Form Rpd-41284 - Quarterly Oil And Gas Proceeds Withholding Tax Return Page 2
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5STATE OF NEW MEXICO - TAXATION AND REVENUE DEPARTMENT
RPD-41284
Rev. 09/04/2012
Quarterly Oil and Gas Proceeds Withholding Tax Return Instructions
Page 1 of 4
ABOUT THIS TAX: Effective October 1, 2003, remitters of
gas proceeds excludes "net profits interest" and other types
oil and gas proceeds from oil and gas production from a well
of interest the extent of which cannot be determined with
located in New Mexico must deduct and withhold tax from
reference to a specified share of the oil and gas production
each payment of oil and gas proceeds to a nonresident of
and excludes any amounts deducted by the remitter from
New Mexico (remittee). To calculate the withholding amount,
payments to interest owners or paid by interest owners to
multiply the effective rate for the reporting period by the gross
the remitter that are for expenses related to the production
amount of oil and gas proceeds that otherwise would have
from the well or cessation of production from the well for
been payable to the remittee. Effective January 1, 2011,
which the interest owner is liable.
legislation combines reporting and withholding provisions
"Gross oil and gas proceeds" means the amount of oil and
for pass-through entities with the Oil and Gas Proceeds
gas proceeds subject to oil and gas proceeds withholding
Withholding Tax Act. The name of the act changes to the Oil
tax and includes amounts deducted by the remitter for ex-
and Gas Proceeds and Pass-Through Entity Withholding Tax
penses and severance taxes, but does not include amounts
Act. Bulletin B-100.22, 2010 Legislative Summary, provides
deducted for expenses or taxes prior to receipt by the remit-
a summary of all changes that occurred with this legislation.
ter. If a taxpayer receives a Form 1099-Misc for its oil and
In 2012, legislation was passed that clarified and modified
gas proceeds, the gross amount is the amount reported
the requirements to withhold from oil and gas proceeds.
on federal Form 1099-Misc in box 2--royalties, and in box
Bulletin B-100.24, 2012 Legislative Summary, provides a
7--non-employee compensation.
summary of all changes that occurred with that legislation.
The following payments are not subject to the oil and
Important: Effective January 1, 2011, a remitter may no
gas proceeds withholding tax:
longer use Form RPD-41286, New Mexico Nonresident
•
"net profits interest" and other types of interest which
Recipient of Oil and Gas Proceeds Income Tax Agree-
cannot be linked to a specified share of the oil and
ment, but may instead use Form RPD-41353, Owner's
gas production.
or Remittee's Agreement to Pay Withholding on Behalf of
•
advance royalty payments, bonus payments, mini-
a Pass-Through Entity or Remitter, to show that a remittee
mum royalty payments, shut-in payments and rental
agrees to pay the tax due.
payments, provided that the payments are not offset
against a share of future production.
IMPORTANT DEFINITIONS:
"Remittee" means a person who is entitled to payment of oil
The well must be located in New Mexico, but if the
and gas proceeds by a remitter.
production is from a well subject to a unit or communitiza-
"Remitter" means a person who pays oil and gas proceeds
tion agreement whose area crosses state boundaries, the
to any remittee.
amount attributable to "oil and gas production from any well
"Oil and gas" means crude oil, natural gas, liquid hydrocar-
located in New Mexico" may be derived through the alloca-
bons or any combination thereof, or carbon dioxide.
tion methodology set out in the agreement.
For definitions of "Oil and gas proceeds" see "What are gross
Adjustments to the amount withheld: If a remitter receives
oil and gas proceeds?" below.
oil and gas proceeds from which an amount has been de-
ducted and withheld pursuant to the Oil and Gas Proceeds
What are gross oil and gas proceeds?
and Pass-Through Entity Withholding Tax Act, the remitter
"Oil and gas proceeds" means any amount derived from oil
may take credit for that amount in determining the amount
and gas production from any well located in New Mexico
the remitter must withhold and deduct. When an adjustment
and payable as royalty interest, overriding royalty interest,
occurs, include on line 2, the gross oil and gas proceeds
production payment interest, working interest or any other
from the eligible transaction to which the tax withheld was
obligation expressed as a right to a specified interest in
computed, thereby excluding that amount from oil and gas
the cash proceeds received from the sale of oil and gas
proceeds subject to withholding in line 3.
production or in the cash value of that production. Oil and
Oil and Gas Proceeds Withholding Tax Rate Table
If your report period falls between:
the effective rate is:
6.75%
Oct. 1, 2003
and
Dec. 31, 2004............................................................
5.70%
Jan. 1, 2005
and
Dec. 31, 2005 ..........................................................
5.30%
Jan. 1, 2006
and
Dec. 31, 2006 ...........................................................
5.30%
Jan. 1, 2007
and
Dec. 31, 2007 .........................................................
4.90%
Jan. 1, 2008
and
Thereafter .................................................................
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