New Mexico Administrative Code
Title 3 - TAXATION
Chapter 8 - ESTATE TAX
Part 8 12 - PAYMENT OF ESTATE TAX
Section 3.8.12.10 - FURNISHING SECURITY FOR PAYMENT OF ESTATE TAX

A. To be acceptable under the terms of Section 7-7-12 NMSA 1978, a surety bond must be underwritten by a corporate surety authorized to transact business in New Mexico.

B. Other acceptable security may be an assignment of a certificate of deposit or a savings account executed by a state or national bank or federally insured savings association authorized to do business in New Mexico, or by an irrevocable letter of credit issued by a state or national bank authorized to do business in New Mexico. Interest, if any, accumulating thereon shall accrue to the assignor or customer causing issuance of the letter of credit.

C. Example 1: The form of an acceptable surety bond is:

SURETY BOND FOR PAYMENT TO THE TAXATION AND REVENUE DEPARTMENT OF THE STATE OF NEW MEXICO OF ESTATE TAX LIABILITY.

Bond Number

(_______________)

KNOW ALL PERSONS BY THESE PRESENTS:

That (Principal's Name) as Principal, and (Surety's Name) , a corporate surety authorized to transact business in New Mexico, as Surety, are held and firmly bound unto the Taxation and Revenue Department of the State of New Mexico, as Obligee, in the sum of $_______________ lawful money of the United States, for the payment of which we bind ourselves, our heirs, executors and administrators, successors and assigns, jointly, severally, and firmly by this document.

NOW, THEREFORE, the condition of this obligation is such that if the above Principal shall comply with the applicable statutes of the State of New Mexico and with all regulations and rulings of the Taxation and Revenue Department of the State of New Mexico for the estate of _______________, decedent, concerning reporting and payment of estate tax liability, then the above obligations shall be void; otherwise they shall remain in full force and effect; and if the Principal fails to pay estate tax when due or becomes a delinquent taxpayer pursuant to Section 7-1-16 NMSA 1978, and the above statutes, regulations and rulings, the above Surety shall pay over to the Taxation and Revenue Department of the State of New Mexico the amount of the tax due up to the stated amount of this bond.

It is understood that the aggregate liability of the Surety shall not exceed the sum of this bond, this bond is continuous in form, and if the Surety shall so elect, this bond may be cancelled by giving thirty days' notice in writing to said Obligee.

Witness/Attest Surety

____________________________

______________________________

____________________________

______________________________

By

______________________________

Attorney-In-Fact

Principal

____________________________

______________________________

____________________________

______________________________

By ______________________________

NOTE: A POWER OF ATTORNEY SHOULD BE ATTACHED

D. Example 2: The form of an acceptable agreement of assignment is shown in the following letter:

MODEL LETTER TO BE FOLLOWED BY FINANCIAL

INSTITUTION IN TYPING LETTER ON THEIR LETTERHEAD

DATE:

Taxation and Revenue Department

P.O. Box 630

Santa Fe, New Mexico 87504-0630

Dear Secretary:

This is to certify that (Assignor's Name) has deposited with this institution (Dollar Amount of Deposit) in savings account number, or certificate of deposit number _______________. This amount, exclusive of any interest which may accrue, is being held to meet the security requirements of Section 7-7-12 NMSA 1978. If the above named depositor fails to pay estate tax when due or at any time becomes a delinquent taxpayer under Section 7-1-16 NMSA 1978, this institution shall, upon demand of the Secretary of Taxation and Revenue, pay over the aforesaid amount to the Taxation and Revenue Department or so much thereof as the Secretary shall demand.

No withdrawals from the account identified above will be permitted without the written permission of the Taxation and Revenue Department of the State of New Mexico.

Very truly

yours,

BANK

OFFICER

TITLE