2019 New Mexico Statutes
Chapter 7 - Taxation
Article 36 - Valuation of Property
Section 7-36-7 - Property subject to valuation for property taxation purposes.
A. Except for the property listed in Subsection B of this section or exempt pursuant to Section 7-36-8 NMSA 1978, all property is subject to valuation for property taxation purposes under the Property Tax Code if it has a taxable situs in the state.
B. The following property is not subject to valuation for property taxation purposes under the Property Tax Code:
(1) property exempt from property taxation under the federal or state constitution, federal law, the Property Tax Code or other laws, but:
(a) this does not include property all or a part of the value of which is exempt because of the application of the veteran, disabled veteran or head-of-family exemption;
(b) this provision does not excuse an owner from obligations to report the owner's property as required by regulation of the department adopted under Section 7-38-8.1 NMSA 1978 or to claim its exempt status under Subsection C of Section 7-38-17 NMSA 1978;
(c) this includes property of a museum that: 1) has been granted exemption from the federal income tax by the United States commissioner of internal revenue as an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended or renumbered; 2) is used to provide educational services; and 3) grants free admission to each student who attends a public school in the county in which the museum is located; and
(d) this includes property that is operated either as a community to which the Continuing Care Act [Chapter 24, Article 17 NMSA 1978] applies or as a facility licensed by the department of health to operate as a nursing facility, a skilled nursing facility, an adult residential care facility, an intermediate care facility or an intermediate care facility for the developmentally disabled; and is owned by a charitable nursing, retirement or long-term care organization that: 1) has been granted exemption from the federal income tax by the United States commissioner of internal revenue as an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended or renumbered; 2) donates or renders gratuitously a portion of its services or facilities; and 3) uses all funds remaining after payment of its usual and necessary expenses of operation, including the payment of liens and encumbrances upon its property, to further its charitable purpose, including the maintenance, improvement or expansion of its facilities;
(2) oil and gas property subject to valuation and taxation under the Oil and Gas Ad Valorem Production Tax Act [Chapter 7, Article 32 NMSA 1978] and the Oil and Gas Production Equipment Ad Valorem Tax Act [Chapter 7, Article 34 NMSA 1978]; and
(3) productive copper mineral property subject to valuation and taxation under the Copper Production Ad Valorem Tax Act [Chapter 7, Article 39 NMSA 1978]; for the purposes of this section, "copper mineral property" means all mineral property and property held in connection with mineral property when seventy-five percent or more, by either weight or value, of the salable mineral extracted from or processed by the mineral property is copper.
History: 1953 Comp., § 72-29-3, enacted by Laws 1973, ch. 258, § 15; 1981, ch. 37, § 53; 1982, ch. 28, § 3; 1990, ch. 125, § 3; 1995, ch. 12, § 9; 2000, ch. 92, § 2; 2000, ch. 94, § 2; 2001, ch. 217, § 1; 2008, ch. 46, § 1.
ANNOTATIONSCross references. — For constitutional provision as to equality in ad valorem taxation, see N.M. Const., art. VIII, § 1.
For constitutional provision as to tax exempt property, see N.M. Const., art. VIII, § 3.
For constitutional provision as to head of family and veteran exemptions, see N.M. Const., art. VIII, § 5.
For constitutional provision as to assessment of lands, see N.M. Const., art. VIII, § 6.
For tax assessment of land by reference to numbers given by county surveyor, see 4-42-13 NMSA 1978.
For Section 501(c)(3) of the Internal Revenue Code of 1986, see 26 USCS § 501(c)(3).
The 2008 amendment, effective February 28, 2008, added Subparagraph (d) of Paragraph (1) of Subsection B.
Applicability. — Laws 2008, ch. 46, § 2 provided that Laws 2008, ch. 46, § 1 was applicable to taxable years beginning on or after January 1, 2008.
The 2001 amendment, effective June 15, 2001, added Paragraph B(1)(c).
The 2000 amendment, effective March 7, 2000, inserted "disabled veteran" in Subsection B(1) and made minor stylistic changes.
The 1995 amendment, effective June 16, 1995, inserted "or exempt pursuant to Section 7-36-8 NMSA 1978" in Subsection A.
The 1990 amendment, effective March 7, 1990, in Subsection B, substituted "department" for "division" in Paragraph (1), added Paragraph (3), and made related stylistic changes.
Assessor's standing to raise the constitutionality of this section. — Where the Santa Fe county assessor appealed the district court's decision that petitioner, a retirement and continuing care community, was improperly denied a charitable property tax exemption on the grounds that by meeting the plain language requirements of 7-36-7(B)(1)(d) NMSA 1978, petitioner had also fulfilled the charitable use requirements for tax exemption under art. VIII, § 3 of the New Mexico constitution, the county assessor had standing to challenge the constitutionality of 7-36-7(B)(1)(d) NMSA 1978, because a justiciable controversy existed with regard to petitioner's claim of entitlement to a tax exemption and the county assessor is responsible and has the authority for the valuation of all property subject to valuation for property tax purposes. El Castillo Ret. Residences v. Martinez, 2017-NMSC-026, aff'g 2015-NMCA-041, and overruling La Vida Llena v. Montoya, 2013-NMCA-048, 299 P.3d 456.
Constitutional limitation on the legislature's power. — N.M. Const., art. VIII, § 3 operates as a limit on the legislature's power to redefine categories of property which will be exempt from taxation, and 7-36-7(B)(1)(d) NMSA 1978 may not be interpreted or applied to grant exemptions that are not authorized by art. VIII, § 3. El Castillo Ret. Residences v. Martinez, 2017-NMSC-026, aff'g 2015-NMCA-041, and overruling La Vida Llena v. Montoya, 2013-NMCA-048, 299 P.3d 456.
Where the Santa Fe county assessor appealed the district court's decision that petitioner, a retirement and continuing care community, was improperly denied a charitable property tax exemption, the New Mexico supreme court held that the district court erred in concluding that petitioner fulfilled the charitable use requirements for tax exemption under art. VIII, § 3 of the New Mexico constitution, because petitioner, a self-sustaining community that accepts and benefits only financially and medically screened residents based on requirements calculated in the interests of financial security for itself, did not create any substantial public benefit and therefore cannot be entitled to exemption from taxation under 7-36-7(B)(1)(d) NMSA 1978 or N.M. Const., art. VIII, § 3. El Castillo Ret. Residences v. Martinez, 2017-NMSC-026, aff'g 2015-NMCA-041, and overruling La Vida Llena v. Montoya, 2013-NMCA-048, 299 P.3d 456.
Property operated under the Continuing Care Act. — Section 7-36-7(B)(1)(d) NMSA 1978 does not require a minimum amount of donated or gratuitously rendered services or facilities for charitable purposes in order for a continuing care facility to receive the property tax exemption. La Vida Llena v. Montoya, 2013-NMCA-048, 299 P.3d 456.
Where protestant operated a continuing care facility pursuant to the Continuing Care Act, Section 24-17-1 NMSA 1978 et seq., had been granted an exemption from federal taxes, used all funds remaining after payment of its usual and necessary expenses of operation to further its charitable purpose, provided services to some medicare residents when the cost of their care exceeded medicare reimbursement, permitted its staff time to serve other charitable organizations, provided services for its foundation, and did not terminate resident agreements when residents did not pay, protestant donated or rendered gratuitously some part of its facilities and services for charitable services and was entitled to receive the property tax exemption. La Vida Llena v. Montoya, 2013-NMCA-048, 299 P.3d 456.
Property to provide educational services. — Property devoted primarily and substantially to traditional museum functions of: (1) the preservation and exhibition of significant aspects, artifacts, and works of our lives and history for the benefit of the general public's appreciation, study, and knowledge; and (2) the carrying on of museum-related educational programs and activities such as lectures, studies, publishing scholarly materials, and creating instructional materials, is property with uses and purposes that ought to be considered for educational purposes tax exemption pursuant to the state constitution. Georgia O'Keefe Museum v. County of Santa Fe, 2003-NMCA-003, 133 N.M. 297, 62 P.3d 754.
To qualify for the educational purposes tax exemption, a museum must adhere to a systematic approach to learning. This requires an ordered, methodical, structured, and regular learning opportunity provided by the museum owner whose primary goal and major purpose through the museum is to impart knowledge and information in order to educate the public in respect to a branch of learning and it requires substantial public benefit. Georgia O'Keefe Museum v. County of Santa Fe, 2003-NMCA-003, 133 N.M. 297, 62 P.3d 754.
Indian lands and property exempt. — New Mexico Const., art. XXI, § 2, clearly precludes state from taxing Indian lands and Indian property on the reservation. Prince v. Board of Educ., 1975-NMSC-068, 88 N.M. 548, 543 P.2d 1176.
Private non-Indian corporations cannot escape obligation to pay state taxes by locating their property on Indian reservations. Nothing forbids the imposition of such a tax, since it does not in any way infringe on the right of reservation Indians to make their own laws and be ruled by them. Prince v. Board of Educ., 1975-NMSC-068, 88 N.M. 548, 543 P.2d 1176.
State may tax property of corporation leasing land from Indian tribe. — Nothing prevents New Mexico from imposing a tax on the property of non-Indian corporations leasing land from the Navajo tribe, despite the fact that the property might be located on the reservation, because although the land itself cannot be taxed, the non-Indian property, which does not belong to and may not be acquired by the United States or reserved for its use, can. As private property owned by non-Indians who are not performing a federal function, it is subject to the taxing powers of this state. Prince v. Board of Educ., 1975-NMSC-068, 88 N.M. 548, 543 P.2d 1176.
Lease to construct housing on federal land subject to tax. — Congress having explicitly removed the bar of sovereign immunity as it applied to property belonging to the United States, the immunity granted the federal government by N.M. Const., art. VIII, § 3, and art. XXI, § 2, clearly was not available to one who had lease to construct military housing on federal land. It was his interest that was subject to taxation. Kirtland Heights, Inc. v. Board of Cnty. Comm'rs, 1958-NMSC-066, 64 N.M. 179, 326 P.2d 672.
Am. Jur. 2d, A.L.R. and C.J.S. references. — 71 Am. Jur. 2d State and Local Taxation §§ 191 to 220.
Duty to pay real-property taxes as affected by time of commencement or termination of life estate, 8 A.L.R.4th 643.
Exemption of nonprofit theater or concert hall from local property taxation, 42 A.L.R.4th 614.
Property tax: effect of tax-exempt lessor's reversionary interest on valuation of nonexempt lessee's interest, 57 A.L.R.4th 950.
Exemption from real-property taxation of residential facilities maintained by hospital for patients, staff, or others, 61 A.L.R.4th 1105.
Nursing homes as exempt from property taxation, 34 A.L.R.5th 529.
84 C.J.S. Taxation § 120.
