Chapter 6, Section D:|
Motor Vehicle Excise Tax - Basics
Here are the basics:
When is the Motor Vehicle Excise Tax imposed and paid?
(Sec. 7-14-3) The Motor Vehicle Excise Tax (MVET) is imposed, with specific exceptions, "upon the sale in this state of every vehicle ... required under the Motor Vehicle Code ... to be registered in this state."
Note: Because all-terrain vehicles (ATVs) are subject to the registration and titling provisions of the Motor Vehicle Code, the MVET is imposed on the sale of ATVs (184.108.40.206 NMAC). Boats, because they are not vehicles, are not subject to the MVET, but are subject to a separate 5% boat excise tax (Sec. 66-12-6.1).
(Sec. 7-14-5) The tax is paid at the
time of application for a certificate of title.
Amount of tax based on price paid
(Sec. 7-14-4) The MVET rate three percent (3%) and is applied to the price paid for the vehicle. The value of any vehicle traded in on the purchase of another vehicle may be deducted (220.127.116.11 NMAC).
Effective February 13, 2009, and as described in PQU#86, the "price paid" for a vehicle for the purpose of calculating the MVET is now defined in rule (18.104.22.168D NMAC) as below:
(Sec. 7-14-7) If a vehicle is acquired
out-of-state, and another state's gross receipts, sales, compensating or
similar tax was paid, the amount of the tax paid may be credited against
the MVET due on the same vehicle.
Rebates, discounts and dealer prep fees
It has been MVD practice for some years that rebates are not considered a reduction in price, and that dealer transportation and preparation fees are not considered an increase in price paid, for the purpose of calculating the MVET. Some informally published MVET calculation guidelines have been less than clear as to how dealer discounts should be treated.
The new rule defining "price paid" now
makes it clear that the price to which the MVET tax is applied is the "net
purchase price paid by the buyer for the vehicle itself" and that
the price paid does include any dealer prep and transportation fees and
is reduced by dealer discounts and by any manufacturer's rebate that is
paid or contractually guaranteed at the time of sale.
Value exception to price paid as basis for MVET
By rule (22.214.171.124 NMAC), the price paid for a used vehicle cannot be relied upon to indicate the reasonable value of the vehicle. Instead, the rule provides for a presumption that the value of the vehicle transferred is no less than the average trade-in (wholesale) value for the make, model and year of the vehicle as reported by the National Automobile Dealers Association (N.A.D.A.).
Accordingly, As described in PQU#81rev2, effective January 1, 2009, the value used to calculate the Motor Vehicle Excise Tax on the sale of a used motor vehicle shall be the higher of the declared purchase price or 80% of the N.A.D.A. average trade-in or wholesale value of the vehicle, with four limited exceptions:
Note: It is not up to field office
personnel to determine or negotiate the actual value of a vehicle. The
customer may rebut the presumption by presenting evidence sufficient to
establish a lower value. But merely confirming the price paid is not
evidence of reasonable value. If the customer wishes to prove that the
actual value of the vehicle is lower than the N.A.D.A. value applied, he
may do so by submitting a Request for Refund (MVD-10208), together with
sufficient documentation (typically in the form of an auto body shop
estimate of repairs needed or a formal statement of value from a
licensed dealer or other professional appraiser).
Tax penalty for late titling
(Sec. 7-14-8) A penalty of 50% of the MVET is imposed on any person who lives in New Mexico and either a) accepts transfer of a vehicle in New Mexico but fails to apply for a certificate of title within 90 days; or b) accepts transfer outside the state and fails to apply for a certificate of title within 90 days of bringing the vehicle into New Mexico.
The 50% add-on penalty has the effect
of increasing the tax rate to 4.5% (3% x 1.5 = 4.5%).
Statutory exemptions from the MVET
(Sec. 7-14-6) The following are exempt from payment of the Motor Vehicle Excise Tax:
Note: Exemptions D and E, above,
reflect a change in statute, effective July 1, 2007. A vehicle that
qualifies for a handicap (HP) plate no longer automatically qualifies
for the exemption. However, the automatic exemption for vehicles owned
by veteran amputees is retained.
Exemptions by Rule - U.S. and NATO