Granting Amnesty Under SST Would Violate New Mexico Constitution

In response to an inquiry by a New Mexico state legislator, the Attorney General of New Mexico has ruled that granting amnesty to a seller under the Streamlined Sales and Use Tax Agreement (SSUTA) for New Mexico gross receipts taxes owed on sales made during the period the seller was not registered in the state would violate the New Mexico Constitution. Granting amnesty to the seller would constitute a subsidy to the seller’s business, in violation of the Anti-Donation clause of Article IV of the state constitution. The state may not confer something of value to a private entity or individual without receiving something in return. Additionally, Article IV prohibits diminishing or extinguishing an obligation already incurred and owed to the state. The gross receipts tax on goods and services is an obligation that the state constitution prohibits the state from excusing, either through legislation or agreement. New Mexico is not currently a member of SSUTA. (Opinion No. 12-01, New Mexico Attorney General, January 9, 2012)

Posted on May 21, 2012