New Mexico Administrative Code
Title 3 - TAXATION
Chapter 16 - MOTOR VEHICLE FUEL TAXES
Part 204 - DEDUCTION - GASOLINE OR OTHER FUELS RETURNED
Section 3.16.204.9 - DETERMINING UNCOLLECTIBLE AMOUNTS

A. Amounts deductible as uncollectible shall be determined based on the accounting method employed by the person who has previously paid the petroleum products loading fee on the gasoline or special fuel, the sale of which created a debit to the account receivable maintained for that purchaser which was subsequently determined to be uncollectible. For purposes of this deduction, the balance of the account determined to be uncollectible shall be representative of the most recent sales transaction with the purchaser and gallons shall be determined by the source document (sales invoice, delivery ticket, etc.) used to post those transactions into the accounts receivable. Any payment or other credit to the account shall be applied to the oldest debit to that account in determining the balance of the uncollectible account.

B. For persons using an accrual basis of accounting, the deduction will be allowed for only those accounts which have actually been written off the books and records as uncollectible. For persons using other than an accrual basis of accounting, the deduction will be allowed for only those accounts which have been turned over to a third party for further collection activity. The term "turned over to a third party for further collection" includes those accounts which have been assigned to a collection agency or attorney to pursue the collection of the account on behalf of the creditor or those accounts where the creditor has pursued collection through a court of law where the creditor received but has not collected a judgment against the purchaser.