A. Every remitter or pass-through entity is liable for:
(1) amounts required to be deducted and withheld by the Oil and Gas Proceeds and Pass-Through Entity Withholding Tax Act regardless of whether the amounts were in fact deducted and withheld; and
(2) for the amounts that a remittee or an owner has agreed to remit pursuant to Subsection G of Section 7-3A-3 NMSA 1978, once the department has notified the remitter or pass-through entity that the remittee or owner has failed to remit.
B. A remitter or pass-through entity is not liable for amounts required to be deducted and withheld by the Oil and Gas Proceeds and Pass-Through Entity Withholding Tax Act but not deducted or withheld if:
(1) the remitter or pass-through entity fails to deduct and withhold the required amounts and if the tax against which the required amounts would have been credited is paid; or
(2) the remitter's or pass-through entity's failure to deduct and withhold the required amounts is due to reasonable cause.
History: 1978 Comp., § 7-3A-5, enacted by Laws 2003, ch. 86, § 8; 2010, ch. 53, § 12; 2012, ch. 40, § 4.
The 2012 amendment, effective May 16, 2012, eliminated changes in net income for federal income tax purposes as an exception to liability for withholding and deleted former Subsection C, which provided that changes in net income due to a timely election for federal income tax purposes was reasonable cause for failing to withhold.
Applicability. — Laws 2012, ch. 40, § 8 provided that the provisions of Laws 2012, ch. 40, §§ 1 through 7 are applicable to taxable years beginning on or after January 1, 2012.
The 2010 amendment, effective May 19, 2010, in the catchline, changed "Remitter" to "Remitters and pass-through entities"; in Subsection A, in the introductory sentence, added "or pass-through entity"; in Subsection A(1), after "Oil and Gas Proceeds", added "and Pass-Through Entity" and after "deducted and withheld", deleted "except that" and added "and"; added Paragraph (2) of Subsection A; added the introductory sentence of Subsection B; in Subsection B(1), after "the remitter", added "or pass-through entity" and after "have been credited is paid", deleted "the remitter shall not be liable for those amounts not deducted and withheld"; in Subsection B(2), after "the remitter's", added "or pass-through entity's" and after "reasonable cause", deleted "such as reliance on addresses supplied by remittees, the remitter shall not be liable for amounts not deducted and withheld"; and added Subsection C.
Temporary provisions. — Laws 2010, ch. 53, § 17 provided that for a taxable year beginning on or after January 1, 2011, but before January 1, 2012, no remitter or pass-through entity shall be subject to the penalty imposed pursuant to Section 7-1-69 NMSA 1978 for failure to comply with the provisions of the Oil and Gas Proceeds and Pass-Through Entity Withholding Tax Act.
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