Renewable electricity producers would pay a production tax

Generating facilities would pay an excise tax of 3.75% of the taxable value of each megawatt-hour, or part of one, of renewable electricity produced in New Mexico. The tax would cover electricity made from solar, wind, hydropower, geothermal energy, or listed biomass sources, including certain agricultural, animal, timber, landfill, and digested waste materials. The taxable value would use the monthly average wholesale price for the Southwest regional market published by the federal Energy Information Administration. The tax would not apply to electricity produced by governments, qualifying tribal governments on sovereign territory, treaty-protected foreign governments, or producers using electricity for personal consumption within the stated small-surplus limit. The tax would apply to renewable electricity produced on or after January 1, 2027, with the taxable event occurring when the electricity is generated.

Taxpayers would pay the renewable energy production tax to the state by the 25th day of the month after the electricity was generated. The rule would apply to electricity covered by the proposed Renewable Energy Production Tax Act. The payment deadline would follow the month in which the taxable event occurred. The payment would be due on or before the 25th day of the month following the month of generation, for covered production beginning January 1, 2027.

The state Taxation and Revenue Department would administer and enforce the proposed tax, and net tax receipts would go to the severance tax permanent fund. The Tax Administration Act would cover administration and enforcement of the Renewable Energy Production Tax Act. The fund distribution would equal net receipts attributable to the renewable energy production tax. The proposed provisions would be subject to the Tax Administration Act unless another law conflicted with it. The proposed administration and revenue distribution would apply to the act’s provisions effective January 1, 2027.