3) original cost less depreciation and obsolescence, 4) a combination of the above methods. Utilities are required to file information relevant to their system properties to TRD.
  6. Practical application of valuation method(s):

    A combination of the above methods is in fact used for railroad system valuation. Original cost analysis is the main method used for other utility properties. Values are correlated to arrive at a final system appraised value.
  7. Valuation treatment of large facilities such as power plants, dams, or rail yards:

    Power plants, including hydro-electric facilities, are valued using original cost methodology, and apportioned to the governmental units in which the property is located. Rail yards are valued using the unitary method for all railroad property. All of the above are state assessed.
  8. Apportionment method(s) required by statute:

    Net taxable value (adjusted for exemptions for non-system property assessed centrally) shall be apportioned to the governmental units in which the property is located.
  9. Practical application or apportionment requirements:

    System properties are allocated to the state primarily on the basis of original cost (less depreciation) and by net earnings capitalized. Value is then allocated to the state primarily by a fractional method whereby the numerator is total gross investment, gross operating incomes, wire miles, rail miles, number of communications access lines in New Mexico, and the denominator is the corresponding values throughout the utility system, both in and out of state. Values of situs-specific system properties are allocated to the respective subunit within the state. The remaining system value is allocated within the state according to wire miles, access miles, rail miles (main, branch, spur), or pipeline miles. Mileage figures are adjusted for physical characteristics and for density (e.g., ton-miles on a rail line). Pipeline values are adjusted for pipe size.
  10. Apportionment treatment of large facilities such as power plants, dams, or rail yards:

    Value is apportioned to the governmental units in which the property is located.
  11. Description of assessment appeals system:

    A taxpayer has 30 days from the notice of value date in which to file a protest. If they don't file a protest for whatever reason, they can pay the taxes in protest and file for a refund in district court in Santa Fe County.
  12. Status of deregulation/restructuring of electric generating and impact on valuation and apportionment methods used:

    The deregulation legislation for New Mexico was repealed before it was enacted due to deregulation difficulties that developed in California.
  13. State Government Staffing:

    Staff consists of nine employees (full-time equivalent basis).
    Law Source(s):     NMSA Chapter 7, Article 36, Sections 27-31.

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