Section 7. Definitions

For the purposes of 3.3.5 NMAC: A. “gross amount” includes amounts deducted by the remitter for expenses and severance taxes, but does not include amounts deducted for expenses or taxes prior to receipt by the remitter. If a taxpayer receives a Form 1099-MISC for its oil and gas proceeds, the gross amount is the amount reported on federal Form 1099-MISC in box 2, royalties, and in box 7, nonemployee compensation; and B. “resident of New Mexico” means (1) an individual domiciled in this state during all of the taxable year, or (2) an individual other than an individual described in Subsection D of 3.3.1.9 NMAC who is physically present in this state for a total of one hundred eighty-five (185) days or more in the aggregate during the taxable year, regardless of domicile or (3) an individual who moves into this state with the intent to make New Mexico his permanent domicile. [3.3.5.7 NMAC - N, 10/15/03; A, 12/15/10; A, 6/28/13] 3.3.5.8 EFFECTIVE DATE OF OIL AND GAS PROCEEDS WITHHOLDING REQUIREMENTS: The withholding requirements imposed by Section 7-3A-3 NMSA 1978 apply to payments made on or after October 1, 2003, regardless of production date. [3.3.5.8 NMAC - N, 10/15/03] 3.3.5.9 OIL AND GAS PROCEEDS A. The following are not oil and gas proceeds for the purposes of the Oil and Gas Proceeds Withholding Tax Act and are not subject to the withholding tax imposed by that act, when payment is not offset against a share of future production: advance royalty payments, bonus payments, minimum royalty payments, shut- in payments and rental payments. B. If the production is from a well subject to a unit or communitization agreement whose area crosses state boundaries, the amount attributable to “oil and gas production from any well located in New Mexico” may be derived through the allocation methodology set out in the agreement. C uction: advance royalty payments, bonus payments, minimum royalty payments, shut- in payments and rental payments. B. If the production is from a well subject to a unit or communitization agreement whose area crosses state boundaries, the amount attributable to “oil and gas production from any well located in New Mexico” may be derived through the allocation methodology set out in the agreement. C. If the amount received by the remitter has had severance taxes or other expenses deducted prior to the time the remitter receives it, then the remitter shall be required to withhold only from the amount it received.