Current through Register Vol. 35, No. 18, September 24, 2024
A.
POTASH MINERAL PROPERTY - MARKET
VALUE:
(1) The "market value of all
mineral production from potash mineral property" as that phrase is used in
Subsections B, D, and E of Section
7-36-24
NMSA 1978, means the amount for which all mineral production from potash
mineral property was sold during the year prior to the tax year provided that
the sale or sales were between willing buyers and sellers in the open market in
the usual and ordinary course of trade and competition and both seller and
buyer were equally free to bargain. The phrase "all mineral production from
potash mineral property" includes minerals produced other than
potash.
(2) If the market value of
all or a part of the mineral production from potash mineral property for the
year prior to the tax year cannot be determined under the preceding paragraph
because the mineral production is not sold, is used or consumed or is not sold
under the conditions described in Paragraph (1) of Subsection A of Section
3.6.5.31 NMAC, then the market value of the mineral production is that
reflected by sales of comparable mineral production from potash mineral
property and the application of generally accepted appraisal techniques. In
using the method of valuation described in this paragraph, the division
considers and makes appropriate adjustments to the value reflected by sales of
comparable mineral production from potash mineral property to account for the
existence of a demand for, and the accessibility of a market for, the mineral
production. In determining market value under this method, the division
compares the gross income from the property determined for federal income tax
purposes under Section 613 of the United States Internal Revenue Code of 1986,
as amended or renumbered. Section 3.6.5.31 NMAC, however, does not adopt the
valuation methods described in the United States treasury regulations for
Section 613, unless specifically indicated herein.
(3) If the market value of all or a part of
the mineral production for the year prior to the tax year cannot be determined
under the methods set forth in Paragraphs (1) and (2) of Subsection A of
Section 3.6.5.31 NMAC, then the market value is determined through the use of
the "proportionate profits method" as that phrase is described in United States
treasury regulations, Section 1.613-3, as amended or renumbered.
(4) The market value of muriate of potash and
sulphate of potash magnesia "fines" used in the manufacture of potassium
sulphate, although subgrade mineral products without a commercial market, is
determined on the basis of a computed sales price between that portion of a
taxpayer which produces the fines and that portion of the same taxpayer which
subsequently processes the fines. This computed sales price is determined by
use of a formula which takes into consideration the relevant factors generally
used in valuing the fines including, for example, but not as a limitation, the
processing costs, mineral content and particle size of the fines.
B.
POTASH MINERAL PROPERTY -
SURFACE VALUE FOR AGRICULTURAL OR OTHER PURPOSES: The valuation methods
used in determining the "surface value for agricultural or other purposes (of
property) held in connection with class one productive or nonproductive potash
mineral property, when the surface interest is held in the same ownership as
the mineral interests", as that phrase is used in Subsection C of Section
7-36-24
NMSA 1978, are those methods described in Section
7-36-15
NMSA 1978 and regulations thereunder except that, when the surface is used
primarily for agricultural purposes, the land shall be valued in accordance
with Section
7-36-20
NMSA 1978 and regulations thereunder.
C.
POTASH MINERAL PROPERTY - CLASS ONE
NONPRODUCTIVE POTASH MINERAL PROPERTY: Class one nonproductive potash
mineral property is valued on the basis of the value of the minerals in place
on such property in addition to the value determined pursuant to Subsection C
of Section
7-36-24
NMSA 1978.
D.
POTASH MINERAL
PROPERTY - ALLOCATION OF VALUES: The values of potash mineral property
are allocated among the governmental units in accordance with Subsection G of
Section
7-36-24
NMSA 1978. The surface value for agricultural or other purposes (of property)
held in connection with class one productive or nonproductive mineral property
and the value of class one nonproductive potash mineral property is allocated
to the governmental unit or units in which the property is located on the basis
of the value for those properties determined for the tax year.
