N.M. Stat. Ann. § 7-1-63
C. A successor may discharge an assessment made pursuant to this section by paying to the department the full value of the transferred tangible and intangible property. The successor shall remain liable for the amount assessed, however, until the amount is paid if:
History: 1953 Comp., § 72-13-76, enacted by Laws 1965, ch. 248, § 64; 1979, ch. 144, § 57; 1997, ch. 67, § 7.
The 1997 amendment, effective July 1, 1997, substituted "assessment of tax due" for "demand for payment" in the section heading; rewrote Subsection A; substituted "due from the amount placed in a trust account" for "required to be withheld" and made a stylistic change in Subsection B; and added Subsection C.
"Successor" defined. — A successor means any transferee of a business or property of a business, except to the extent it would be materially inconsistent with the rights of secured creditors that have perfected security interests or other perfected liens on the business or property of the business. Implicit in the taxation and revenue department’s definition of "successor" is the notion that the future intent of a transferee of a business, once it has received the business, is an important aspect of determining whether it is a "successor". A successor may include a business that is acquired and run for an indefinite period by a creditor of the predecessor, but does not include one who acquires and operates a business for a limited period of time in order to protect its collateral. The distinguishing feature is whether the entity acquiring the business intends to retain and operate the business. Hi-Country Buick GMC v. N.M. Taxation and Revenue Dep’t., 2016-NMCA-027, cert. denied.
Where the taxation and revenue department imposed a tax assessment on appellant, as a successor in business to a car dealership, including penalties and interest, after appellant acquired the car dealership from the prior owners who defaulted on a promissory note, and where appellant acquired inventory from the prior dealership, entered into a management agreement for the continued operation of the car dealership, and where certain liabilities of the prior dealership were paid, there was a presumption that appellant was a successor in business and appellant failed to rebut this presumption. Hi-Country Buick GMC v. N.M. Taxation and Revenue Dep’t., 2016-NMCA-027, cert. denied.
Successor in business and mere continuation of business. — Where the New Mexico taxation and revenue department assessed appellant, an automobile repossession business, as a successor in business to, and a mere continuation of, a defunct corporation that was also in the business of automobile repossessions, for unpaid gross receipts taxes, and where appellant protested the assessment, claiming that it was not a successor in business to the defunct corporation, the administrative hearing officer did not err in its decision and order determining appellant to be a successor in business, as well as a mere continuation, of the defunct corporation, based on the evidence that appellant took the defunct corporation's office equipment, liability insurance policy and tow truck to provide the same services using the same equipment with the same employees to the same customers and at the same business location. High Desert Recovery v. N.M. Tax'n & Revenue Dep't, 2022-NMCA-048, cert. denied.