To determine the taxable value of oil and of other liquid hydrocarbons removed from natural gas at or near the wellhead, of carbon dioxide, of helium, of non-hydrocarbon gases, of natural gas from new production natural gas wells and of natural gas severed after June 30, 1990, there shall be deducted from the value of products:

A. royalties paid or due the United States or the state of New Mexico;

B. royalties paid or due any Indian tribe, Indian pueblo or Indian that is a ward of the United States of America; and

C. the reasonable expense of trucking any product from the production unit to the first place of market.

History: 1978 Comp., § 7-29-4.1, enacted by Laws 1980, ch. 62, § 6; 1989, ch. 130, § 3; 2005, ch. 130, § 3.

The 2005 amendment, effective July 1, 2005, provided the method to determine the taxable value of helium and non-hydrocarbon gases.

The 1989 amendment, effective June 16, 1989, inserted "of carbon dioxide, of natural gas from new production natural gas wells and of natural gas severed after June 30, 1990" in the undesignated introductory paragraph.

Transportation adjustment. — Regulation 3.18.6.9 NMAC required all owners of pipelines at the time of the adoption of the regulation to use the owners' predecessors' depreciation schedule to calculate the transportation adjustment for years subsequent to 1991. Kinder Morgan CO2 Co. v. N.M. Taxation & Revenue Dep't, 2009-NMCA-019, 145 N.M. 579, 203 P.3d 110, cert. denied, 2009-NMCERT-001, 145 N.M. 655, 203 P.3d 870.

Where a pipeline was constructed by the first owner prior to 1985 for $7.9 million; the pipeline was purchased by a second owner in 1985 for $45 million; and the pipeline was purchased in 1998 by the taxpayer, 3.18.6.9 NMAC, which was adopted in 1991, required the second owner and the taxpayer to calculate the transportation adjustment for years subsequent to 1991 on the basis of the first owner's depreciation schedule which was based on a $7.9 million cost to construct the pipeline. Kinder Morgan CO2 Co. v. N.M. Taxation & Revenue Dep't, 2009-NMCA-019, 145 N.M. 579, 203 P.3d 110, cert. denied, 2009-NMCERT-001, 145 N.M. 655, 203 P.3d 870.