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Taxation and Revenue Department Joseph Montoya Building Post Office Box 630 Santa Fe, New Mexico 87504-0630

[3.16.200 - 205 NMAC]

REGULATIONS PERTAINING TO THE PETROLEUM PRODUCTS LOADING FEE ACT SECTION 7-13A-1 to 7-13A-6 NMSA 1978

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TABLE OF CONTENTS

TABLE OF CONTENTS 7-13A-1. SHORT TITLE 3.16.200.8 - Citations 7-13A-2. DEFINITIONS 7-13A-3. IMPOSITION AND RATE OF FEE--DENOMINATION AS "PETROLEUM PRODUCTS LOADING FEE". 3.16.202.7 - Definitions 3.16.202.8 - Incidence of fee 3.16.202.9 - Preemption of tax by federal law 7-13A-4. EXEMPTIONS 3.16.203.8 - Satisfactory proof 3.16.203.9 - Sales to other distributors are not deductible 3.16.203.10 - Indirect sales to the United States or for export 3.16.203.11- Deduction - sales to a Non-United States signatory of the North Atlantic treaty 7-13A-5. DEDUCTION -- GASOLINE OR SPECIAL FUELS RETURNED 3.16.204.8 - Subsequent collection of uncollectible accounts or subsequent sale of returned products 3.16.204.9 - Determining uncollectible amounts 7-13A-6. FEE RETURNS -- PAYMENT OF FEE 3.16.205.8 - Petroleum products loading fee return 3.16.205.9 - Determination of timeliness 3.16.205.10 - Change of address

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3.16 NMAC REGULATIONS PERTAINING TO THE PETROLEUM PRODUCTS LOADING FEE ACT SECTION 7-13A-1 to 7-13A-6 NMSA 1978

7-13A-1. SHORT TITLE.-Chapter 7, Article 13A NMSA 1978 may be cited as the Petroleum Products Loading Fee Act.

3.16.200.8 - CITATIONS All statutory references in Parts 200 through 205 of Chapter 16 are to the New Mexico Statutes Annotated, 1978 (NMSA 1978). [11/7/90, 12/31/96; 3.16.200.8 NMAC - Rn, 3 NMAC 17.1.8 & A, 6/14/01]

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7-13A-2. DEFINITIONS.--As used in the Petroleum Products Loading Fee Act: A. "department" means the taxation and revenue department, the secretary of taxation and revenue or any employee of the department exercising authority lawfully delegated to that employee by the secretary; B. "distributor" means any person registered or required to be registered as a rack operator or distributor for purposes of the Gasoline Tax Act and any person registered or required to be registered as a rack operator or special fuel supplier for purposes of the Special Fuels Supplier Tax Act; C. "gallon" means the quantity of liquid necessary to fill a standard United States gallon liquid measure, which is approximately 3.785 liters, or that same quantity adjusted to a temperature of sixty degrees fahrenheit at the election of any distributor, but a distributor shall report on the same basis for a period of at least one year; D. "load" means eight thousand gallons of petroleum product; E. "loading" means the act of placing or causing to be placed any petroleum product that is produced, refined, manufactured, blended or compounded at a refinery in this state or stored at a pipeline terminal in this state into tank cars, tank trucks, tank wagons or other types of transportation equipment or into any tank or other container from which sales or deliveries not involving transportation are made; F. "person" means an individual or any other legal entity, including any gas, water or electric utility owned or operated by a county, municipality or other political subdivision of the state. "Person" also means, to the extent permitted by law, any federal, state or other government or any department, agency or instrumentality of the state, county, municipality or any political subdivision thereof; G. "petroleum product" means gasoline as defined in the Gasoline Tax Act and special fuel as defined in the Special Fuels Supplier Tax Act; H. "secretary" means, unless the context indicates another meaning, the secretary of taxation and revenue or the secretary's delegate; and I. "unobligated balance of the corrective action fund" means corrective action fund equity less all known or anticipated liabilities against the fund. (Laws 1997, Chapter 192, Section 4)

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7-13A-3. IMPOSITION AND RATE OF FEE--DENOMINATION AS "PETROLEUM PRODUCTS LOADING FEE". -A. For the privilege of loading gasoline or special fuel from a rack at a refinery or pipeline terminal in this state into a cargo tank, there is imposed a fee on the distributor at a rate provided in Subsection C of this section on each gallon of gasoline or special fuel loaded in New Mexico on which the petroleum products loading fee has not been previously paid. B. For the privilege of importing gasoline or special fuel into this state for resale or consumption in this state there is imposed a fee determined as provided in Subsection C of this section on each load of gasoline or special fuel imported into New Mexico for resale or consumption on which the petroleum products loading fee has not been previously paid. For the purposes of this section, "load" means eight thousand gallons of gasoline or special fuel. To determine how many loads a person is to report under the provisions of this section, the person shall divide by eight thousand the total gallons of gasoline reported for the purposes of Section 7-13-3 NMSA 1978 as adjusted under the provisions of Section 7-13-4 NMSA 1978 and the total gallons of special fuels received in New Mexico less any gallons exempted under Section 7-13A-4 NMSA 1978. Loads shall be calculated to the nearest one-hundredth of a load. C. The fee imposed by this section is and may be referred to as the "petroleum products loading fee" and shall be one hundred fifty dollars ($150) per load or whichever of the following applies: (1) in the event the secretary of environment certifies that the unobligated balance of the corrective action fund at the end of the prior fiscal year equals or exceeds eighteen million dollars ($18,000,000) the fee shall be set at forty dollars ($40.00) per load; (2) in the event the secretary of environment certifies that the unobligated balance of the corrective action fund at the end of the prior fiscal year exceeds twelve million dollars ($12,000,000) but is less than eighteen million dollars ($18,000,000) the fee shall be set at eighty dollars ($80.00) per load; (3) in the event the secretary of environment certifies that the unobligated balance of the corrective action fund at the end of the prior fiscal year exceeds six million dollars ($6,000,000) but is less than twelve million dollars ($12,000,000) the fee shall be set at one hundred twenty dollars ($120) per load; and (4) in the event the secretary of environment certifies that the unobligated balance of the corrective action fund at the end of the prior fiscal year is less than six million dollars ($6,000,000) the fee shall be set at one hundred fifty dollars ($150) per load. D. The amount of the petroleum products loading fee set pursuant to Paragraph (1), (2), (3) or (4) of Subsection C of this section shall be imposed on the first day of the month following expiration of ninety days after the end of the fiscal year for which the certification was made. 3.16 NMAC Page 3

E. As used in this section, "unobligated balance of the corrective action fund" means corrective action fund equity less all known or anticipated liabilities against the fund. (Laws 1996, Chapter 82, Section 2)

3.16.202.7 - DEFINITIONS For the purposes of this part: A. "Indian tribe" means: (1) an Indian nation, tribe or pueblo, including: (a) any political subdivision, agency or department of that Indian nation, tribe or pueblo; (b) any incorporated or unincorporated enterprise of the Indian nation, tribe or pueblo or its political subdivisions, agencies or departments; and (c) any corporation required to be considered an Indian and therefore a member of the Indian nation, tribe or pueblo under Eastern Navajo Industries, Inc. v. Bureau of Revenue, 552 P.2d 805 (N.M. Ct. App. 1976); and (2) a member of the Indian nation, tribe or pueblo. B. "tribe's territory" means that part of Indian country in New Mexico reserved formally or informally for that Indian nation, tribe or pueblo, including its dependent Indian communities, and, with respect to a member of that tribe, any land in New Mexico allotted, reserved or held in trust by the United States for that member. [12/31/96; 3.16.202.7 NMAC - Rn, 3 NMAC 17.3.7 & A, 6/14/01] 3.16.202.8 - INCIDENCE OF FEE A. The duty to report and pay the petroleum products loading fee is imposed on these persons at these times: (1) the distributor when it loads the petroleum products from a rack at a refinery or pipeline terminal in this state into a cargo tank; or (2) the person, whether a distributor or not, who imports petroleum products into New Mexico for sale or consumption in this state at the time of importation. B. The duty to report and pay the fee is not transferred when the petroleum products are sold or otherwise transferred to another person. C. Example: X is a refiner and a registered distributor. X loads petroleum products into tank trucks at its own refinery and delivers the products to Y. Y is an Indian tribe; Y is also a registered distributor. X must report and pay the petroleum products loading fee with respect to these products. X loaded the products. X may not transfer the obligation to report and pay to anyone else. [12/31/96; 3.16.202.8 NMAC - Rn, 3 NMAC 17.3.8, 6/14/01] 3.16.202.9 - PREEMPTION OF TAX BY FEDERAL LAW A. When imposition of the fee is prohibited by federal law, no petroleum products loading fee applies when a distributor who is an Indian tribe loads petroleum products on its own tribe's territory. 3.16 NMAC Page 4

B. When imposition of the fee is prohibited by federal law, no petroleum products loading fee applies when a distributor who is an Indian tribe imports petroleum products directly onto the tribe's territory without crossing any land within New Mexico that is not the tribe's territory. C. If an Indian tribe is a distributor and it either loads petroleum products at any place in New Mexico other than on the tribe's territory or imports petroleum products into any part of New Mexico other than directly onto the tribe's territory, imposition of the petroleum products loading fee is not barred by federal law and that distributor must report and pay the fee. D. Like any other distributor, an Indian tribe that is a registered distributor is not liable for reporting and payment of the petroleum products loading fee with respect to the loading or importation of petroleum products by another distributor. This shall not be construed to prohibit the distributor who reports and pays the petroleum products loading fee from adjusting the price of the petroleum products it sells to other distributors or customers to cover the cost of the fee paid. [12/31/96; 3.16.202.9 NMAC - Rn, 3 NMAC 17.3.9, 6/14/01]

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7-13A-4. EXEMPTIONS.-A. Petroleum products that are either loaded into cargo tanks in New Mexico and exported for resale and consumption outside of New Mexico or are imported into New Mexico and subsequently exported for resale and consumption outside of New Mexico are exempt from the imposition of the petroleum products loading fee. B. Petroleum products sold to the United States or any agency or instrumentality thereof for the exclusive use of the United States or any agency or instrumentality thereof are exempt from the imposition of the petroleum products loading fee.

3.16.203.8 - SATISFACTORY PROOF A. Satisfactory proof of the export of petroleum product consists of the proof required under Section 3.16.4.8 NMAC with respect to gasoline and under Section 3.16.109.9 NMAC with respect to special fuels. B. Proof of sale to the United States or any agency or instrumentality thereof or a NATO force shall be furnished to the department upon request. Proof of sale shall consist of, for sales of gasoline, the documentation required under Section 3.16.4.8 NMAC and, for special fuel, the documentation required under Section 3.16.109.9 NMAC. C. Copies of all documents supporting deductible sales must be retained for at least three years from the end of the calendar year in which the petroleum product was exported from New Mexico for resale and consumption outside of New Mexico or was sold to the United States. [11/7/90, 12/31/96, 4/15/98; 3.16.203.8 NMAC - Rn, 3 NMAC 17.4.8 & A, 6/14/01] 3.16.203.9 - SALES TO OTHER DISTRIBUTORS ARE NOT DEDUCTIBLE Petroleum product loaded or imported by a distributor and sold to another distributor may not be deducted from the amount of petroleum product loaded in New Mexico, even though the other distributor is bonded and registered, because the purchasing distributor did not "load" petroleum product within the meaning of the act. [11/7/90, 12/31/96, 4/15/98; 3.16.203.9 NMAC - Rn, 3 NMAC 17.4.9, 6/14/01] 3.16.203.10 - INDIRECT SALES TO THE UNITED STATES OR A NATO FORCE FOR EXPORT A. The petroleum products loading fee consequences of sales of petroleum product to the United States or a NATO force by a wholesaler, dealer or retailer or for export for resale and consumption outside of New Mexico are illustrated by the following examples. These examples concern only the liability of the parties to the department and do not affect the obligation of any party to pay the price for the petroleum products to the seller. The fact that the price may include an amount corresponding to the petroleum products loading fee does not make that amount a fee on the purchaser. B. Examples: 3.16 NMAC Page 6

(1) X, a distributor, paid the petroleum product loading fee with respect to one hundred (100) gallons of petroleum product loaded or imported in May and resold the petroleum product to Y, a wholesaler or dealer. Y then sold the petroleum product in that same May to the United States or a NATO force. If Y furnishes satisfactory proof to X, X may either deduct the one hundred (100) gallons from the amount of petroleum product subject to the petroleum product loading fee for that month of May, or may elect to take the deduction in any subsequent month in which X is subject to the fee for 100 or more gallons of petroleum product. Satisfactory proof of Y's sale to the United States or NATO force is required to be retained by both X and Y for at least three years from the end of the calendar year in which the petroleum product was sold. (2) X, a distributor, paid the petroleum product loading fee with respect to one hundred (100) gallons of petroleum product loaded or imported in May, and resold the petroleum product to Y, a wholesaler or dealer, who resold it to Z, a retailer. Z sold ten (10) gallons to the United States when a United States government vehicle filled up at Z's station in that same May. Z reports to Y that this amount of petroleum product had been sold to the United States. If Y furnishes satisfactory proof to X, X may deduct ten (10) gallons from the amount of petroleum product subject to the fee in that May, or any subsequent month in which X is subject to the fee for 100 or more gallons of petroleum product. Satisfactory proof of Z's sale to the United States is required to be retained by X and Y for at least three years from the end of the calendar year in which the petroleum product was sold. (3) X, a distributor, paid the petroleum product loading fee with respect to one hundred (100) gallons of petroleum product loaded or imported in May, and resold the petroleum product to Y, a wholesaler or dealer. Y delivers in that same May the one hundred (100) gallons of petroleum product to a customer in Texas. If Y furnishes satisfactory proof to X, X may deduct one hundred (100) gallons from the amount of petroleum product subject to the fee in that May, or any subsequent month in which X is subject to the fee for 100 or more gallons of petroleum product. Satisfactory proof of Y's export is required to be retained by both X and Y for at least three years from the end of the calendar year in which the sale was made. [11/7/90, 12/31/96, 4/15/98; 3.16.203.10 NMAC - Rn, 3 NMAC 17.4.10 & A, 6/14/01] 3.16.203.11 - DEDUCTION - SALES TO A NON-UNITED STATES SIGNATORY OF THE NORTH ATLANTIC TREATY A. For purposes of this section: (1) "NATO signatory" means a nation, other than the United States, that is a contracting party to the North Atlantic Treaty; (2) "NATO force" means any NATO signatory's military unit or force or civilian component thereof present in New Mexico in accordance with the North Atlantic Treaty; and (3) "Member of a NATO force" means the military and civilian personnel of the NATO force and their dependents. B. Pursuant to Article XI, Section 11 of the North Atlantic Treaty, petroleum products sold to a NATO force may be deducted from the total amount of petroleum products loaded in New Mexico. C. [Reserved.] D. Copies of all documents supporting deductible sales must be retained for at least three years from the end of the calendar year in which the petroleum products were sold. 3.16 NMAC Page 7

E. Pursuant to Article IX, Section 8 of the North Atlantic Treaty, petroleum products sold to a member of a NATO force for the private use of that member and not for the use of the NATO force are not deductible and are subject to the petroleum products loading fee. F. Section 3.16.203.11 NMAC is applicable to sales made to a NATO force on or after July 1, 1995. [12/31/96; 4/15/98; 3.16.203.11 NMAC - Rn, 3 NMAC 17.4.11 & A, 6/14/01]

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7-13A-5. DEDUCTION -- GASOLINE OR SPECIAL FUELS RETURNED.-Refunds and allowances made to buyers for gasoline or special fuels returned to the refiner, pipeline terminal operator or distributor or amounts of gasoline or special fuels, the payment for which has not been collected and has been determined to be uncollectible pursuant to provisions of regulations issued by the secretary may be deducted form the gallons used to determine loads for the purposes of calculating the petroleum products loading fee. If such a payment is subsequently collected, the gallons represented shall be included in determining loads. The deduction under the provisions of this section shall not be allowed if the petroleum products loading fee has not been paid previously on the petroleum products that were returned to the seller or the sale of which created an uncollectible debt.

3.16.204.8 - SUBSEQUENT COLLECTION OF UNCOLLECTIBLE ACCOUNTS OR SUBSEQUENT SALE OF RETURNED PRODUCTS Any person, who has previously paid the petroleum products loading fee and deducted an amount for gallons of petroleum product which represents an account which has been determined to be uncollectible, shall pay the petroleum products loading fee when the total or any portion of the amount of the uncollectible account is subsequently collected. Any person, who has paid the petroleum products loading fee and deducted an amount for gallons of petroleum product returned by the purchaser, shall be liable for the petroleum products loading fee when the returned product is resold. [11/7/90, 12/31/96; 3.16.204.8 NMAC - Rn, 3 NMAC 17.5.8, 6/14/01] 3.16.204.9 - DETERMINING UNCOLLECTIBLE AMOUNTS A. Amounts deductible as uncollectible shall be determined based on the accounting method employed by the person who has previously paid the petroleum products loading fee on the gasoline or special fuel, the sale of which created a debit to the account receivable maintained for that purchaser which was subsequently determined to be uncollectible. For purposes of this deduction, the balance of the account determined to be uncollectible shall be representative of the most recent sales transaction with the purchaser and gallons shall be determined by the source document (sales invoice, delivery ticket, etc.) used to post those transactions into the accounts receivable. Any payment or other credit to the account shall be applied to the oldest debit to that account in determining the balance of the uncollectible account. B. For persons using an accrual basis of accounting, the deduction will be allowed for only those accounts which have actually been written off the books and records as uncollectible. For persons using other than an accrual basis of accounting, the deduction will be allowed for only those accounts which have been turned over to a third party for further collection activity. The term "turned over to a third party for further collection" includes those accounts which have been assigned to a collection agency or attorney to pursue the collection of the account on behalf of the creditor or those accounts where the creditor has pursued collection through a court of law where the creditor received but has not collected a judgment against the 3.16 NMAC Page 9

purchaser. [11/7/90, 12/31/96; 3.16.204.9 NMAC - Rn, 3 NMAC 17.5.9 & A, 6/14/01]

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7-13A-6. FEE RETURNS -- PAYMENT OF FEE. -Any person who either loads gasoline or special fuel in New Mexico and any person who imports gasoline or special fuel into New Mexico for resale or consumption in New Mexico shall file petroleum products loading fee returns in form and content as prescribed by the secretary on or before the twentyfifth day of the month following the month in which petroleum products are either loaded in New Mexico or imported into New Mexico. Such returns shall be accompanied by payment of the amount of the petroleum products loading fee due.

3.16.205.8 - PETROLEUM PRODUCTS LOADING FEE RETURN The petroleum products loading fee shall be submitted on forms provided or approved by the department and must be signed by the distributor or the distributor's authorized agent. [11/7/90, 12/31/96; 3.16.205.8 NMAC - Rn, 3 NMAC 17.6.8, 6/14/01] 3.16.205.9 - DETERMINATION OF TIMELINESS Determination of timeliness for notices, returns, applications and payments of petroleum products loading fee imposed under the Petroleum Products Loading Fee Act will be made in conformance with the requirements of Section 7-1-9 NMSA 1978 and regulations thereunder. [11/7/90, 12/31/96; 3.16.205.9 NMAC - Rn, 3 NMAC 17.6.9 & A, 6/14/01] 3.16.205.10 - CHANGE OF ADDRESS Persons subject to the provisions of the Petroleum Products Loading Fee Act must inform the department of any change of address. Any notice to such person is presumed to be effective and binding upon that person when it is sent to the last address shown in the department's records. [11/7/90, 12/31/96; 3.16.205.10 NMAC - Rn, 3 NMAC 17.6.10, 6/14/01]

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