Section 7-1-10 - Records required by statute; taxpayer records; accounting methods; reporting methods; information returns. - New Mexico Statutes

7-1-10. Records required by statute; taxpayer records; accounting methods; reporting methods; information returns.

A.     Every person required by the provisions of any statute administered by the department to keep records and documents and every taxpayer shall maintain books of account or other records in a manner that will permit the accurate computation of state taxes or provide information required by the statute under which the person is required to keep records.

B.     Methods of accounting shall be consistent for the same business.  A taxpayer engaged in more than one business may use a different method of accounting for each business.

C.     Prior to changing the method of accounting in keeping books and records for tax purposes, a taxpayer shall first secure the consent of the secretary or the secretary's delegate.  If consent is not secured, the department upon audit may require the taxpayer to compute the amount of tax due on the basis of the accounting method earlier used.

D.     Prior to changing the method of reporting taxes, other than for changes required by law, a taxpayer shall first secure the consent of the secretary or the secretary's delegate.  Consent shall be granted or withheld pursuant to the provisions of Section 7-4-19 NMSA 1978.  If consent is not secured, the secretary or the secretary's delegate upon audit may require the taxpayer to compute the amount of tax due on the basis of the reporting method earlier used.

E.     Upon the written application of a taxpayer and at the sole discretion of the secretary or the secretary's delegate, the secretary or the secretary's delegate may enter into an agreement with a taxpayer allowing the taxpayer to report values, gross receipts, deductions or the value of property on an estimated basis for gross receipts and compensating tax, oil and gas severance tax, oil and gas conservation tax, oil and gas emergency school tax and oil and gas ad valorem production tax purposes for a limited period of time not to exceed four years.  As used in this section, "estimated basis" means a methodology that is reasonably expected to approximate the tax that will be due over the period of the agreement using summary rather than detail data or alternate valuation applications or methods, provided that:  

(1)     nothing in this section shall be construed to require the secretary or the secretary's delegate to enter into such an agreement; and

(2)     the agreement must:

(a)     specify the receipts, deductions or values to be reported on an estimated basis and the methodology to be followed by the taxpayer in making the estimates;

(b)     state the term of the agreement and the procedures for terminating the agreement prior to its expiration;

(c)     be signed by the taxpayer or the taxpayer's representative and the secretary or the secretary's delegate; and

(d)     contain a declaration by the taxpayer or the taxpayer's representative that all statements of fact made by the taxpayer or the taxpayer's representative in the taxpayer's application and the agreement are true and correct as to every material matter.

F.     The secretary may, by regulation, require any person doing business in the state to submit to the department information reports that are considered reasonable and necessary for the administration of any provision of law to which the Tax Administration Act [7-1-1 NMSA 1978] applies.