Published: 12:57 pm, Tue. Feb. 27th, 2018Updated: 12:56 pm
Five New Mexico municipalities are taking the state Taxation and Revenue Department to court for what they believe could be millions of dollars in withheld gross receipts funds. And according to the Artesia City Council, the number of parties involved in that lawsuit could soon grow.
Mayor Phillip Burch and city clerk Aubrey Hobson updated the council Tuesday on the progress of the suit, which currently includes Artesia, Jal, Moriarty, Bloomfield and Farmington as plaintiffs.
At issue is the communities’ monthly gross receipts tax payments, which Burch says have been “extremely erratic” over the past three years.
“We received one check where we expected about $1.5 million and got half a million with no warning, no notice, just ‘Oh, by the way, your check is half a million dollars,’” Burch said. “I met with the secretary of Tax and Rev and explained to him that the impact that it has on a small community – that is your livelihood, is that gross receipts check each month, and to get one expecting a million that’s half a million… if this council hadn’t been extremely conservative and built a general fund base, we couldn’t have made the payroll a couple of times in the last three years.”
Hobson says more than $6 million in estimated funds the city was anticipating that were instead clawed back by the state have been identified to this point. Burch said Farmington has also taken particularly large hits to its expected GRT payments, but the numbers seen in smaller communities pale in comparison to the multi-million-dollar sums in places like Albuquerque.
“If we had everybody involved, it would be a large, large amount you just can’t scoff at,” Hobson said.
As such, the suit will be opened up to additional municipalities and counties – with the New Mexico Municipal League and New Mexico Association of Counties also indicating their involvement – with an emphasis on encouraging the state’s largest governments to join.
“It’s going to grow bigger, a suit will be filed shortly, and we’ll let the judge figure it out,” Burch said. “We feel confident that we have been wronged. We would hope to get some of that back, but the real hope is just to get them to abide by the laws when they collect our taxes for us and send it to us – that’s all we want: what we’re rightfully entitled to by law.”