New Mexico Instructions for Form PTE Information Return for Pass-Through Entities

Instructions for Form PTE Information Return for Pass-Through Entities
Form PTE-NM Instructions (Obsolete)
STATE OF NEW MEXICO
Taxation and Revenue Department
P.O. Box 25127
Santa Fe, New Mexico 87504-5127

2016 New Mexico

Instructions for Form PTE
Information Return for Pass-Through Entities
Our contact information is:
Telephone: (505) 827-0825 in Santa Fe or toll free (866) 809-2335, select option 4
E-mail: [email protected]
Mailing address:
New Mexico Taxation and Revenue Department
ATTENTION: Corporate Income and Franchise Tax
P. O. Box 25127
Santa Fe, New Mexico 87504-5127
These Instructions Cover the Following Forms:
l	

PTE, New Mexico Information Return for Pass-Through Entities

l	PTE-A,

New Mexico Apportionment Factors Schedule

l	PTE-B,

Allocated Non-business Income Taxable to Owners

l	PTE-PV,

Pass-Through Entity Penalty Payment Voucher

l	

RPD-41373, Application for Refund of Tax Withheld From
Pass-Through Entities

l	

RPD-41367, PTW Detail Report For Annual Withholding of Net
Income From a Pass-Through Entity

l	

PTW-PV, PTW Detail Report For Annual Withholding of Net
Income From a Pass-Through Entity Payment Voucher

l	

PTW-EXT, PTW Detail Report For Annual Withholding of
Net Income From a Pass-Through Entity Extension Payment
Voucher

	

2016 Legislative Summary
For information about New Mexico tax law changes enacted
during 2016, see Bulletin B-100.28, 2016 Legislative Summary. Legislative summaries are available for each year,
providing a brief description of new legislation passed during
that year affecting the Taxation and Revenue Department.
Access our web page at www.tax.newmexico.gov, and click
on "Forms & Publications", then search the "Publications" for
the Legislative Summary for the year in which the legislation
passed.
For More Information On . . .

Profit and Non-Profit Corporate Reporting, go to:
http://www.sos.state.nm.us/Business_Services/
Office of the New Mexico Secretary of State
Corporations Bureau
325 Don Gaspar, Suite 300
Santa Fe, NM 87501

Call (505) 827-4508 in Santa Fe or toll free (800) 477-3632

DUE DATES:
Calendar Year Filers Filing and Paying Online:
Filing deadline is on or before March 30, 2017 to avoid
penalty and interest, you must electronically file your
return, Form RPD-41367 and electronically pay your
tax due.
Fiscal Year Filers and Calendar Year Filers Filing
Paper Returns and Payments:
Filing deadline is on or before March 15th, 2017, or on
or before the 15th day of the third month following the
end of the tax year.
FILING FORM PTE ONLINE:
	 File 2016 Form PTE Online using Taxpayer Access
Point (TAP). On the Department's web site at www.
tax.newmexico.gov, click on Online Services and
then File a Return. First-time filers will need to create a login name and password. See How-to Videos
on the TAP homepage to watch the Signing Up for
TAP video. All TAP users must add access to their
FID account. Watch the Adding Access to Accounts
video.
	 Pay via credit card using Visa, MasterCard, Discover
or American Express cards. A 2.40% convenience
fee calculated on the amount of the transaction covers costs that the companies bill the state when you
use your card.
	 Pay via electronic check at no charge. An electronic check authorizes TRD to debit your checking
account in the amount and on the date you specify.

E-mail: [email protected]
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Contact our local offices . . .
Local Taxation and Revenue Department Offices can provide full service and information about New Mexico's taxes,
programs and forms and specific information about your filing situation.

ALBUQUERQUE:

FARMINGTON:

Taxation & Revenue Department
Bank of the West Building
5301 Central Ave., NE
P.O. Box 8485
Albuquerque, NM 87198-8485
Telephone: (505) 841-6200

LAS CRUCES:

Taxation & Revenue Department
3501 E. Main Street, Suite N
P.O. Box 479
Farmington, NM 87499-0479
Telephone: (505) 325-5049

ROSWELL:

Taxation & Revenue Department
400 North Pennsylvania, Suite 200
P.O. Box 1557
Roswell, NM 88202-1557
Telephone: (575) 624-6065

Taxation & Revenue Department
2540 S. El Paseo, Building #2
P.O. Box 607
Las Cruces, NM 88004-0607
Telephone: (575) 524-6225

SANTA FE:

Taxation & Revenue Department
1200 South St. Francis Drive
P.O. Box 5374
Santa Fe, NM 87502-5374
Telephone: (505) 827-0951

Your Electronic Services
Access the Department's Online Services Page At: http://tap.state.nm.us
	 Pay via credit card or electronic check - Taxpayers may pay taxes over the Internet with Visa, MasterCard, Discover

or American Express cards. A 2.40% convenience fee calculated on the amount of the transaction covers costs that the
companies bill the state when you use your card. You may also pay by electronic check at no charge. An electronic
check authorizes TRD to debit your checking account in the amount and on the date you specify.

	 Download forms, publications and brochures or ask a question - Taxpayers may access forms, publications and

brochures from our website.

	 Ask a question - You can ask general questions about New Mexico taxes using the e-mail address

	

[email protected], or ask about your tax return at [email protected].

Taxpayer Access Point: TAP is a secure resource that allows taxpayers to check the status of tax
accounts online, file certain returns, make payments, and change their address. Access our website and select
the Taxpayer Access Point (TAP) link. The status of your refund is available through the "Where is my Refund" link
-- for PIT, CIT, and CRS tax programs. You will need your Social Security Number (SSN), or your Individual Taxpayer
Identification Number (ITIN), and the amount of refund due. TAP is currently available for the following tax programs:

	 New Mexico

•	

Alternative Fuels Excise Tax

•	

Gaming Operator Tax

•	

Severance Tax

•	

Bingo and Raffle Tax

•	

International Fuel Tax (IFTA)

•	

•	

Cigarette Tax

•	

International Registration Plan (IRP)

Sub-Chapter S Corporate Income
and Franchise Tax

•	

Combined Fuel Tax

•	

Liquor Excise Tax

•	

Telecom Relay Service Surcharge

•	

Combined Reporting System (CRS)

•	

Local Liquor Excise Tax

•	

Tobacco Products Tax

•	

Conservation Tax

•	

Oil and Gas Proceeds

•	

Water Conservation Fee

•	

Corporate Income Tax

•	

Pass-Through Withholding

•	

Weight Distance Tax and Permits

•	

E911 Services Surcharge

•	

Personal Income Tax

•	

Workers' Compensation Tax

•	

Fiduciary Income Tax

•	

Railroad Car Company Tax

•	

Gaming MFG and Distributor Tax

•	

Resource Excise Tax

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______________________________

GENERAL INSTRUCTIONS

ANSWERS TO COMMONLY
ASKED QUESTIONS
______________________________
When requesting a refund of tax
withheld and reported on the PTE
return, attach Form RPD-41373,
Application for Refund of Tax Withheld
From Pass-Through Entities, to the PTE
return. Enter the amount to be refunded
on Form PTE, line 5.
To receive credit for tax withheld on
your PTE return, all annual statements
of income and withholding must be issued to the entity filing the New Mexico
return.
Do not submit Schedule K-1 or equivalent forms with a PTE return.
Entities that file an S-Corp, New Mexico
Sub-Chapter S Corporate Income and
Franchise Tax Return, do not also file a
PTE, New Mexico Information Return
for Pass-Through Entities. An entity that
files the S-Corp return may be required
to file RPD-41367, instead.
New Mexico approved tax credits
may not be passed to the owners using a PTE return or a Schedule K-1
equivalent form. Refer to the forms
and instructions for the tax credit for
information on how to pass tax credits
to owners.
When the PTE or remitter withholds
from oil and gas proceeds and or
pass-through entity withholding and
the owner or remittee has no other
income from New Mexico sources,
the non-resident owner's or remittee's
requirement to file a New Mexico personal income tax return is met.
Each New Mexico General Fund recipient appreciates your cooperation and
compliance.

______________________________
DEFINITION OF A
PASS-THROUGH ENTITY
______________________________
“Pass-through entity” means a personal
services business or any other business
association other than:
• 	 A sole proprietorship;
• 	 An estate or trust that does not
distribute income to beneficiaries;
• 	 A corporation, limited liability company, partnership or other entity
not a sole proprietorship taxed as
a corporation for federal income tax
purposes for the tax year;
• 	 A partnership that is organized as an
investment partnership in which the
partner’s income is derived solely
from interest, dividends and sales
of securities;
• 	 A single member limited liability
company that is treated as a disregarded entity for federal income tax
purposes, or
• 	 A publicly traded partnership as
defined in Subsection (b) of Section
7704 of the Internal Revenue Code.
“Personal Services Business” means
a business organization that receives
payments for the services of a performing artist for purposes of the film
production tax credit.
An estate or trust that distributes income to beneficiaries is also a passthrough entity, but files a FID-1 return
instead of a PTE return.
______________________________
ENTITIES REQUIRED TO 
FILE A NEW MEXICO
INFORMATION RETURN FOR
PASS-THROUGH ENTITIES
______________________________
Pass-through entities doing business
in the state must file a, New Mexico
Information Return for Pass-Through

Entities (Form PTE). This requirement
includes entities registered to do business in the state, transacting business
in, into or from the state, or receiving
any income from property or employment within the state, and includes any
partnership, joint venture, common
trust fund, limited association, pool
or working agreement, limited liability
company or any other combination of
persons or interests required to file a
federal partnership return.
______________________________
DUE DATES:
______________________________
For entities that file on a calendar year
basis, the 2016 New Mexico PTE return
is due on or before March 15, 2017,
together with payment of taxes due.
For entities that file on a fiscal year
basis, or file a short year return, the
New Mexico PTE return is due on or
before the 15th day of the third month
following the close of the tax year with
payment of taxes due.
Calendar year filers qualify for an extended due date if they file both their
2016 PTE return and Form RPD-41367,
electronically and pay any tax due
electronically. The extended due date
is March 31, 2017. To avoid penalty
and interest, you must electronically
file your return and electronically pay
your tax due.
Fiscal-year returns are due on or before the 15th day of the third month
following the close of the tax year. The
extended due date for electronic filing
and paying the tax due does not apply
to fiscal-year filers.
A New Mexico income tax return is
timely if the United States Post Office
postmark on the envelope bears a date
on or before the due date. If the due

If you file Federal form...	

You must file New Mexico form...

1065

PTE	

1120	

	 U.S. Return of Partnership Income	
U.S. Corporation Income Tax Return	

Information Return for Pass-Through Entities

CIT-1	 Corporate Income and Franchise Tax Return

1120S 	 U.S. Income Tax Return for an S Corporation	

S-Corp	 Sub-Chapter S Corporate Income and Franchise Tax Return

1040 	 U.S. Individual Income Tax Return	

PIT-1	 Personal Income Tax Return

1041

	 U.S. Income Tax Return for Estates and Trusts 	 FID-1	 Fiduciary Income Tax Return

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date falls on a Saturday, Sunday, state
or national legal holiday, the return is
timely if the postmark bears the date
of the next business day. Delivery
through a private delivery service is
timely if the date recorded or marked
by the private delivery service is on or
before the due date.
______________________________
EXTENSION OF TIME TO FILE
______________________________
TRD accepts an extension of time
granted by the Internal Revenue Service if a copy of the automatic federal
extension accompanies the PTE return
at the time of filing.
If the entity needs an extension of time
to file the New Mexico PTE return but
has not obtained a federal extension, or
if additional time to file the New Mexico
return is needed beyond the federal extension date, the entity should request
an extension by letter or by filing New
Mexico Form RPD-41096, Extension
of Time to File, on or before the due
date of the return.
If a federal automatic extension or a
New Mexico extension is obtained for
the PTE return, the extension also applies to the filing of Form RPD-41367.
An extension of time to file your return
does not also extend the time to pay. If
tax is due, interest continues to accrue.
______________________________
WHICH RETURN TO FILE
______________________________
FISCAL YEAR FILERS AND SHORT
YEAR FILERS use the PTE return
applicable to the tax year in which
the fiscal year or short year begins.
For example, if the tax year begins
on June 30, 2016, use the 2016 PTE
return, regardless of the ending date
of the tax year.
In general, the federal return that you
are required or elect to file determines
the New Mexico income tax return that
you file. See chart on previous page.
If your business does not file a New
Mexico Information Return for PassThrough Entities (PTE), New Mexico
may require you to file one of the following forms for New Mexico instead:
•	 CIT-1, New Mexico Corporate Income and Franchise Tax Return,

•	 S-Corp, New Mexico Sub-Chapter
•	
•	

S Corporate Income and Franchise
Tax Return,
PIT-1, New Mexico Personal Income
Tax Return, or
FID-1, New Mexico Fiduciary Income Tax Return.

NOTE: Entities that file a 2016 S-Corp,
New Mexico Sub-Chapter S Corporate
Income and Franchise Tax Return, do
not also file a 2016 PTE, New Mexico
Information Return for Pass-Through
Entities. NOTE: An entity that files the
S-Corp return may be required to file
Form RPD-41367, Annual Withholding
of Net Income From a Pass-Through
Entity Detail Report.
If You File Federal Form 1120
Every entity having income from activities or sources within New Mexico that
is required to file a federal corporation
income tax return or equivalent return
must file a New Mexico CIT-1 return.
These include all corporations organized under the laws of the State of New
Mexico and corporations exempt from
federal income tax under the Internal
Revenue Code which have unrelated
business income.
If You File Federal Form 1120S
Corporations and Limited Liability
Companies (LLCs) electing to be taxed
as S corporations for federal income
tax purposes must file a New Mexico
S Corporate Income and Franchise
Tax Return (S-Corp) if the entity is
registered to do business in the state,
transacts business in, into or from the
state, or derives any income from property or employment within the state.
Each owner of the partnership, limited
liability corporation, S corporation or
similar business association must
include his or her share of the passthrough entity income on the New
Mexico personal or corporate income
tax return.
If You File Federal Form 1120-REIT
A Real Estate Investment Trust (REIT),
which does business in New Mexico
and files a federal Form 1120-REIT,
must file a New Mexico S-Corp return.

Estates and trusts are subject to New
Mexico personal income tax. The fiduciary for an estate or trust must file a
FID-1 return.
Each beneficiary of an estate or trust
must include his or her share of the
estate or trust income on the New
Mexico personal or corporate income
tax return even if the estate or trust was
not required to file FID-1.
If You File Federal Form 1040, 1040A
or 1040EZ
If you are a New Mexico resident, you
must file a New Mexico return if you
meet any of the following conditions:
•	 You have to file a federal return.
•	 You want to claim a refund of any
New Mexico state income tax withheld from your pay.
•	 You want to claim any New Mexico
rebates or credits.
New Mexico’s law says every person
who has income from New Mexico
sources and who is required to file
a federal income tax return must file
a personal income tax return in New
Mexico. This includes non-residents
who have income from wages, rents,
royalties, businesses, estates...every
New Mexico source. Even foreign
nationals and persons who reside
in states that do not have income
taxes must file here when they have
a federal filing requirement and have
income from any New Mexico source
whatsoever.
A single-owner LLC or similar organization doing business in New Mexico who
is required to or elects to file a federal
Form 1040 Schedule C instead of a
federal corporate income tax return or
a federal pass-through entity return,
must file a New Mexico PIT-1 return.
No franchise tax is due.
A non-resident owner's and remittee's
requirement to file a New Mexico
personal income tax return is met
when the PTE or remitter withholds
from oil and gas proceeds and/or
pass-through entity withholding, and
the owner or remittee has no other
income from New Mexico sources.

If You File Federal Form 1041

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Obtaining Forms
All New Mexico Taxation and Revenue
Department forms, instructions and
information brochures are available on
the Department’s Internet home page.
Our address is: www.tax.newmexico.
gov. Forms are also available at any
New Mexico Taxation and Revenue
Department district offices listed on
page 2 of these instructions. You may
also request forms by calling (505)
827-2206 in Santa Fe or toll free (866)
809-2335, select option 4.
IMPORTANT: File Returns on Approved State Forms.
Always submit 2016 Pass-Through
Entity Returns on official state forms
provided by or approved by the Department. Never submit a return with a form
that has been photocopied or photo
shopped as it will not be accepted.
______________________________
WITHHOLDING AND ADDITIONAL
REPORTING REQUIREMENTS
FOR PASS-THROUGH ENTITIES
______________________________
A pass-through entity (PTE) who is
subject to withholding tax from its nonresident owners, partners, members,
or beneficiaries (owners) net income
according to the Oil and Gas Proceeds
and Pass-Through Entity Withholding
Tax Act (Sections 7-3A-1 through 7-3A9 NMSA 1978) must annually report
each owner’s share of net income
allocable to New Mexico and remit
the New Mexico tax withheld for each
owner. The required annual report is
Form RPD-41367, PTW Detail Report
For Annual Withholding of Net Income
From a Pass-Through Entity.
The PTE must report for all owners
and except for personal services businesses, mark the indicator box on Form
RPD-41367, if the PTE entered into
an agreement with the owner that the
owner files and pays the tax due on
the allocable net income of the PTE. A
PTE that is a personal service business
cannot enter into an agreement with its
owners. Form RPD-41367 is due, even
if no tax was withheld.

File Electronically: If a PTE has 51 or
more payees who receive New Mexico
net income, the PTE is required to
electronically file Form RPD-41367
through TAP or approved third party
software. If the PTE has 51 or more
New Mexico payees, and is unable to
file electronically because a hardship
exists, the PTE may request Department approval to file by paper. The
PTE may request approval by filing
Form RPD-41350, E-File Exception
Request Form. The request must be
received by the Department at least 30
days before the taxpayer’s electronic
report is due.
If the PTE has 50 or fewer beneficiaries
who receive New Mexico taxable net
income, the PTE may choose to submit
the completed RPD-41367 electronically or in paper format.
When required to file electronically, a
paper filed Form RPD-41367 will be
rejected by the Department.
Certain exceptions to the requirement
to withhold are allowed, and documentation must be maintained in the PTE's
records to establish that the PTE had
reasonable cause for not withholding. A
complete list of exceptions is provided
in the instructions for Form RPD-41367.
Form RPD-41367, PTW Detail Report
For Annual Withholding of Net Income
From a Pass-Through Entity, is due on
or before the due date of the entity’s
federal return for the taxable year. If
a pass-through entity is not required
to file a federal income tax return for
the tax year, the entity must file Form
RPD-41367 with the Department no
later than 105 days after the end of its
taxable year.
If a federal automatic extension or a
New Mexico extension is obtained for
the PTE return, the extension also applies to the filing of Form RPD-41367.
An extension waives penalty through
the extension due date, but does not
waive interest.

To make an extension payment, go to
TAP and complete Form PTW-EXT,
Annual Withholding of Net Income
From a Pass-Through Entity Detail Report Extension Payment Voucher. The
payment and the voucher can also be
mailed to the address on the voucher.
Other Reporting Requirements:
PTEs are also required to provide
sufficient information to enable the
owners to comply with the provisions of
the Income Tax Act and the Corporate
Income and Franchise Tax Act, with
respect to the owner’s share of the net
New Mexico income. A PTE that uses
a Schedule K-1 or equivalent form to
report to the owners, their share of
the net income must also provide its
owners federal Forms 1099-Misc, pro
forma 1099-Misc, or Form RPD- 41359,
to report to the owners the allocable
net income and the New Mexico tax
withheld. A Schedule K-1 may not be
used by the owners to obtain credit for
New Mexico tax withheld.
Forms 1099-Misc, pro forma 1099-Misc,
or Form RPD-41359, Annual Statement
of Pass-Through Entity Withholding,
must be provided to the owner by February 15th of the year following the year
for which the statement is made. The
PTE is not required to submit these
forms to the Department.
______________________________
REQUIRED ATTACHMENTS
TO FORM PTE
______________________________
NOTE: We can process your return
more quickly if you submit your forms,
schedules and attachments in the following sequence:
•	 PTE: New Mexico Information Return for Pass-Through Entities.
•	 PTE-A: New Mexico Apportionment
Factors, if the entity has income from
sources both inside and outside New
Mexico.
•	 PTE-B: Allocated Non-business
Income Taxable to Owners, if the
entity has non-business taxable
income.

Reminder:
Write your correct federal employer identification number (FEIN)
on ALL forms, schedules, payments and correspondence.
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•	 RPD-41373: Application for Refund
of Tax Withheld From Pass-Through
Entities, if the entity requests a
refund of tax withheld against the
net income it receives from another
PTE, or withholding on New Mexico
oil and gas proceeds received.
•	 Federal Form 1065, pages 1
through 5.
•	 Other attachments as required by
instruction.
NOTE: If any of these forms are omitted when required, the New Mexico
return is incomplete.
If your return is filed late, complete
PTE-PV, Pass-Through Entity Penalty Payment Voucher, to include with
your check or money order for the $5
late filing penalty.
Note: When you provide a check as
payment, you authorize the Department to use information from your
check to make a one-time electronic
fund transfer from your account. When
we use information from your check to
make an electronic fund transfer, funds
may be withdrawn from your account
as soon as the same day you make
your payment.
_____________________________
Other Forms or Attachments
You May Have to File
______________________________
If the PTE is not required to electronically file Form RPD-41367 because
it has 50 or fewer payees or has
obtained an exception for electronically filing Form RPD-41367 from the
Department, submit the completed
RPD-41367 with the PTE return. If
payment is due, also complete Form
PTW-PV, Annual Withholding of Net
Income From a Pass-Through Entity
Detail Report Payment Voucher, and
submit the check and payment voucher
attached to Form RPD-41367, to the
address on the voucher.
If a PTE has 51 or more payees who
receive New Mexico net income, the
PTE is required to electronically file
Form RPD-41367 in TAP or approved
third party software.
A copy of the approved federal extension or the approved New Mexico
extension if the return is filed after

the original due date of the return. If
a copy is omitted, a late-filing penalty
will be assessed.
All annual information returns and
withholding statements issued to
the entity. Attach a copy of all annual
information returns and withholding
statements showing income and New
Mexico income tax withheld, if reporting amounts withheld on lines 1 or 2
of the PTE return. Attach New Mexico
Forms RPD-41285, Annual Statement
of Withholding of Oil and Gas Proceeds,
or RPD-41359, Annual Statement of
Pass-Through Entity Withholding, or
federal Form 1099-Misc or equivalent.
IMPORTANT: To receive proper credit
for withholding, all annual statements
of income and withholding must be issued to the entity filing the New Mexico
return. A Schedule K-1 or equivalent is
not sufficient evidence of New Mexico
income tax withheld.
Federal Forms and Schedules. The
Department may require you to furnish
a true and correct copy of your federal
tax return and attachments.
To claim Approved Film Production
Tax Credit, you must attach Form
RPD- 41228, Film Production Tax
Credit Claim Form, to the return. Report
the amount of approved film production
tax credit on the PTE return, line 18.
NOTE: New Mexico approved tax credits may not be passed to the owners
using a PTE return or a Schedule K-1
or equivalent form. Refer to the forms
and instructions for the tax credit for
information on how to pass tax credits
to owners.
______________________________
PAYMENTS
______________________________
If you are filing a late return you may
pay the $5 penalty on the Department's website, or by using PTE-PV,
Pass-Through Entity Penalty Payment
Voucher.
If you are making a payment towards
your Form RPD-41367, PTW Detail
Report For Annual Withholding of Net
Income From a Pass-Through Entity,
you may pay by using PTW-PV, Annual Withholding of Net Income From

a Pass-Through Entity Detail Report
Payment Voucher, or through TAP.
Do not combine payments towards the
PTE return and the Form RPD-41367
on the same check or money order. If
you combine payments, it is likely they
will not be credited to your account in
the way you would wish.
Making Payment Through the
Internet. Using the Department website, you may pay by electronic check
at no charge. Your electronic check
authorizes the Taxation and Revenue
Department to debit your checking account in the amount and on the date you
specify. Directions are available on the
website. Pay your tax due online using
the Department’s website at
https://tap.state.nm.us.
You may also make tax payments
using any of these credit cards--Visa,
MasterCard, American Express, or Discover Card--for your online payment. A
convenience fee of 2.40% is applied for
using a credit card. The State of New
Mexico uses this fee, calculated on the
transaction amount, to pay charges
from the credit card companies.
Making Payment By Check. Whether
submitting payment separately or attached to your return, complete the
PTE-PV or PTW-PV and include your
check or money order.
Make your check or money order payable to New Mexico Taxation and Revenue Department. Do not mail cash.
Mail the return, payment voucher,
payment and required attachments to:
Taxation and Revenue Department
P.O. Box 25127
Santa Fe, New Mexico 87504-5127
When you provide a check as payment, you authorize the Department
to use information from your check to
make a one-time electronic fund transfer from your account. When we use
information from your check to make
an electronic fund transfer, funds may
be withdrawn from your account as
soon as the same day you make your
payment.

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NOTE: Because the Department uses
high-speed scanners when processing
payment vouchers, a quality form helps
ensure accuracy. Do not photocopy.
The scanners can read only one page
size to process vouchers, therefore it
is important that you cut on the dotted
line only. When printing the voucher
from the Internet or a software product,
prevent resizing by setting the printer's
page scaling function to none. If your
payment voucher has a scanline (a
very long row of numbers) within the
bottom 1 and 1/2 inch of the voucher
do not write in the area around the
scanline.
To avoid misapplication of funds write
“2016 PTE” or "2016 PTW-PV", and
your federal employer identification
number on the check or money order.
A check that is not paid by the financial
institution on which it is drawn does not
constitute payment, and a minimum
penalty of $20 is assessed in addition to
other applicable penalties and interest.
______________________________
REFUND
______________________________
A pass-through entity (PTE) may use
Form RPD-41373, Application for
Refund of Tax Withheld From PassThrough Entities, to request a refund
of tax withheld from its net income
according to the Oil and Gas Proceeds
and Pass-Through Entity Withholding
Tax Act. If tax was withheld from the
net income received from another
PTE, or tax was withheld from oil
and gas proceeds received, the PTE
may request a refund or pass the tax
withheld to its owners. A refund can
be obtained by attaching Form RPD41373 to the PTE return, New Mexico
Information Return for Pass-Through
Entities.
If requesting a refund from withholding
tax paid by the PTE, attach Form
RPD-41373 to the PTE's Form RPD41367, PTW Detail Report For Annual
Withholding of Net Income From a
Pass-Through Entity.
IMPORTANT: To validate the claim
for refund, on Form RPD-41367, the
Department may require both the PTE
and Form RPD-41367 to be filed. The
Department compares the information

provided on both forms to verify that
the claim for refund is valid.
Specific Instructions for Claiming
a Refund on the PTE Return. If you
have received a 1099-Misc, Form
RPD-41359, Annual Statement of
Pass-Through Entity Withholding, or
Form RPD-41285, Annual Statement of
Withholding of Oil and Gas Proceeds,
showing income tax withheld on your
net income from another pass-through
entity or withholding on New Mexico
oil and gas proceeds received, and
you wish to obtain a refund of the
tax withheld, then you must submit
a completed Form RPD-41373 to
the Department and enter the refund
amount on line 5 of the PTE return.
The forms 1099-Misc, RPD-41359, or
RPD-41285 must be issued to the PTE.
When requesting a refund, enter the
amount of refund claimed on Form
PTE, line 5, and attach a completed
Form RPD-41373 to the PTE return.
Specific Instructions for Claiming a
Refund on Form RPD-41367. If you
have overpaid the tax to be withheld
from the owner's allocable net income
of a PTE on RPD-41367, you must
submit a completed Form RPD-41373,
Application for Refund of Tax Withheld
From Pass-Through Entities, to the
Department.
On Form RPD-41373, under Basis
For Refund, indicate the reason for
overpayment.
______________________________
PENALTY
______________________________
If a PTE return is not filed when due
because of negligence or disregard of
rules or regulations, but without intent
to defraud, the entity is liable for a five
dollar penalty. The penalty does not
apply if there is an extension of time
to file and the return is filed by the
extended due date.
______________________________
AMENDED RETURNS
______________________________
Submit an amended return on a PTE
return for the year being amended and
check the “amended” box. Attach all
required schedules.
If the New Mexico amended return
reports changes as the result of filing

an amended federal return, attach copies of the applicable federal forms and
schedules. In all other cases, attach
an explanation of the changes. If the
New Mexico amended return shows
changes as the result of a Revenue
Agent Report (RAR), the changes must
be reported within 180 days of the date
the federal adjustments are final. Attach
a copy of the RAR.
NOTE: Generally, you do not need to
attach a copy of the previously filed
state PTE return as backup for the
amended return. If you do attach a copy
of the state Form PTE as backup, write
"DO NOT PROCESS" across the face
of the return.
______________________________
LINE INSTRUCTIONS FOR
COMPLETING PTE RETURN
______________________________
Computerized schedule(s) WILL
NOT be accepted in lieu of completing the appropriate forms. All applicable line items on the PTE return
and Schedules PTE-A, PTE-B, RPD41367, and federal Form 1065, pages
1 through 5 must be completed for
the return to be processed.
NOTE: References to federal form
line numbers correspond to the most
recent federal forms available as of the
date these instructions were finalized.
If the references do not correspond to
the federal form, use the applicable
line from the federal form for the item
described.
Round all dollar amounts to the nearest
whole dollar.
Complete the taxpayer information
at the top of the PTE return. Type or
print the correct name, address, ZIP
code and identification numbers in the
spaces provided. Indicate if the return
is an original or amended return by
marking the appropriate box.
If you have a foreign address, enter
the street address, city name and
postal code in the appropriate line. Also
complete the spaces for the foreign
province and/or state and country. Follow the country’s practice for entering
the foreign postal code, the province or
state, and country. Do not abbreviate
the country name.

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Fiscal-year and short year return filers
must enter the beginning and ending
dates (month, day, and year) of their tax
year. No entry is required for calendar
year filers.
If the due date has been extended,
write in the extended due date. A
copy of the extension must be attached
to the return.
Enter the NAICS (North America
Industrial Classification System)
Code. The business activity code reported for New Mexico filing purposes
will be the same as reported for federal
purposes. If you don’t know your NAICS code, refer to the instructions for
your federal return. Federal forms and
instructions can be downloaded from
the IRS website, www.irs.gov.
NOTE: The Department cannot process
a return without the Federal Employer
Identification Number (FEIN). Failure to
provide the FEIN will result in processing delays and may cause the return
to be rejected.
The New Mexico CRS identification
number may be left blank if the passthrough entity does not require a New
Mexico CRS identification number
because the entity has no New Mexico
gross receipts, withholding or compensating tax reporting requirements.
If the pass-through entity needs a New
Mexico CRS identification number,
you may register the business online
at https://tap.state.nm.us, to obtain a
CRS identification number.
Complete Questions A through D.
SECTION 1, LINES 1-3 -- TAX WITHHELD FROM THE PASS-THROUGH
ENTITIES (PTE) INCOME
Line 1. Tax withheld from oil and
gas proceeds received. Enter the
total of all New Mexico income tax
withheld from oil and gas proceeds
received as shown on your annual
withholding statements, 1099-Misc, or
Form RPD-41285, Annual Statement of
Withholding of Oil and Gas Proceeds.
Be sure to include a copy of the forms
with your PTE return.

On this line, only report New Mexico
tax withheld on oil and gas proceeds
you received. The tax withheld must
be reported on one of the annual withholding statements mentioned above,
and must be issued to you.
An entity that has had tax withheld
cannot pass a withholding statement directly to any other taxpayer. Generally,
the recipient must file and report the
tax withheld on its New Mexico income
tax return. However, if the recipient is
also a remitter, the tax withheld on the
oil and gas proceeds may be passed
to the remittees by issuing the remittees an annual withholding statement,
Form RPD-41285, Annual Statement of
Withholding of Oil and Gas Proceeds,
or a pro forma 1099-Misc. The remittees may then claim the withholding
on their income tax return.
Line 2. Tax withheld on PTE allocable net income. Enter the total of
all New Mexico income tax withheld on
the pass-through entity's allocable net
income as shown on Forms 1099-Misc
or RPD-41359, Annual Statement of
Pass-Through Entity Withholding. Be
sure to include a copy of the forms with
your PTE return.
On this line, only report New Mexico
tax withheld on net income from a
pass-through entity that you received.
The tax withheld must be reported on
one of the annual withholding statements mentioned above, and must be
issued to you.
An entity that has had tax withheld
cannot pass a withholding statement directly to its owners, members, partners
or beneficiaries (owners). Generally,
the recipient must file and report the
tax withheld on its New Mexico income
tax return. However, if the recipient
is also a pass-through entity, the tax
withheld may be passed to the owner
of the recipient by issuing the owner
an annual withholding statement,
Form RPD-41359, Annual Statement
of Pass-Through Entity Withholding,
or a pro forma 1099-Misc. The owner
may then claim the withholding on their
income tax return.
Line 3. Amount from lines 1 and

2 passed to owners, Reported on
Form RPD-41367. Enter the amount
of tax withheld from the income of the
PTE, reported on lines 1 and 2, which
is subsequently passed on to the owners of the PTE.
A PTE passes withholding tax to its owners by issuing them Form RPD-41359,
Annual Statement of Pass-Through
Entity Withholding, Form 1099-Misc
or a pro-forma Form 1099-Misc. Then,
the owners may then take credit for
the withholding on their corporate or
personal income tax return.
When a PTE passes tax withheld to its
owners, the income tax withheld is also
reported on Form RPD-41367, PTW
Detail Report For Annual Withholding
of Net Income From a Pass-Through
Entity. Because the information is reported on Form RPD-41367, the PTE
does not need to submit copies of
Forms 1099-Misc and RPD-41359 to
the Department.
Line 4. Subtotal. Subtract line 3 from
the sum of lines 1 and 2.
Line 5. Refund of overpayment of
tax withheld. If applicable, enter the
amount of overpayment of tax withheld
from the PTE, and reported on lines 1
and 2. You must also attach a completed Form RPD-41373, Application
for Refund of Tax Withheld From
Pass-Through Entities, to the PTE
return. If you wish to obtain a refund
of any of the withholding tax, you must
attach Form RPD-41373, or your refund
will be denied.
When a PTE requests a refund of overpayment of tax withheld on Form PTE,
the withholding is NOT reported on
Form RPD-41367, PTW Detail Report
For Annual Withholding of Net Income
From a Pass-Through Entity. The PTE
claims the refund of the overpayment
of tax withheld on the PTE return and
does not report that amount with the
withholding of its owners.
See also the section on REFUND, on
page 8 of these instructions.
SECTION 2, LINES 6-17 -- COMPUTATION OF NET INCOME TAXABLE
TO OWNERS

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Line 6. Ordinary income. Enter the
ordinary income or loss as recognized
on federal tax return Form 1065,
Schedule K.
Line 7. Other income. Enter the summation of all other income or losses
recognized on federal tax return Form
1065, Schedule K.
Line 8. Interest income from municipal bonds. Enter interest income
from non-New Mexico state and local
bonds not subject to federal income
tax under IRC Section 103.
Line 10. Interest from U.S. government obligations. Interest or dividend
income from U.S. government obligations is deductible from an entity's
taxable income only if, and to the
extent that, it was included in taxable
income on line 6. Expenses related to
income from U.S. obligations must be
subtracted and the net amount entered.
NOTE: Income from Fannie Mae, Ginnie Mae, Freddie Mac and other U.S.
guarantee entities is not deductible.
Income from repurchasing agreements
of U.S. obligations (REPOs) is not deductible. Interest on notes issued by the
Federal Home Loan Bank obligations
are deductible, but not dividends issued
by the Federal Home Loan Bank. That
portion of income paid by mutual funds,
unit investment trusts, and simple trusts
which is derived from investments in
U.S. obligations may be deducted.
Interest income from bonds issued by
the State of New Mexico or its political
subdivisions may also be deducted on
this line to the extent that income was
included in federal taxable income.
Line 11. Allowable deductions from
Schedule K. Enter the allowable deductions recognized on the federal tax
return Form 1065, Schedule K. Neither
net operating loss carryover nor oil and
gas depletion deductions are allowed
to be claimed at the entity level on the
PTE return.
Line 12. Allocated income. Enter
total allocated income from Schedule
PTE-B, column 1, line 8, if applicable.
Line 14. Average New Mexico per-

centage. Enter the Average New
Mexico Percentage from Schedule
PTE-A, line 5.
Line 16. New Mexico allocated income. Enter New Mexico allocated
income from PTE-B, column 2, line 9,
if applicable.
Line 17. New Mexico net income.
Enter the sum of lines 15 and 16.
SECTION 4, LINE 18 -- ALLOWABLE
CREDIT
Line 18. Approved film production
tax credit. Enter the amount of approved film production tax credit that
you are eligible to claim. You must also
complete and attach Form RPD-41228,
Film Production Tax Credit Claim Form.
For a description of the credit, see Form
RPD-41228.
NOTE: The amount of film production tax credit you may claim against
your tax due on this return and the
amount that you may receive as a
refund (based on your claim for the
film production tax credit) are subject
to certain limitations governing the
payment of film production tax credit
claims. See the instructions for RPD41228, Film Production Tax Credit
Claim Form, for details regarding
these limitations and how your refund
may be impacted.
______________________________
SIGNATURE BOX
______________________________
SIGNATURE. The return must be
signed and dated by an officer,
member or partner of the entity.
Complete all information, including a
phone number and e-mail address.
Any person, other than an employee
of the entity, preparing the return for
compensation must also sign and date
the return. A preparer other than an
employee of the entity must enter the
paid preparer's identifying information
in the section, "Paid preparer's use
only", next to the taxpayer's signature.
Enter the preparer’s New Mexico CRS
identification number, if the preparer
has one, and the Federal Employer
Identification Number (FEIN), if applicable. All paid preparers must enter
their Preparer's Taxpayer Identification

Number (PTIN).
An improperly signed or unsigned
return will be considered invalid for
filing purposes, and penalty may be
assessed.
______________________________
SCHEDULE PTE-A
LINE INSTRUCTIONS
______________________________
LINES 1 - 5. NEW MEXICO APPORTIONMENT FACTORS
Schedule PTE-A must be used by an
entity to apportion its income from the
entity’s regular trade or business activities when income is derived from both
inside and outside New Mexico.
Complete lines 1 through 5 of PTE-A.
Round each percentage to four decimal
places (for example, 22.6270%).
The average percentage on line 5 must
be supplied to all owners of the entity.
Also enter this percentage on the PTE
return, line 14.
All filers who have business activity
outside New Mexico, including filers:
•	 who have no nexus in New Mexico;
•	 whose activities in New Mexico are
immune from corporate income tax
under P.L. 86-272, and
•	 who have no business activity in
New Mexico during the tax year,
must complete Schedule PTE-A in
its entirety in order for your return
to be processed.
On lines 1 through 5, columns 1 and
2, all entries must be either a positive
number or a zero. Negatives are not
allowed. Column 1 must be completed
to compute the factors. For the sales
factor only, if you have either a federal
taxable income or loss, you must have
a positive number in the denominator
(column 1, Gross Receipts line) of the
sales factor.
“Apportionable income” means
income arising from transactions
and activities in the regular course
of an entity’s trade or business.
Apportionable income includes
income from both tangible and intangible property if the acquisition,

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management or disposition of the
property constitutes integral parts
of the entity’s regular trade or business. It includes investment income
related to or used in the entity's
overall business operations. The
following sources of income are
considered apportionable income
and must be included:

•	 Dividend income from the invest-

ment of working capital or dividend
income from an investment which is
functionally connected to the entity's
trade or business.

•	 Interest income from the investment

of working capital, or interest income
from capital investments used in
the overall business operations, or
interest income from an investment
which is functionally connected to
the entity's trade or business.

•	 Royalty income and fees from

patents, copyrights, franchises,
trademarks and licenses developed
in the regular course of the entity's
trade or business, or royalty income
and fees from a product or mineral
interest used in the regular course
of the entity's trade or business.

•	 Rental or subrental income from

property purchased, leased or used
in the regular course of the entity's
trade or business.

•	 Gains or losses from the sale of

assets used in the regular course
of the entity's trade or business or
assets sold which had been treated
as business assets in prior years.

•	 Income from a partnership or non-

is negative, enter zero.
Property shall be valued according to
the following rules:
Inventory shall be valued according to
the valuation method used for federal
income tax purposes.
Value property owned during the tax
year at its original cost before the allowance for depreciation amount at
the time of acquisition by the taxpayer
and adjusted by subsequent capital
additions, improvements and partial
dispositions.
Value property which was rented from
others at eight (8) times the net annual
rental rate. The net annual rate is the
annual rent paid less any annual rent
received from subrentals of the same
property. If property owned by others
is used by the entity at no charge or
rented by the entity at a nominal rate,
the net annual rental rate is determined
on the basis of a reasonable market
rental rate for the property.
Determine the average value of property by adding the total value of property
held by the taxpayer at the beginning
of the tax period to the total value of
property held at the end of the tax
period. Divide by two.
A taxpayer may be required to compute
an average value on a monthly basis
if the Department determines that a
monthly average is necessary to correctly reflect the average value of the
taxpayer’s property.

corporate entity if held within the
regular course of the corporation's
trade or business.

Line 2. Payroll Factor. This factor is
a percentage determined as follows:

Line 1. Property Factor. This factor is
a percentage determined as follows:

Divide the total amount paid as compensation to employees in New Mexico
during the tax year (column 2)

Divide	 the average value of the real
and tangible personal property owned
or rented and used in New Mexico during the tax year to produce apportionable income (column 2)
By the average value of all real and
tangible personal property owned or
rented everywhere and used during
the tax year to produce apportionable
income (column 1). If the percentage

By the total amount paid as compensation to employees everywhere during
the tax year (column 1).
"Compensation” means wages, salaries, commissions, and any other form
of remuneration paid to employees for
personal services. Only amounts paid
directly to employees are included in
the payroll factor. “Employees” include

leased employees where the taxpayer
is considered an employer for payroll
tax purposes, but “employees” are not
independent contractors to whom the
taxpayer issues federal Form 1099.
Only compensation that is attributable
to business operations subject to apportionment is included in the payroll
factor.
Compensation of any employee whose
primary activities relate to the production of non-business income is excluded
from the payroll factor, but may be
included as a related expense of the
allocated activity.
Line 3. Sales Factor. This factor is
a percentage determined as follows:
Divide the total gross receipts attributable to New Mexico during the tax
year, excluding returns, allowances and
allocated income (column 2)
By the total gross receipts everywhere
during the tax year, excluding returns,
allowances and allocated income (column 1). If the percentage is negative,
enter zero.
“Gross receipts” means all income
earned from transactions and activities in the regular course of business,
including income from licensing of
intangible personal property.
Sales of tangible personal property are
New Mexico sales if:
•	 The property is delivered or shipped
to a purchaser, other than the United
States government, within the state
regardless of the FOB point or other
conditions of the sale, or
•	 The property is shipped from an
office, store, warehouse, factory
or other place of storage in this
state and
◦◦ the purchaser is the United States
government, or
◦◦ the taxpayer is not taxable in the
state of the purchaser.
Sales other than sales of tangible personal property are New Mexico sales if:
•	 The income-producing activity was
performed in New Mexico,
•	 The income-producing activity was

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performed both inside and outside
New Mexico, but a greater proportion was performed within New
Mexico than in any other single state
(the proportion shall be determined
by the cost of performance in each
state),
•	 The gross receipts were from the
rental, lease, licensing or any other
use of either real or tangible personal
property during the time the property
was in New Mexico, or
•	 The gross receipts were from the
performance of personal services
in New Mexico.
Lines 4 and 5. Total Factors and
Average New Mexico Percentage.
New Mexico uses an evenly weighted
three-factor formula. The three-factor
formula is for all taxpayers except
taxpayers who are:
•	 Qualifying manufacturers who
elect to use the special manufacturers apportionment formula, or
•	

•	

A taxpayer whose principal business activity in New Mexico is a
headquarters operation and who
elects to use the single weighted
sales factor apportionment formula, or
Allowed or required to eliminate
one or more factors because the
three-factor formula does not fairly
represent the extent of their business activity in New Mexico.

Taxpayers using the three-factor
formula, complete lines 4 and 5
as described on Schedule PTE-A.
Taxpayers electing or required to
use one of the exclusions described
above must follow the instructions
described next.
Exclusion 1
Electing Manufacturers Apportionment Formula
Taxpayers whose principal activity
is manufacturing may elect to use a
special apportionment formula. For tax
years beginning on or after January 1,

2014, the election allows taxpayers to
apportion the business income to New
Mexico using an alternative method
which, over a five-year period, phasesin a single weighted sales factor.
See the chart below for the apportionment formula.
The election for the special factor
method applies to the tax year in
which the manufacturer notifies the
Department of their election, until the
manufacturer notifies the Department,
in writing, that the election is terminated.
The manufacturer, however, shall not
terminate the election until the method
of apportioning business income has
been used by the taxpayer for at least
three consecutive tax years, covering
at least 36 calendar months.
The statutory authority for this elective
method is in Statue 7-4-10(B) NMSA
1978.
Definition of Manufacturing
"Manufacturing" means combining or
processing components or materials
to increase their value for sales in the
ordinary course of business, but does
not include:
	
(a) construction;
	
(b) farming;
	
(c) power generation, except
for electricity generation at a facility
other than one for which both location
approval and a certificate of convenience and necessity are required prior
to commencing construction or operation of the facility, pursuant to the Public
Utility Act [Articles 1 through 6 and 8
through 13 of Chapter 62 NMSA1978]
or
	
(d) processing natural resources, including hydrocarbons.
How to Make the Election
To elect to use the electing manufacturers apportionment formula, you must
notify the Department in writing no later
than the filing date of the first return to

which your election applies.
Submit your notification to make your
election or to terminate your election
to Taxation and Revenue Department,
CIT Unit, P.O. Box 630, Santa Fe, NM
87504-0630. For assistance, call (505)
827-0825 or toll free: (866) 809-2335,
option 4. Or, e-mail:
[email protected].
On PTE-A, line 5, use the formula in
the chart that corresponds to the tax
year of your return to calculate the apportionment percentage.
Exclusion 2
Electing Headquarters Operation
Apportionment Formula
Taxpayers whose principal business
activity in New Mexico is a headquarters operation may elect to use a single
weighted sales factor apportionment
formula. For tax years beginning on
or after January 1, 2015, the election
allows the taxpayer to apportion the
business income to New Mexico using
a single weighted sales factor.
If elected the taxpayer apportions taxable income by multiplying it by a fraction, the numerator of which is the total
sales of the business in New Mexico
during the tax year and denominator of
which is the total sales of the taxpayer
from any location within or outside of
the state during the tax year.
The election for the special factor
method applies to the tax year in which
the business notifies the Department of
their election, until the business notifies the Department, in writing, that the
election is terminated. The taxpayer,
however, shall not terminate the election until the method of apportioning
business income has been used by the
taxpayer for at least three consecutive
tax years, covering at least 36 calendar
months.
The statutory authority for this elective
method is in Section 7-4-10(C) NMSA
1978.

Single Weighted Sales Factor For Electing Manufacturers
For tax years beginning:				
January 1, 2016 through December 31, 2016

The apportionment formula is:

7x sales factor + 1.5x property factor + 1.5x payroll factor
10

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Definition of Headquarters
"Headquarters operation" means:
	
(a) the center of operations of
a business: 1) where corporate staff
employees are physically employed;
2)where centralized functions are performed, including administrative, planning, managerial, human resources,
purchasing, information technology
and accounting, but not including a call
center; 3) the function and purpose of
which is to manage and direct most aspects and regional headquarters if the
national headquarters is subordinate
only to the ownership of the business
or its representatives and the regional
headquarters is subordinate to the
national headquarters; or
	
(b) the center of operations of
a business: 1) the function and purpose
of which is to manage and direct most
aspects of one or more centralized functions; and 2) from which final authority
over one or more centralized functions
is issued.
How to Make the Election
To elect to use the headquarters operation apportionment formula, you must
notify the Department in writing no later
than the filing date of the first return to
which your election applies.
Submit your notification to make your
election or to terminate your election
to Taxation and Revenue Department,
CIT Unit, P.O. Box 630, Santa Fe, NM
87504-0630. For assistance, call (505)
827-0825 or toll free: (866) 809-2335,
option 4. Or, e-mail:
[email protected]
Use the instructions below to calculate
the apportionment percentage on
PTE-A, line 5.
Complete the property factor and
payroll factor on lines 1 and 2 even
if you elect to report by sales factor.
Compute the sales factor on line 3.
Transfer the amount in line 3 to line
5. Also complete lines A and B at the
bottom of Schedule PTE-A.
Exclusion 3
Eliminating one or more factors. If
the allocation and apportionment provisions of the Uniform Division of Income
for Tax Purposes Act do not fairly
represent the extent of your business

activity in New Mexico, you may without
prior approval, or the Department may
require if reasonable, the exclusion of
any one or more insignificant factors—
property, payroll, or sales.

______________________________
SCHEDULE PTE-B
LINE INSTRUCTIONS
______________________________
LINES 1 - 9. ALLOCATED NONBUSINESS INCOME TAXABLE TO
OWNERS
Schedule PTE-B must be used by entities to allocate income not connected to
the entity’s regular trade or business.
Direct and indirect expenses related
to allocated income must be deducted
from the related income. Expenses
related to allocated income are determined by the entity’s books and
records. If the entity’s books and records do not reflect proper amounts
for expenses, the entity may rely on
other reasonable methods.
If you have an entry in column 2, you
must also have an entry in column
1. The allocation cannot be correctly
computed if both columns are not
completed correctly.
Enter the following information on the
appropriate lines of PTE-B to allocate
income:
Line 1. Net Non-business Dividends.
Column 2: Total amount in column
1 is allocated to New Mexico if the
taxpayer’s commercial domicile is in
New Mexico.
“Commercial domicile” means the
principal place from which the taxpayer’s trade or business is directed
or managed.
Line 2. Net Non-business Interest.
Column 2: Total amount in column
1 is allocated to New Mexico if the
taxpayer’s commercial domicile is in
New Mexico.
Lines 3 and 4. Net Non-business
Rents and Royalties. Column 2: The
following net rent and royalty income

should be allocated to New Mexico if it
is non-business income:
1.	 Income from real property located
in New Mexico;
2.	 Income from all tangible personal
property if the taxpayer’s commercial domicile is in New Mexico and
the entity is not organized under the
laws of or taxable in the state where
the property is used;
3.	 Income from tangible personal
property that is used in New Mexico;
4.	 Income from intangibles (patents,
copyrights, franchises, trademarks
and licenses) used in New Mexico,
and
5.	 Income from intangibles if the taxpayer’s commercial domicile is in
New Mexico but the income from
the intangible is not taxable in the
state where the intangible is used.
A patent is used in New Mexico if it is
used in production, fabrication, manufacturing or other processing in New
Mexico.
A copyright is used in New Mexico if
printing or other production occurs in
New Mexico.
LINE 5. Net Profit or (Loss) on the
Sale or Exchange of Non-business
Assets. Column 2: The net gain or loss
from the sale or exchange of the following should be allocated to New Mexico
if it is non-business income:
1.	 Real property located in New Mexico;
2.	 Tangible personal property located in
New Mexico at the time it was sold;
3.	 Tangible personal property not located in New Mexico at the time it
was sold if:
	a.	the entity's commercial domicile
is within New Mexico, and
	 b.	 the gain was not taxable in the
state where the tangible personal property was located, and
4.	 Intangible personal property if the
entity’s commercial domicile is in
New Mexico.
Line 6. Net Non-business Partnership Income (Loss). Column 2: Nonbusiness partnership income should be
allocated to New Mexico to the extent
the partnership conducts business in
this state.

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Line 7. Other Net Non-business
Income (Loss). Attach a schedule to
identify all other allocated income.
_____________________________
CONSISTENCY IN REPORTING
______________________________
An entity is required to be consistent in:
•	 Classifying income as allocable or
apportionable;
•	 The valuation of property and its
inclusion in the property factor;
•	 The treatment of compensation for
the payroll factor; and
•	 The exclusion or inclusion of receipts in the sales factor for returns
filed in all states.
Any change or inconsistency from
prior year returns must be disclosed
in a statement attached to the return.
Identify the amounts and reasons for
the changes or inconsistencies.

______________________________
PETITION PROCEDURE OPEN TO
TAXPAYER
______________________________
If the above procedures for allocation and apportionment do not fairly
represent the extent of the taxpayer’s
business activity in New Mexico, the
taxpayer may petition, or the Secretary
of Taxation and Revenue may require,
that another method be used to apportion or allocate all or any part of the
taxpayer’s business income.
______________________________
AFTER YOU FILE YOUR RETURN
______________________________
At any time after filing your return, it
may be subject to further review, verification or correction. The State of New
Mexico, pursuant to reciprocal information exchange agreements, exchanges
information with the Internal Revenue
Service, certain other state agencies

and taxing authorities in other states.
If your tax return is adjusted or an assessment of additional tax is issued,
you will be provided a description of
your rights as a taxpayer. Our Publication FYI-406, Your Rights Under the
Tax Laws, describes in detail how to
dispute an adjustment or assessment
made by the Department through either
the claim for refund procedure or the
protest procedure. Publication FYI-406
is available by contacting your local
district tax office or by downloading
from the Department website at
www.tax.newmexico.gov. Click on
"Forms and Publications".

Reminder:
Write your correct federal employer
identification number (FEIN) on ALL forms, schedules,
payments and correspondence.

Privacy Notification
The New Mexico Taxation and Revenue Department requires taxpayers to furnish federal employer identification numbers
as a means of taxpayer identification. All information supplied electronically by taxpayers is protected using encryption
and fire walls. Taxpayer information on returns is protected in accordance with the confidentiality provisions of the Tax
Administration Act (Section 7-1-8 NMSA 1978).

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New Mexico Taxpayer Bill of Rights
Most tax transactions happen without
incident. In an imperfect world, however, occasional disagreements occur
through misunderstanding, mathematical error, missed deadlines, misplaced
papers, high volume of transactions
and many other situations. Over the
years the Legislature and the Department have established ways to handle
difficulties according to the provisions
of the state tax code. Following are
some of your rights. Should you wish
to consult the law itself, you will find
it in Sections 7-1-4.1 through 7-1-4.3
NMSA 1978:
•	 The right to available public information and prompt and courteous
tax assistance;
•	 The right to representation and
advice by counsel or other qualified
representatives at any time during
your interactions with the department according to provisions of
Section 7-1-24 NMSA 1978, or with
the Administrative Hearings Office
in accordance with the provisions
of the Administrative Hearings Office Act;
•	 The right to have audits, inspections
of records and meetings conducted
at a reasonable time and place
according to Section 7-1-11 NMSA
1978;
•	 The right to simple, non-technical
information explaining procedures,
remedies and rights during audit,
protest and collection proceedings
under the Tax Administration Act;
•	 The right to receive an explanation
of audit results and the basis for
audits, assessments or denials of
refunds that identify tax, interest
or penalty due;
•	 The right to seek review through
formal or informal proceedings of
findings or unfavorable decisions
arising from determinations during
audit or protest procedures according to Section 7-1-24 NMSA 1978
and the Administrative Hearings
Office Act;
•	 The right to have your tax information kept confidential unless other-

wise specified by law in Sections
7-1-8.1 through 7-1-8.10 NMSA
1978;
•	 The right to an abatement of an assessment of taxes incorrectly, erroneously or illegally made (Section
7-1-28 NMSA 1978) and a right to
seek a compromise of an asserted
tax liability. When the Secretary
of Taxation and Revenue in good
faith doubts that you owe us what
we claim you owe, you also have
the right to seek a compromise if
one exists in your particular case
(Section 7-1-20 NMSA 1978);
•	 The right to clear information of the
consequences if a tax assessment
is not paid, secured, protested or
otherwise provided for according
to Section 7-1-16 NMSA 1978. If
you become a delinque