N.M. Const. art. VIII, § 3
The property of the United States, the state and all counties, towns, cities and school districts and other municipal corporations, public libraries, community ditches and all laterals thereof, all church property not used for commercial purposes, all property used for educational or charitable purposes, all cemeteries not used or held for private or corporate profit and all bonds of the state of New Mexico, and of the counties, municipalities and districts thereof shall be exempt from taxation.
Provided, however, that any property acquired by public libraries, community ditches and all laterals thereof, property acquired by churches, property acquired and used for educational or charitable purposes, and property acquired by cemeteries not used or held for private, or corporate profit, and property acquired by the Indian service and property acquired by the United States government or by the state of New Mexico by outright purchase or trade, where such property was, prior to such transfer, subject to the lien of any tax or assessment for the principal or interest of any bonded indebtedness shall not be exempt from such lien, nor from the payment of such taxes or assessments.
Exemptions of personal property from ad valorem taxation may be provided by law if approved by a three-fourths majority vote of all the members elected to each house of the legislature. (As amended November 3, 1914, November 5, 1946, and November 7, 1972.)
The 1972 amendment, which was proposed by S.J.R. No. 1, § 1 (Laws 1972) and adopted at the general election held on November 7, 1972, with a vote of 141,622 for and 73,386 against, inserted "not used for commercial purposes" following "church property" in the first paragraph and added the last paragraph.
The 1946 amendment, which was proposed by S.J.R. No. 3 (Laws 1945) and adopted at the general election held on November 5, 1946, with a vote of 15,645 for and 6,925 against, added the proviso.
The 1914 amendment, which was proposed by J.R. No. 10 (Laws 1913) and adopted at the general election held on November 3, 1914, with a vote of 18,468 for and 13,593 against, substituted the first paragraph, which was formerly Section 7 of this article, for language which read: "The enumeration of subjects of taxation in section two of this article shall not deprive the legislature of the power to require other subjects to be taxed in such manner as may be consistent with the principles of taxation fixed in this Constitution." See also compiler's note to N.M. Const., art. VIII, § 8.
Compiler's notes. — An amendment to this section proposed by H.J.R. No. 20, § 1 (Laws 1971), was submitted to the people at a special election held November 2, 1971. It was defeated by a vote of 26,059 for and 46,110 against.
An amendment to this section proposed by S.J.R. No. 19 (Laws 1975), which would have allowed the legislature to exempt from property taxation fractional interests in real property that is exempt from taxation under the constitution by reason of ownership if approved by three-fourths of the members of each house of the legislature, was submitted to the people at the general election held on November 2, 1976. It was defeated by a vote of 110,232 for and 155,761 against.
Laws 1983, ch. 110, § 1, which amends Laws 1903, ch. 51, provides that all property of the woman's board of trade and library association of Santa Fe and all other associations or corporations not conducted for financial gain, but rather for the education or social advancement of their members, is exempt from taxation.
Laws 1983, ch. 110, contains no effective date provision, but was enacted at the session which adjourned on March 19, 1983. See N.M. Const., art. IV, § 23.
Cross references. — For exemption from property tax generally, see 7-36-7 NMSA 1978.
Comparable provisions. — Idaho Const., art. VII, § 4.
Montana Const., art. VIII, § 5.
Utah Const., art. XIII, §§ 2, 3.
Wyoming Const., art. XV, § 12.
Appropriate time period to establish exemption status. — The prior calendar year is the appropriate time period upon which to base a property’s exemption status, and January 1 is the appropriate “cutoff date” under Article VIII, Section 3 of the New Mexico Constitution. CAVU Co. v. Martinez, 2014-NMSC-029, aff'g in part, rev'g in part 2013-NMCA-050, 302 P.3d 126.
Appropriate inquiry to determine validity of exempt status. — The appropriate inquiry into the validity of a property’s exemption from taxation under the exemption provision of Article VIII, Section 3 of the New Mexico Constitution is whether use during the tax year furthers exempt purposes. CAVU Co. v. Martinez, 2014-NMSC-029, aff'g in part, rev'g in part 2013-NMCA-050, 302 P.3d 126.
Uses of the property furthered the educational purpose of the property. — Where the taxpayer developed and improved a twenty-six acre tract of land for operation of a school; the property was vacant from June 2008 through January 2010; the assessor denied the taxpayer’s application for an educational use exemption for 2010 because the property was not used for educational purposes on January 1, 2009 and 2010; during 2009, the taxpayer actively sought out and negotiated with potential educational tenants, which resulted in the lease of the property by a private elementary school in 2010 and by an established college preparatory school in 2012; and the taxpayer turned down a proposed commercial lease of the property from a film company, the taxpayer used the property in a direct and immediate effort to further its educational use, embraced the use of the property for systematic educational instruction, and created a substantial public benefit, factors the county valuation protests board must consider in determining whether the taxpayer’s use of the property was in furtherance of its exempt purpose. CAVU Co. v. Martinez, 2014-NMSC-029, aff'g in part, rev'g in part 2013-NMCA-050, 302 P.3d 126.
The determination of the exempt status of property is based on actual use. — The only relevant facts that determine the exempt status of property are facts pertaining to the actual use of the property, not whether the property is built for a certain purpose or the owner’s intent for the property. CAVU Co. v. Martinez, 2013-NMCA-050, 302 P.3d 126, cert. granted, 2013-NMCERT-004.
Where the taxpayer’s property was used as a school until May 2008, the property ceased to be used actively as a school after May, 2008 and was not used actively as a school again until August 2010; the taxpayer sought an educational tenant for the property during the interim; and the property was not in actual use for educational purposes for 2009, the property did not qualify for an educational use exemption in 2010. CAVU Co. v. Martinez, 2013-NMCA-050, 302 P.3d 126, cert. granted, 2013-NMCERT-004.
Purpose of tax exemption is to encourage religious, charitable, scientific, literary and educational associations not operating for the profit of any private shareholder or individual. NRA Special Contribution Fund v. Board of Cnty. Comm'rs, 1978-NMCA-096, 92 N.M. 541, 591 P.2d 672, cert. quashed, 92 N.M. 464, 589 P.2d 1055 (1979).
Purposes served by exempt institution. — For most types of exemptions from taxation an exempt institution must serve some worthy purpose, religious, charitable, educational or governmental or must further the public welfare in some special way. NRA Special Contribution Fund v. Board of Cnty. Comm'rs, 1978-NMCA-096, 92 N.M. 541, 591 P.2d 672, cert. quashed, 92 N.M. 464, 589 P.2d 1055 (1979).
Purpose of charitable exemption is to encourage charitable activities by providing them with tax relief, and to thereby promote the general welfare of society. The countervailing consideration is to limit the exemption within reasonable bounds so as to minimize the shift of the tax burden to nonexempt property owners. Another consideration in limiting exemptions is to avoid inequitable competition in the name of charity with nonexempt entities. Sisters of Charity v. County of Bernalillo, 1979-NMSC-044, 93 N.M. 42, 596 P.2d 255.
Case-by-case determination of exemptions. — The constitution has provided a charitable exemption for which our cases recognize the propriety of a case-by-case analysis, and the statutory scheme provided by the legislature permits an orderly, expert, and consistent resolution of requests for an exemption on a case-by-case basis. Grand Lodge of Ancient & Accepted Masons v. Taxation & Revenue Dep't, 1987-NMCA-081, 106 N.M. 179, 740 P.2d 1163, cert. denied, 106 N.M. 174, 740 P.2d 1158.
Classification of property. — The constitution, in effect, classes tangible property into that exempt from taxation, that which may be exempted and that which must be taxed. State ex rel. Attorney Gen. v. State Tax Comm'n, 1936-NMSC-029, 40 N.M. 299, 58 P.2d 1204. See also N.M. Const., art. VIII, §§ 1, 5, and notes thereto.
Theory of exemptions. — The exemption granted to church property, public libraries, educational and charitable institutions and cemeteries not used or held for private or corporate profit proceeds upon the theory of the public good accomplished by them, and of the peculiar benefits derived by the public in general from their conduct. The exemption granted to property of the United States is perhaps compulsory; that to the state, all counties, towns, cities and school districts arises from public policy, which repudiates, as being utterly futile, the theory of the state taxing its own property in order to produce funds with which to operate its own affairs. State v. Locke, 1923-NMSC-084, 29 N.M. 148, 219 P. 790, 30 A.L.R. 407.
A. IN GENERAL.
Authority of legislature. — The legislature is authorized to exempt certain property from taxation and none other. Dillard v. New Mexico State Tax Comm'n, 1948-NMSC-069, 53 N.M. 12, 201 P.2d 345.
Length thereof. — Tax exemption on property continues as long as the use is for the exempted purpose. Berger v. University of N.M., 1923-NMSC-049, 28 N.M. 666, 217 P. 245.
Use of property determinative of right to exemption. — Use, rather than ownership, is determinative as criteria for exemption from tax liability. If the use is for charitable purposes, then the exemption from tax liability attaches. Mountain View Homes, Inc. v. State Tax Comm'n, 1967-NMSC-092, 77 N.M. 649, 427 P.2d 13.
It is the use of property, not the declared objects and purposes of its owner, which determines the right to exemption under this section. United Veterans Org. v. New Mexico Prop. Appraisal Dep't, 1972-NMCA-086, 84 N.M. 114, 500 P.2d 199.
Pro rata taxing according to separate uses. — Where one substantial part of a building that is owned by a charitable institution is directly and actually occupied and used for charitable purposes, and another substantial portion is primarily used for commercial leasing, such building is pro rata taxable according to its separate uses. Sisters of Charity v. County of Bernalillo, 1979-NMSC-044, 93 N.M. 42, 596 P.2d 255.
Denial of exemption to leased property. — Foremost among the reasons why exemption from taxation is denied to property leased out by an otherwise tax-exempt body is that the property is put to a profitmaking or revenue-producing use by some private nonexempt person or organization. Sisters of Charity v. County of Bernalillo, 1979-NMSC-044, 93 N.M. 42, 596 P.2d 255.
On case by case basis. — Except to the extent that the facts as to use are so nearly alike as to logically compel like results, no case can be said to constitute a controlling precedent for another case in this area. BPOE, Lodge 461 v. New Mexico Property Appraisal Dep't, 1972-NMSC-006, 83 N.M. 445, 493 P.2d 411, aff'g 1971-NMCA-124, 83 N.M. 505, 454 P.2d 167.
Burden to establish right to exemption. — It is the burden of the organization seeking an exemption to establish its right to that exemption. United Veterans Org. v. New Mexico Prop. Appraisal Dep't, 1972-NMCA-086, 84 N.M. 114, 500 P.2d 199.
Rule of strict construction of tax exemption provisions held not controlling in determining whether masonic lodge property is used for educational or charitable purposes. Temple Lodge No. 6, A.F. & A.M. v. Tierney, 1933-NMSC-013, 37 N.M. 178, 20 P.2d 280.
Rule of construction in New Mexico is that of reasonable construction, without favor or prejudice to either the taxpayer or the state, to the end that the probable intent of the provision is effectuated and the public interests to be subserved thereby are furthered. BPOE, Lodge 461 v. New Mexico Prop. Appraisal Dep't, 1972-NMSC-006, 83 N.M. 445, 493 P.2d 411; Sisters of Charity v. County of Bernalillo, 1979-NMSC-044, 93 N.M. 42, 596 P.2d 255.
Use must be both substantial and primary. — To qualify for an exemption under this section, the educational or charitable use of property must be both substantial and primary. United Veterans Org. v. New Mexico Prop. Appraisal Dep't, 1972-NMCA-086, 84 N.M. 114, 500 P.2d 199.
Although this section does not require property to be used exclusively for charitable purposes in order to come within the exemption, the uses for these purposes must be substantial and must be the primary uses made of the property. Retirement Ranch, Inc. v. Curry Cnty. Valuation Protest Bd., 1976-NMCA-010, 89 N.M. 42, 546 P.2d 1199, cert. denied, 89 N.M. 206, 549 P.2d 284; BPOE, Lodge 461 v. New Mexico Prop. Appraisal Dep't, 1972-NMSC-006, 83 N.M. 445, 493 P.2d 411, aff'g 1971-NMCA-124, 83 N.M. 505, 454 P.2d 167.
Where the primary use of the property was for the social and fraternal activities of the members and their families and guests of the members of the lodge and to be entitled to the exemption, the use of the property for charitable purposes has to be "substantial and primary," denial of the exemption by the property tax appeal board was proper. BPOE, Lodge No. 461 v. New Mexico Prop. Appraisal Dep't, 1971-NMCA-124, 83 N.M. 505, 494 P.2d 167, aff'd, 1972-NMSC-006, 83 N.M. 445, 493 P.2d 411.
Exemption provided by section does not extend to special assessments for improvements, and the Drainage Law of 1912, ch. 84, § 39 (73-7-1 NMSA 1978), authorizing such assessments, is not void. Lake Arthur Drainage Dist. v. Board of Comm'rs, 1924-NMSC-002, 29 N.M. 219, 222 P. 389.
Improvement assessments not deemed "tax". — A specific assessment of property for improvement, the cost of which is assessed against the property, is not a tax within the constitutional sense; but a drainage improvement on lands granted by the Enabling Act could not be paid from the income fund, for the state had no authority to improve such lands. Lake Arthur Drainage Dist. v. Field, 1921-NMSC-043, 27 N.M. 183, 199 P. 112.
Specific assessments on property for improvements, based on benefits, the cost of which is assessed against the property, is not a tax within the inhibition of this section, and Laws 1923, ch. 140, § 402 (repealed), regarding appraisal of benefits to property of public corporations, did not violate this section. In re Proposed Middle Rio Grande Conservancy Dist., 1925-NMSC-058, 31 N.M. 188, 242 P. 683.
Res judicata and collateral estoppel in quiet title suits. — District court decree holding that certain property was exempt from taxation was res judicata as to a claim of exemption from taxes in a quiet title suit involving the realty. McDonald v. Padilla, 1948-NMSC-066, 53 N.M. 116, 202 P.2d 970, superseded by statute, Webb v. Arizona Pub. Serv. Co., 1981-NMCA-007, 95 N.M. 603, 624 P.2d 545.
In quiet title action in which question of exemption from taxes for 1936 and 1939 was involved, doctrine of collateral estoppel by judgment applied in view of 1920 decree which restrained assessor from assessing certain real estate on ground it was exempt from taxation. McDonald v. Padilla, 1948-NMSC-066, 53 N.M. 116, 202 P.2d 970, superseded by statute, Webb v. Arizona Pub. Serv. Co., 1981-NMCA-007, 95 N.M. 603, 624 P.2d 545.
Property which is constitutionally exempt from taxation is not required to be reported under 7-36-7B(1) NMSA 1978 and the assessor has no authority to value the property. Lovelace Ctr. for Health Sciences v. Beach, 1980-NMCA-004, 93 N.M. 793, 606 P.2d 203.
Remedy for claims of tax exemption for property owned by masonic lodges. — The legislature, in enacting a comprehensive scheme for administrative and judicial review, has provided the exclusive remedy for claims presented to the district court that property owned by all masonic lodges is exempt from taxation under this section and the administrative remedies provided by the legislature must be exhausted before a declaratory judgment action will lie. Grand Lodge of Ancient & Accepted Masons v. Taxation & Revenue Dep't, 1987-NMCA-081, 106 N.M. 179, 740 P.2d 1163, cert. denied, 106 N.M. 174, 740 P.2d 1158.
B. GOVERNMENT PROPERTY.
Liability of federal contractor not taxation of government. — Where general contractor was required by contracts with federal government to furnish materials to be used on federal reservation in New Mexico, the contractor purchased the materials, became the owner thereof and was liable for the use or compensating tax under former statutory provisions (72-17-1, 1953 Comp.); and this was not taxation of government land or other government property. Robert E. McKee, Gen. Contractor v. Bureau of Revenue, 1957-NMSC-082, 63 N.M. 185, 315 P.2d 832.
Mutual domestic water consumers associations are municipal corporations and are therefore exempt from property taxes. — Article VIII, § 3 of the New Mexico Constitution exempts from property taxes the property of municipal corporations, and under current law mutual domestic water consumers associations (MDWCA), organized pursuant to the Sanitary Projects Act, NMSA 1978, §§ 3-29-1 to 3-29-21, are municipal corporations, as they are local political entities created pursuant to statute and authorized to manage community water systems, and therefore the property of MDWCAs is constitutionally exempt from property taxation. 2024 Op. Att'y Gen. No. 24-06.
Real property owned by the New Mexico hospital equipment loan council is not constitutionally exempt from taxation. — The New Mexico legislature may not grant tax exemptions from real property beyond those authorized by the New Mexico constitution, and therefore the New Mexico hospital equipment loan council, which is not a governmental entity listed in N.M. Const., Art. VIII, § 3, is not constitutionally exempt from taxation based on ownership of real property. 2025 Op. Att'y Gen. No. 25-13.
Irrigation districts are not "municipal corporations". Davy v. McNeill, 1925-NMSC-040, 31 N.M. 7, 240 P. 482.
Town of Tome. — The organized town of Tome is not included in the term "other municipal corporations". Board of Trustees v. Sedillo, 1922-NMSC-027, 28 N.M. 53, 210 P. 102.
All irrigation works exempt. — While community ditches and their laterals are exempt from taxation, other irrigation works are not. State ex rel. State Tax Comm'n v. San Luis Power & Water Co., 1947-NMSC-042, 51 N.M. 294, 183 P.2d 605.
Relief when single irrigation work taxed. — In case a single irrigation works is singled out for taxation while other similar works go untaxed, the district court may grant such relief as may be proper. State ex rel. State Tax Comm'n v. San Luis Power & Water Co., 1947-NMSC-042, 51 N.M. 294, 183 P.2d 605.
Taint of educational purposes. — If plaintiff engages casually in promotion, propaganda and lobbying activities, then its other activities are tainted with uneducational purposes, and if any evidence is presented of such activities, plaintiff loses its standing as an educational organization whose property is "used for educational purposes". NRA Special Contribution Fund v. Board of Cnty. Comm'rs, 1978-NMCA-096, 92 N.M. 541, 591 P.2d 672, cert. quashed, 92 N.M. 464, 589 P.2d 1055 (1979).
Where the state retains title to state lands, the state property appraisal department is without authority to assess taxes against the land after the cancellation of a contract of sale. Any tax deed held by the department is void; therefore, any deed issuing from a foreclosure sale conveys nothing. Romero v. State, 1982-NMSC-028, 97 N.M. 569, 642 P.2d 172.
Bonds of state or political subdivisions. — Nothing in the language of this section of the constitution requires an interpretation that only such bonds as evidence a debt of the state or its political subdivisions are exempt from taxation. State ex rel. State Park & Recreation Comm'n v. New Mexico State Auth., 1966-NMSC-033, 76 N.M. 1, 411 P.2d 984.
Municipal industrial development revenue bonds. — Statute authorizing issuance of revenue bonds by municipality for industrial development and providing that bonds so authorized, the income therefrom, shall be exempt from all taxation by state on any subdivision, was not violation of constitutional provision requiring that taxes be equal and uniform, insofar as the exemption was confined to municipal property. Village of Deming v. Hosdreg Co., 1956-NMSC-111, 62 N.M. 18, 303 P.2d 920.
Property of Las Vegas land grant is not exempt from taxation under this section, since it is not a town, city or other municipal corporation. State v. Board of Trustees, 1922-NMSC-029, 28 N.M. 237, 210 P. 101.
Where the Las Vegas grant previously had been held for tax purposes not to be a town, city or other municipal corporation within the contemplation of this section, such holding was equally applicable within the contemplation of the provisions of the N.M. Const., art. IV, § 24. Board of Trustees v. Montano, 1971-NMSC-025, 82 N.M. 340, 481 P.2d 702.
Common lands of town of Atrisco in Atrisco land grant do not come within either Section 3 or Section 5 of this article and are, therefore, subject to taxation. Town of Atrisco v. Monohan, 1952-NMSC-011, 56 N.M. 70, 240 P.2d 216.
Lands of community grant of town of Tome, incorporated under Laws 1891, ch. 86 (repealed), and §§ 2148-2184, 1897 C.L., held not exempt from taxation. Board of Trustees v. Sedillo, 1922-NMSC-027, 28 N.M. 53, 210 P. 102.
One having lease to construct military housing on federal land. — Congress having explicitly removed the bar of sovereign immunity as it applied to property belonging to the United States, the immunity granted the federal government by this section and N.M. Const., art. XXI, § 2, clearly was not available to one who had a lease to construct military housing on federal land. It was his interest that was subject to taxation. Kirtland Heights, Inc. v. Board of Cnty. Comm'rs, 1958-NMSC-066, 64 N.M. 179, 326 P.2d 672.
Dam impounding water for irrigation system, though owned by a nonprofit corporation distributing water to its shareholders, is not exempt from taxation. Storrie Project Water Users Ass'n v. Gonzales, 1949-NMSC-052, 53 N.M. 421, 209 P.2d 530.
C. CHURCH PROPERTY.
Church property to have active use for tax-exempt status. — The constitutional language "all church property not used for commercial purposes" contemplates a concurrent affirmative, active, nontaxable use to qualify church-owned property for tax-exempt status. Grace, Inc. v. Board of Cnty. Comm'rs, 1981-NMCA-136, 97 N.M. 260, 639 P.2d 69, cert. denied, 98 N.M. 50, 644 P.2d 1039.
Houses and lots not deemed "church property". — A dwelling house and lot owned by a church, the rent for which is collected by the church and used for religious or charitable purposes, is not "church property". Church of Holy Faith, Inc. v. State Tax Comm'n, 1935-NMSC-060, 39 N.M. 403, 48 P.2d 777.
A house and lot owned by a church and rented was not exempt from taxation as "church property", although church had acquired the property for the purpose of establishing a girls' school, but was not yet in financial condition to do so. Trustees of Prop. of Protestant Episcopal Church v. State Tax Comm'n, 1935-NMSC-061, 39 N.M. 419, 48 P.2d 786.
Vacant lot which a church corporation had acquired for the purpose of building a church thereon sometime in the future is not church property pursuant to this provision. Grace, Inc. v. Board of Cnty. Comm'rs, 1981-NMCA-136, 97 N.M. 260, 639 P.2d 69, cert. denied, 98 N.M. 50, 644 P.2d 1039.
Where church establishes nonprofit corporation to run nursing home facility, the facility is church-affiliated but is not "church property" for purposes of a tax exemption; however, where the substantial and primary use of such a facility is for charitable purposes, it is tax exempt. Retirement Ranch, Inc. v. Curry Cnty. Valuation Protest Bd., 1976-NMCA-010, 89 N.M. 42, 546 P.2d 1199, cert. denied, 89 N.M. 206, 549 P.2d 284.
D. EDUCATIONAL PURPOSES.
Phrase "used for educational purposes" means the direct, immediate, primary and substantial use of property that embraces systematic instruction in any and all branches of learning from which a substantial public benefit is derived. NRA Special Contribution Fund v. Board of Cnty. Comm'rs, 1978-NMCA-096, 92 N.M. 541, 591 P.2d 672, cert. quashed, 92 N.M. 464, 589 P.2d 1055 (1979).
Courts establish tax exempt standards for "used for educational purposes". — The legislature has seen fit to allow the courts to establish the standards under which property may be determined to be tax exempt when "used for educational purposes". NRA Special Contribution Fund v. Board of Cnty. Comm'rs, 1978-NMCA-096, 92 N.M. 541, 591 P.2d 672, cert. quashed, 92 N.M. 464, 589 P.2d 1055 (1979).
In determining reasonable construction of phrase "used for educational purposes," the direct and immediate use of the property must govern the decision, and not the remote and consequential benefit derived from its use. NRA Special Contribution Fund v. Board of Cnty. Comm'rs, 1978-NMCA-096, 92 N.M. 541, 591 P.2d 672, cert. quashed, 92 N.M. 464, 589 P.2d 1055 (1979).
Term "educational" is comprehensive, embracing mental, moral and physical education. NRA Special Contribution Fund v. Board of Cnty. Comm'rs, 1978-NMCA-096, 92 N.M. 541, 591 P.2d 672, cert. quashed, 92 N.M. 464, 589 P.2d 1055 (1979).
Educational institution seeking tax exemption need not prove it is supplying an educational benefit which the state would normally provide its citizens. NRA Special Contribution Fund v. Board of Cnty. Comm'rs, 1978-NMCA-096, 92 N.M. 541, 591 P.2d 672, cert. quashed, 92 N.M. 464, 589 P.2d 1055 (1979).
Scope of educational use. — Plaintiff private museum's use of its property to raise funds for operations and related programs and activities in schools or off-site did not detract from an educational use and purpose. Georgia O'Keeffe Museum v. County of Santa Fe, 2003-NMCA-003, 133 N.M. 297, 62 P.3d 754.
Portion of land for educational purposes exempted. — Where a portion of a plaintiff's land is primarily and substantially devoted to educational purposes, notwithstanding that the period of its instruction is very short, the subjects taught are confined to a narrow field and its purpose is utilitarian to the last degree, it is educational within the scope of that term as employed in the constitutional provision under consideration. NRA Special Contribution Fund v. Board of Cnty. Comm'rs, 1978-NMCA-096, 92 N.M. 541, 591 P.2d 672, cert. quashed, 92 N.M. 464, 589 P.2d 1055 (1979).
Educational function incidental to institution's activities. — When the facts of a case show that the educational function of an institution is merely incidental to its activities in pursuance of educational purposes, exemption from taxation may be denied. NRA Special Contribution Fund v. Board of Cnty. Comm'rs, 1978-NMCA-096, 92 N.M. 541, 591 P.2d 672, cert. quashed, 92 N.M. 464, 589 P.2d 1055 (1979).
Culture afforded by college sorority life is not "educational" within meaning of this section, exempting from taxation property used for educational purposes. Albuquerque Alumnae Ass'n of Kappa Kappa Gamma Fraternity v. Tierney, 1933-NMSC-011, 37 N.M. 156, 20 P.2d 267.
University's privately-run student housing was not tax exempt where primary use was residential and not educational. — Where petitioners protested the assessment of property tax by the Bernalillo county assessor, claiming an educational exemption for certain shared properties under Article VIII, Section 3 of the New Mexico constitution, and where the county valuation protests board denied the protests and upheld the assessment on the grounds that there was never an application for the tax exemption and the properties were not eligible for the exemption because the primary use of the properties was residential and not educational, the district court did not err in affirming the decision of the board, because although the properties conferred a substantial public benefit, a review of the record demonstrated that the direct, immediate, primary, and substantial use of the properties was residential, and the properties did not further an educational purpose. Am. Campus Cmtys., Inc. v. Regents of Univ. of N.M., 2026-NMCA-031, cert. granted.
Alumni association of university fraternity not exempt from taxation. NRA Special Contribution Fund v. Board of Cnty. Comm'rs, 1978-NMCA-096, 92 N.M. 541, 591 P.2d 672, cert. quashed, 92 N.M. 464, 589 P.2d 1055 (1979).
E. CHARITABLE PURPOSES.
Broad expression "used for educational or charitable purposes" necessarily imposes upon the courts a severe task of interpretation. Charity may "cover a multitude of sins". The line of demarcation cannot be projected. It can take shape only by the gradual process of adjudicating this or that purpose or use on the one side of it or on the other, or by change in the constitutional criteria. Mountain View Homes, Inc. v. State Tax Comm'n, 1967-NMSC-092, 77 N.M. 649, 427 P.2d 13; NRA Special Contribution Fund v. Board of Cnty. Comm'rs, 1978-NMCA-096, 92 N.M. 541, 591 P.2d 672, cert. quashed, 92 N.M. 464, 589 P.2d 1055 (1979).
What is charity, and what is a charitable use, as these terms were understood by the membership of the constitutional convention, and by the ordinary voter who participated in adoption of the constitution containing this language, is the test to be applied. Mountain View Homes, Inc. v. State Tax Comm'n, 1967-NMSC-092, 77 N.M. 649, 427 P.2d 13.
No all-embracing application of the term charity was contemplated by the drafters of the constitution. Mountain View Homes, Inc. v. State Tax Comm'n, 1967-NMSC-092, 77 N.M. 649, 427 P.2d 13.
Property used in operation of a quasi-public low-rent housing project would not have been considered charitable when the constitution was adopted. Mountain View Homes, Inc. v. State Tax Comm'n, 1967-NMSC-092, 77 N.M. 649, 427 P.2d 13.
Constitutional limitation on the legislature’s power. — This section is self-executing and it operates as a limit on the legislature’s power to redefine categories of property which will be exempt from taxation. El Castillo Ret. Residences v. Martinez, 2017-NMSC-026, aff’g 2015-NMCA-041, and overruling La Vida Llena v. Montoya, 2013-NMCA-048, 299 P.3d 456.
Where the Santa Fe county assessor appealed the district court’s decision that petitioner, a retirement and continuing care community, was improperly denied a charitable property tax exemption, the New Mexico supreme court held that the district court erred in concluding that petitioner fulfilled the charitable use requirements for tax exemption under art. VIII, § 3 of the New Mexico constitution, because petitioner, a self-sustaining community that accepts and benefits only financially and medically screened residents based on requirements calculated in the interests of financial security for itself, did not create any substantial public benefit and therefore cannot be entitled to exemption from taxation under 7-36-7(B)(1)(d) NMSA 1978 or N.M. Const., art. VIII, § 3. El Castillo Ret. Residences v. Martinez, 2017-NMSC-026, aff’g 2015-NMCA-041, and overruling La Vida Llena v. Montoya, 2013-NMCA-048, 299 P.3d 456.
Test for charitable property tax exemption. — To qualify for the charitable property tax exemption, the property must be used primarily and substantially for charitable purposes in a manner that benefits the public. El Castillo Retirement Residences v. Martinez, 2015-NMCA-041, overruling In re Miller, 1975-NMCA-116, 88 N.M. 492, 542 P.2d 1182, rev’d on other grounds by 1976-NMSC-039, 89 N.M. 547, 555 P.2d 142, and cert. granted, 2015-NMCERT-004.
Where retirement community claimed a charitable property tax exemption under this section, the evidence that retirement community was structured to be a self-sustaining retirement community, funded entirely by admission and monthly fees, served predominantly wealthy individuals who met certain physical, mental, and financial requirements, and did not accept Medicare or Medicaid recipients demonstrated that retirement community did not directly and immediately use its property primarily and substantially for a charitable purpose recognized under this section. El Castillo Retirement Residences v. Martinez, 2015-NMCA-041, overruling In re Miller, 1975-NMCA-116, 88 N.M. 492, 542 P.2d 1182, rev’d on other grounds by 1976-NMSC-039, 89 N.M. 547, 555 P.2d 142, and cert. granted, 2015-NMCERT-004.
English statute of charitable uses is in force in this state. Mountain View Homes, Inc. v. State Tax Comm'n, 1967-NMSC-092, 77 N.M. 649, 427 P.2d 13.
Use by owner, not tenant. — The charitable use specified in this section should be construed to mean use by the owner of the property rather than the use to which the property is put by the tenant. Rutherford v. County Assessor, 1976-NMCA-053, 89 N.M. 348, 552 P.2d 479, cert. denied, 90 N.M. 8, 558 P.2d 620; Chapman's, Inc. v. Huffman, 1975-NMSC-062, 90 N.M. 21, 559 P.2d 398; Sisters of Charity v. County of Bernalillo, 1979-NMSC-044, 93 N.M. 42, 596 P.2d 255.
Setting aside portion for charitable use not "substantial". — Where whole office building was organized for economic and not charitable use, setting aside 30% for hospital purposes is not substantial enough to make the hospital portion exempt from taxation under this section. Rutherford v. County Assessor, 1976-NMCA-053, 89 N.M. 348, 552 P.2d 479, cert. denied, 90 N.M. 8, 558 P.2d 620.
Rental of rooms no effect on tax-exempt status. — Where a lodge owns a building used for lodge work and recreation and is engaged in philanthropical work, the fact that it rents rooms to some of its members, and a very few to prospective members, does not affect its tax-exempt status. Albuquerque Lodge, No. 461, B.P.O.E. v. Tierney, 1935-NMSC-022, 39 N.M. 135, 42 P.2d 206.
Conservation of land is a charitable use if conservation of the land provides a substantial benefit to the public and if the property is used directly, immediately, primarily, and substantially for conservation and the use of the property promotes the object or purpose of conservation. Pecos River Open Spaces, Inc. v. County of San Miguel, 2013-NMCA-029.
Conservation of land in its natural and undeveloped state generally benefits the public in the context of environmental preservation and beautification of the State of New Mexico. Pecos River Open Spaces, Inc. v. County of San Miguel, 2013-NMCA-029.
Conservation of land in its natural and undeveloped state is a charitable use. — Where plaintiff, pursuant to its corporate purpose to acquire vacant, undeveloped, and unimproved land in the vicinity of the Pecos River, to preserve the land it its natural state, and thereby to contribute to the preservation of the environment and the ecology of the Pecos River for the benefit of New Mexico and its citizens, acquired a tract of vacant, undisturbed land located near the Pecos River; the land contained significant natural, open space, and historic resources; plaintiff granted a strict conservation easement on the property to another corporation which prevented, in perpetuity, the development of the land; defendant had a policy of conservation of the Pecos River; and the conservation of the land conferred a benefit on the public, the conservation of the land conferred a substantial public benefit and constituted a charitable purpose that qualified the land for tax exemption under Article VIII, Section 3 of the New Mexico Constitution. Pecos River Open Spaces, Inc. v. County of San Miguel, 2013-NMCA-029.
Facility used for caring for aged sick and infirm deemed "charitable". — Where the recipients of a nonprofit corporation's efforts are indeed sick and largely indigent, the facility used for the purpose of caring for the aged sick and infirm falls within the category of "charitable purpose". Retirement Ranch, Inc. v. Curry Cnty. Valuation Protest Bd., 1976-NMCA-010, 89 N.M. 42, 546 P.2d 1199, cert. denied, 89 N.M. 206, 549 P.2d 284.
Use of property by masonic lodge held "charitable" within meaning of this section. Temple Lodge No. 6, A.F. & A.M. v. Tierney, 1933-NMSC-013, 37 N.M. 178, 20 P.2d 280.
United veterans organization not exempt from property taxes. NRA Special Contribution Fund v. Board of Cnty. Comm'rs, 1978-NMCA-096, 92 N.M. 541, 591 P.2d 672, cert. quashed, 92 N.M. 464, 589 P.2d 1055 (1979).
Self-supporting low-cost housing. — Where there is an enterprise to furnish low-cost housing to a certain segment of the population that is intended to be self-supporting, without any thought that gifts or charity be involved, in that the tenants are required to pay for the premises occupied by them with the rentals being fixed so as to return the amount estimated as being necessary to pay out the project, the use is not charitable so as to exempt the property from taxes under this section. Mountain View Homes, Inc. v. State Tax Comm'n, 1967-NMSC-092, 77 N.M. 649, 427 P.2d 13.
Generally. — When property is acquired by the state in its sovereign capacity, it thereupon becomes absolved, freed and relieved from any further liability for taxes previously assessed against it, and which are unpaid at the time it becomes so acquired; and from the moment of its acquisition, the power to enforce a lien is arrested or abated. State v. Locke, 1923-NMSC-084, 29 N.M. 148, 219 P. 790, 30 A.L.R. 407 (decided prior to 1946 amendment).
Escheat property freed from liability for former taxes. — Land which is acquired by state through escheat is forthwith freed from any further liability for taxes previously levied, and there is no longer any power to collect or enforce the tax. Schmitz v. New Mexico State Tax Comm'n, 1951-NMSC-048, 55 N.M. 320, 232 P.2d 986.
All tangible property subject to tax unless specifically exempt. — All tangible property in New Mexico is subject to taxation in proportion to value, and should be taxed, unless specifically exempted by the constitution or by its authority. Sims v. Vosburg, 1939-NMSC-026, 43 N.M. 255, 91 P.2d 434.
It is the policy of this state that tangible property must be taxed unless specifically exempted by the constitution, or by legislative act authorized by the constitution. Town of Atrisco v. Monohan, 1952-NMSC-011, 56 N.M. 70, 240 P.2d 216.
Constitution sets forth only areas of allowable ad valorem tax exemption. 1969 Op. Att'y Gen. No. 69-137.
Veterans exemption laws do not exempt veteran from payment of ad valorem taxes for the taxable year during which property was purchased by the veteran from a nonveteran owning the property on January 1 of such year. 1959 Op. Att'y Gen. No. 59-133.
Section determinative of exempt status. — No matter how praiseworthy the purposes of a nonprofit organization may be and no matter the quantity of public benefit derived, this section of the constitution, in establishing its standard for tax exempt status, is determinative. 1958 Op. Att'y Gen. No. 58-02.
Section applicable only to property, not excise, taxes. — There is a difference between a property tax and an excise or privilege tax. The constitutional exemption does not extend to more than that to which it plainly refers - property and property taxes. It falls short of creating an exemption from the imposition of an excise tax such as the sales tax. 1955 Op. Att'y Gen. No. 55-6148.
Municipalities may legally assess and collect one cent gasoline tax from penitentiary, although it is a state agency, for it is an excise tax, where laws make no provision for exemption of state-owned vehicles, and by implication state consented to such tax. 1933 Op. Att'y Gen. No. 33-686.
State may neither enlarge nor diminish exemptions granted in and by this section. 1955 Op. Att'y Gen. No. 55-6267.
The enumeration of certain exemptions in this section precludes other statutory exemptions. 1918 Op. Att'y Gen. No. 18-2077.
Nonprofit water corporation. — A nonprofit corporation organized to provide a community water system pursuant to 3-29-1 NMSA 1978 is not "another municipal corporation," and is subject to ad valorem taxation. 1968 Op. Att'y Gen. No. 68-38.
Use of church property for religious or charitable purposes is necessary before the property is exempt. 1955 Op. Att'y Gen. No. 55-6088.
Fact that organization is nonprofit is not sufficient to bring it under the exemption of this section. No matter how praiseworthy the purposes of the organization are, it is still subject to taxation if the standards laid down are not met. 1960 Op. Att'y Gen. No. 60-63.
Unless used for educational, religious or charitable purposes. — The nonprofit character of the owner of property does not permit the granting of an exemption from ad valorem taxes unless the property is used for educational, religious or charitable purposes. 1969 Op. Att'y Gen. No. 69-137.
Nonprofit organizations have to pay an ad valorem tax on their property; for example, on union halls and lodge buildings, unless such property is used primarily for educational or charitable purposes. 1962 Op. Att'y Gen. No. 62-36.
Fact that club is nonprofit organization and at times may operate at financial loss is not sufficient to bring it within the terms of a constitutional exemption. Where it is apparent that it is used for social and recreational purposes to enhance the mutual happiness and enjoyment of its members and guests, property is not exempt from taxation and should be placed upon the tax rolls the same as any other taxable property. 1953 Op. Att'y Gen. No. 53-5740.
Use of property determines right to exemption. — The supreme court has stated that it is not what the purpose of an organization is, it is the use made of the property which is controlling in determining whether or not the exemption from taxation will apply. 1955 Op. Att'y Gen. No. 55-6171.
Use to be primary and dominant. — It is not the purpose for which an association is organized, but the use made of the property which is controlling. Further, the use on which the decision rests must be the primary and dominant use and not merely an incidental and sporadic use. 1960 Op. Att'y Gen. No. 60-63.
County club. — A country club which is primarily used for social and recreational purposes to enhance the mutual happiness and enjoyment of its members and guests is not exempt from taxation and should be placed on the tax rolls. 1953 Op. Att'y Gen. No. 53-5740.
Property need not be used solely for educational or charitable purposes. — All property used for educational or charitable purposes is exempt from taxation, and there is no limitation that it must be used solely for that purpose. 1914 Op. Att'y Gen. No. 14-1365.
Sheriff's posse not primarily "educational or charitable". — Under this section, the Dona Ana county sheriff's posse, or any other sheriff's posse, is not a primarily educational or charitable enterprise. Hence, a tax-exempt status may not be claimed. 1958 Op. Att'y Gen. No. 58-02.
Chambers of commerce. — This section enumerates exemptions to taxes. Chambers of commerce are not included therein by name - the only enumeration under which chambers of commerce might be counted would be "all property used for educational or charitable purposes". A chamber of commerce purpose is neither educational nor charitable in the sense dealt with in this section. 1957 Op. Att'y Gen. No. 57-10.
Commercial television primarily entertainment, not educational. — The customary television programs of a commercial television station, whether broadcast or rebroadcast, are primarily for entertainment, and only primarily educational procedures are intended in this section, insofar as it pertains to the nonprofit class of tax exemptions. 1957 Op. Att'y Gen. No. 57-325.
Lessee of university-owned land is not liable for ad valorem taxes based on the assessed value of the land itself, as distinct from the value of the improvements erected upon the land. 1970 Op. Att'y Gen. No. 70-24.
Improvement assessments. — Assessment for local sewer improvement is not a tax from which state property is exempt, unless lands were granted to state by Enabling Act. 1931 Op. Att'y Gen. No. 31-49.
Real property owned by the state armory board held not subject to a paving assessment by a municipality for a street paving project adjoining such property. 1959 Op. Att'y Gen. No. 59-161. See also notes to N.M. Const., art. VIII, § 1.
Improvements made on federal or state land which immediately vest in federal or state governments are not taxable, but if they do not vest in such governments until the expiration or lapse of the lease, they are taxable. 1937 Op. Att'y Gen. No. 37-1589.
Taxation of oil and gas leases. — Oil and gas leases on state and government property cannot be assessed and taxed as such, but such leases on privately owned fee lands can be taxed, and production taxes are in lieu of other taxes. 1932 Op. Att'y Gen. No. 32-378.
Former exemption of newly constructed railroads. — Constitutional provisions cited in declaring that the constitutional amendment of 1914, omitting Section 8 of this article of prior constitution, which omitted section permitting legislature to exempt newly constructed railroads from taxation, gave rise to doubt as to whether prior statute, §§ 1761 and 3881, 1897 C.L., so exempting such railroads, remained effective. 1915 Op. Att'y Gen. No. 15-1416.
Listing of exempt property on tax roll. — Exempt property should be properly described on the tax roll and should be valued at its proper value and listed as exempt. Payment made in lieu of taxes has no bearing upon the valuation and should not be considered by the assessor. 1955 Op. Att'y Gen. No. 55-6233.
Property of federal government and its agencies is exempt from property taxation in New Mexico. 1962 Op. Att'y Gen. No. 62-53.
Property owned by town or school district is exempt from the taxes imposed on the severance and sale of hydrocarbons. 1961 Op. Att'y Gen. No. 61-64.
Since the supreme court has stated directly that ownership of the property is the test in determining whether or not the exemption applies to property held by the state or school district, it goes without saying that property owned by a school district is exempt from taxation if the land is presently being used for school purposes. 1955 Op. Att'y Gen. No. 55-6183.
Property owned by town is exempt from real and personal property taxation. 1963 Op. Att'y Gen. No. 63-147.
Property of state university. — Under this section, it is apparent that property of a state university is not taxable. A property tax cannot be levied against that property. 1955 Op. Att'y Gen. No. 55-6146.
Municipal bonds. — Under this section, all bonds of municipalities are exempt from taxation. 1964 Op. Att'y Gen. No. 64-17.
Bonds of joint inter-community nonprofit corporation. — This section would be applicable to the bonds issued by a joint inter-community nonprofit water or natural gas corporation formed under the provisions of Laws 1955, ch. 18 (repealed), and under the Joint Powers Agreements Act. 1964 Op. Att'y Gen. No. 64-17.
Hospital used for charitable purposes. — The exemption from taxation extends to any hospital used for charitable purposes, even though service is given to some patients who pay for it. 1912 Op. Att'y Gen. No. 12-894.
Parsonages located on church property for the purpose of providing a place of residence for the parson, reverend, priest or other church officials are exempt from taxation. 1955 Op. Att'y Gen. No. 55-6124.
Property owned by fraternal order is exempt except such part as is rented for profit. 1926 Op. Att'y Gen. No. 26-3893.
The property of the Independent Order of Odd Fellows is exempt. 1914 Op. Att'y Gen. No. 14-1365.
Property of B.P.O. Elks held exempt from taxation if it came within the provisions of Laws 1903, ch. 51, § 3 (special act). 1913 Op. Att'y Gen. No. 13-1061.
Bi-state railroad. — The Cumbres and Toltec Railroad, a bi-state agency of New Mexico and Colorado, is immune from property taxes in the two states. 1990 Op. Att'y Gen. No. 90-18.
Effect of proviso in this section is to maintain the lien on property acquired by "outright purchase or trade" if the tax or other assessment secures a bonded indebtedness; no other tax lien survives when property is acquired by the state. Further, unless the property is acquired in the manner specified in the proviso, liens for taxes and assessments for bonded indebtedness would also be extinguished. 1978 Op. Att'y Gen. No. 78-08.
Property owned by property control division. — The property control division of the general services department is required to pay levies assessed by the middle Rio Grande conservancy district on real property owned by the property control division within the conservancy district. 1987 Op. Att'y Gen. No. 87-07.
Income-producing property of church is not exempt, although the proceeds therefrom are used for religious purposes. 1953 Op. Att'y Gen. No. 53-5740.
Property owned by high official of religious order is not exempt. 1926 Op. Att'y Gen. No. 26-3893.
Railroad hospital used and supported by employees is not exempt. 1926 Op. Att'y Gen. No. 26-3893.
Property owned by labor unions not used solely for an exempt purpose enumerated in the constitution is not exempt from property taxes. 1959 Op. Att'y Gen. No. 59-07.
Legacies to charitable or educational institutions. — This constitutional exemption does not apply to legacies to charitable or educational institutions which are subject to the inheritance tax. 1937 Op. Att'y Gen. No. 37-1618.
Tax liability where real property acquired by municipality. — The real property of any municipality within the state is exempt from taxation under the express provisions of this section, and a county assessor may not subject such real property, the title to which has passed to a municipality, with further liability for the payment of taxes. Although the tax lien upon such property is unenforceable against the real property so acquired by a municipality, the former owner in whose name the property was assessed on January 1 of such year remains personally responsible for the taxes upon the property for the remainder of the year. 1961 Op. Att'y Gen. No. 61-103.
Law reviews. — For article, "Ad Valorem Tax Status of a Private Lessee's Interest in Publicly Owned Property: Taxability of Possessory Interests in Industrial Projects under the New Mexico Industrial Revenue Bond Act," see 3 N.M. L. Rev. 136 (1973).
Am. Jur. 2d, A.L.R. and C.J.S. references. — 71 Am. Jur. 2d State and Local Taxation §§ 307 to 318, 332 to 349, 362 to 391.
Construction and application of statutory and constitutional provisions exempting property of persons in military service, or formerly in such service, from taxation, 149 A.L.R. 1485.
Scope and application of exemption of cemeteries from taxation, 168 A.L.R. 283.
Construction of exemption of religious body or society from taxation or special assessment, 168 A.L.R. 1222.
Conditions: constitutional exemption from taxation as subject to legislative regulation respecting conditions of its assertion, 4 A.L.R.2d 744.
Property used by personnel as living quarters or for recreation purposes as within contemplation of tax exemptions extended to property of religious, educational, charitable, or hospital organizations, 15 A.L.R.2d 1064, 55 A.L.R.3d 356, 55 A.L.R.3d 485, 61 A.L.R.4th 1105.
Stadium: exemption from taxation of municipally owned or operated stadium, auditorium and similar property, 16 A.L.R.2d 1376.
"Scientific institution" within property tax exemption provisions, 34 A.L.R.2d 1221.
Validity, construction, and effect of statutes providing for urban redevelopment by private enterprise, 44 A.L.R.2d 1414.
Time: tax exemption of real property as affected by time of acquisition of title by private owner entitled to exemption, 54 A.L.R.2d 996.
Additional property, etc.: legislative power to exempt from taxation property, purposes or uses additional to those specified in constitution, 61 A.L.R.2d 1031.
College fraternity or sorority house, 66 A.L.R.2d 904.
Dining rooms or restaurants as within tax exemptions extended to property of religious, educational, charitable or hospital organizations, 72 A.L.R.2d 521.
Church parking lots as entitled to tax exemptions, 75 A.L.R.2d 1106.
Blue Cross, Blue Shield, or other hospital or medical service corporation, 88 A.L.R.2d 1414.
Agricultural fair society or association engaged in education activities, property of, 89 A.L.R.2d 1104.
Charitable, educational or religious tax exemption of property held in trust for tax-exempt organization, 94 A.L.R.2d 626.
Schools: exemption of public school property from assessments for local improvements, 15 A.L.R.3d 847.
Receipt of pay from beneficiaries as affecting tax exemption of charitable institutions, 37 A.L.R.3d 1191.
Clubhouse: tax exemption of property used by fraternal or benevolent association for clubhouse or similar purposes, 39 A.L.R.3d 640.
What constitutes church, religious society or institution exempt from property tax under state constitutional or statutory provisions, 28 A.L.R.4th 344.
Exemption of nonprofit theater or concert hall from local property taxation, 42 A.L.R.4th 614.
Exemption from real-property taxation of residential facilities maintained by hospital for patients, staff, or others, 61 A.L.R.4th 1105.
Nursing homes as exempt from property taxation, 34 A.L.R.5th 529.
84 C.J.S. Taxation §§ 215 to 226, 251 to 254, 281 to 303.