Form Sev-5 - Report Of Severance Tax - Coal

INSTRUCTIONS FOR

REPORTING SEVERANCE TAX - COAL

TYPE OF COAL

Total Severance Tax Due - (1) Total short tons multiplied by the

(1) "Surface Coal" means all coal which is severed using

tax rate. (2) Total Intergovernmental Tax Credit from ITC worksheet.

surface mining methods.

(2) "Underground Coal" means all coal that is not surface

Date Payment of Tax Due, Section 7-1-13 NMSA 1978 - The

coal.

severance tax is to be paid on or before the twenty-fifth day of the

(3) "Intergovernmental Tax Credit" (ITC) for coal severed

month following the month in which the taxable event occurs.

and saved from tribal lands. Refer to Section 7-29C-2 NMSA

1978. Complete ITC worksheet.

Each form must be submitted in its entirety so that it can be

processed properly.

Price Per Unit - Sales Price

Copies of applicable tax acts may be obtained from the Taxation

Quantity - Number of short tons (two-thousand pounds) of coal

and Revenue Department.

severed and saved.

PENALTY AND INTEREST PROVISIONS OF THE TAX

Gross Value - Price per unit multiplied by the quantity.

ADMINISTRATION ACT

7-26-6.2 NMSA 1978

The following coal is exempt from the surtax imposed on coal

"SECTION 7-1-67. INTEREST ON DEFICIENCIES.

under the provisions of section 7-26-6 NMSA 1978.

If any tax imposed is not paid on or before the day on which

it becomes due, interest shall be paid to the state on such

Coal sold and delivered pursuant to coal sales contracts

amount from the first day following the day on which the tax

that are entered into on or after July 1, 1990, under which

becomes due, without regard to any extension of time or install-

deliveries start after July 1, 1990.

ment agreement, until it is paid.

Interest shall be due to the state at the rate of fifteen percent

Coal sold and delivered pursuant to a contract in effect on

(15%) a year, computed at the rate of .041% for each day the

July 1, 1990, that exceeds the average calendar year deliveries

payment is late."

under the contract during production years 1987, 1988 and 1989

or the highest contract minimum during 1987, 1988 or 1989

"SECTION 7-1-69. CIVIL PENALTY FOR FAILURE TO PAY TAX

whichever is greater.

OR FILE A RETURN.

In the case of failure, due to negligence or disregard of rules

If a contract existing on July 1, 1990 is renegotiated between

and regulations, but without intent to defraud, to pay when due

a producer and a purchaser after May 20, 1992 and if that

any amount of tax required to be paid or to file a return regardless

renegotiated contract requires the purchaser to take annual coal

of whether any tax is due, there shall be added to the amount two

deliveries in excess of the greater of the average calendar year

percent per month or a fraction thereof from the date the tax was

deliveries under the contract during production years 1987, 1988

due or from the date the return was required to be filed, not to

and 1989 or the highest contract minimum during 1987, 1988

exceed ten percent thereof, or a minimum of five ($5.00), which-

and 1989, the surtax imposed by Subsection B of Section 7-26-

ever is greater, as penalty, but the five dollar ($5.00) minimum

6 NMSA 1978 shall not apply to such excess deliveries for the

penalty shall not apply to taxes levied under the Income Tax Act

remaining term of the renegotiated contract.

[Chapter 7, Article 2 NMSA 1978] or the Corporate Income and

The taxpayer, prior to taking the exemption provided by this

Franchise Tax Act [Chapter 7, Article 2A NMSA 1978] or taxes

section, shall register any contract for the sale of coal that

administered by the department pursuant to Subsection B of

qualifies for the exemption from the surtax on forms provided by

Section 7-1-2 NMSA 1978.

the Secretary.

In the case of failure, with intent to defraud the state, to pay

If your company qualifies for the lower tax rate imposed by the

when due any amount of tax required to be paid, there shall be

above legislative change, under the first column of Form SEV-5

added to the amount fifty percent thereof or a minimum of twenty-

place the wording "Exempt Surface" or "Exempt Underground"

five dollars ($25.00), whichever is greater, as penalty."

on separate lines and calculate severance tax in accordance

with applicable tax rates.

Recovery of excess tax and corrections for erroneous reports are

prepared in identical manner. Amended reports must be pre-

Tax Rate - upon each short ton of coal severed and saved there

pared, consisting of a separate report for each reporting month.

shall be imposed on the severer a severance tax, plus surtax

Only those entries being corrected are to be included and must

pursuant to Section 7-26-9 NMSA 1978 or severance tax only

show these entries:

pursuant to Section 7-26-6.2 NMSA 1978. The total severance

surtax and severance tax if applicable on coal effective July 1,

(1) Original entry. Use parentheses to indicate a credit entry or

2005 is as follows:

the word "none" if there was no original entry.

Surface

Underground

(2) Corrected entry. This entry will show the corrections being

Base Tax Rate ................... $

0.570

0.550

made.

Surtax Rate ........................ $

0.80

0.77

Total Tax Rate .................. $

1.37

1.32

Surface

Underground

Exempt Coal ........................ $

0.570

0.550

See 7-26-6.2 NMSA 1978

Form Sev-5 - Report Of Severance Tax - Coal - 2007 Page 2

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