Section 7-3A-5 - Remitters and pass-through entities liable for amounts deducted and withheld; exceptions.
7-3A-5. Remitters and pass-through entities liable for amounts deducted and withheld; exceptions.
A. Every remitter or pass-through entity is liable for:
(1) amounts required to be deducted and withheld by the Oil and Gas Proceeds and Pass-Through Entity Withholding Tax Act regardless of whether the amounts were in fact deducted and withheld; and
(2) for the amounts that a remittee or an owner has agreed to remit pursuant to Subsection H of Section 7-3A-3 NMSA 1978, once the department has notified the remitter or pass-through entity that the remittee or owner has failed to remit.
B. A remitter or pass-through entity is not liable for amounts required to be deducted and withheld by the Oil and Gas Proceeds and Pass-Through Entity Withholding Tax Act but not deducted or withheld if:
(1) the remitter or pass-through entity fails to deduct and withhold the required amounts and if the tax against which the required amounts would have been credited is paid; or
(2) the remitter's or pass-through entity's failure to deduct and withhold the required amounts is due to reasonable cause.
C. The making of a timely election for federal income tax purposes that changes the net income of a pass-through entity in a prior quarter is a reasonable cause for failure to withhold and deduct the required amounts on the change in net income due to the election.