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New Mexico sales tax notices

Got a letter from the New Mexico Taxation and Revenue Department (Tax & Rev)? Find it below to see what it means, why businesses usually receive it, and what to do next.

Sources checked

Tax authority

New Mexico Taxation and Revenue Department (Tax & Rev) (opens in a new tab)

Disagree with a notice?

To dispute an assessment, file a written protest with the Secretary of Tax & Rev. You can do this without paying. Or pay the tax and then file a refund claim. Choosing one remedy gives up the other. File the protest in TAP ('Protest a Letter', using the Letter ID) or on Form ACD-31094. The protest must name the tax, the grounds, and the relief you want, and summarize your evidence. Pay any part you do not dispute, or set up an installment agreement, by the protest deadline. Unresolved protests go to the Administrative Hearings Office.

Deadline: 90 days from the mailing date of the assessment (or of another notice or demand)

Source: New Mexico Taxation and Revenue Department (Tax & Rev) (opens in a new tab)

Balance due

A bill for tax, penalty, or interest the authority says is unpaid.

Balance due

Statement of Account

One of the first notices Tax & Rev sends when a business has not filed a return or owes money to the state. It explains the problem.

Why you got it

  • An unpaid balance on the account
  • A return that has not been filed

What to do

  1. Check the periods and amounts listed, and file any returns that are missing
  2. Pay the tax in full or set up a payment plan through TAP
  3. Reply by any deadline in the letter to avoid liens and levies
  4. If a penalty was assessed and you were not negligent, you can protest it within 90 days of the mailing date

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Source: Compliance : All NM Taxes (opens in a new tab)

Assessment

A proposed or final determination of tax owed, sometimes estimated when returns were never filed.

Assessment

Notice of Assessment

An initial notice that tax, such as gross receipts tax, is owed. It is also sent when a required return was not filed. It is the formal assessment that starts the 90-day protest period.

Why you got it

  • Not filing a required gross receipts tax return
  • Owing tax, penalty, or interest to the state, including after an audit

What to do

  1. Read the letter, keep the Letter ID, and check the periods and amounts against your records. If it is for a return you did not file, file the return
  2. Pay the tax you agree with, or set up a payment plan in TAP
  3. To dispute the tax, or to ask for the penalty to be abated because you were not negligent, file a written protest within 90 days (TAP 'Protest a Letter' or Form ACD-31094)

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: 90 days from the mailing date to protest

Source: Compliance : All NM Taxes (opens in a new tab)

Audit

A request for records or notice that the authority is examining your returns.

Audit

Audit notification

Tax & Rev usually mails a first notice that an audit is coming, giving time to gather records. A second notice, usually from the auditor by mail or phone, assigns the audit of your books and records.

Why you got it

  • The business has been selected for a field or desk audit

What to do

  1. Start gathering business records for the audit period
  2. If a representative who is not a New Mexico attorney or CPA will act for you, submit Form ACD-31102
  3. At the end of a field audit, review the audit work papers and findings with the auditor

Source: FYI-400: Tax Audits and Protest Procedures (opens in a new tab)

Collections

Enforcement on unpaid balances, such as liens, levies, warrants, or referral to a collection agency.

Collections

Notice of Intent to Lien

A warning sent when a balance is unpaid and delinquent. It says Tax & Rev may file a Notice of Claim of Tax Lien on the taxpayer's property.

Why you got it

  • An assessed balance that remains unpaid and has become delinquent

What to do

  1. Pay in full, or set up a payment plan before the deadline in the notice
  2. Include the Letter ID in any reply
  3. For a lien already filed, ask the lien division for a payoff amount

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Source: Compliance : All NM Taxes (opens in a new tab)

Collections

Final Notice Before Seizure

A last warning before Tax & Rev collects a delinquent balance by seizing property. This can include a Warrant of Levy on bank accounts, wages, or other funds.

Why you got it

  • A delinquent balance that is still unpaid after earlier notices

What to do

  1. Reply before the deadline, because the actions that follow cannot be undone
  2. Pay in full, or set up a payment plan
  3. If a levy is served, it can be released by posting security or paying in full

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Source: Compliance : All NM Taxes (opens in a new tab)

Collections

Notice of Intent to Outsource

A letter warning that the account will be sent to a private collection agency if you do not respond.

Why you got it

  • An unpaid tax debt that has not been resolved with Tax & Rev

What to do

  1. Contact Tax & Rev to pay or set up a payment plan before the account is referred
  2. If an agency is assigned, work with it to resolve the account

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Source: Compliance : All NM Taxes (opens in a new tab)

Ask for penalty relief

Penalties on a New Mexico notice aren't always final. You can ask for them to be waived. Follow the steps below, including anything the state requires you to file or pay before it reviews the request.

Penalty abatement through a formal protest (nonnegligence)

ACD-31094 (Formal Protest)
  1. File any missing returns, and pay the tax you do not dispute or set up an installment agreement by the protest deadline
  2. Within 90 days of the assessment's mailing date, file a formal protest in TAP ('Protest a Letter', using the Letter ID) or on Form ACD-31094, asking for the penalty to be abated
  3. Explain why you were not negligent and summarize your evidence

What qualifies: Nonnegligence under 3.1.11.11 NMAC, such as being misled by a Department employee, injury or prolonged illness, physical damage to records or the business, reasonable reliance on competent tax counsel after full disclosure, or (for out-of-state businesses) good-faith doubt about nexus

Source: 3.1.11 NMAC - New Mexico Administrative Code (State Records Center and Archives) (opens in a new tab)

Before you respond

  • Check the date on the notice. Response windows usually run from that date, not the day you open it.
  • Match the account number and filing period to your own records before paying or disputing.
  • If returns are missing, filing the actual returns usually replaces an estimated bill. Confirm how on the notice or with the authority.
  • Ask about penalty relief before paying penalties, and check what must be paid with the request. See how
  • Keep a copy of the notice and everything you send back.

This page is general information, not tax or legal advice. Notice names and procedures change, so always follow the instructions on your notice and the official sources linked above.

Need the rates, nexus thresholds and filing rules? Read the New Mexico sales tax guide.

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