Concerns surround GRT distributions
Officials of some cities allege they are not receiving their share of gross receipts tax revenue from state
FARMINGTON — Several New Mexico cities are alleging the New Mexico Taxation and Revenue Department is not distributing to them their fair share of gross receipts tax revenue.
"Based on preliminary analysis of publicly available records, it appears that there may very well be improper shorting by the (taxation and revenue department) of gross receipts tax distributions to both municipalities and counties," William Fulginiti of the executive director of New Mexico Municipal League said in an emailed statement.
The New Mexico Municipal League and several cities, including Farmington and Bloomfield, are considering suing the taxation and revenue department in connection with the distribution of gross receipts tax revenue.
Gross receipts taxes are levied on the seller of most goods and services. The taxation and revenue department collects the tax and distributes it to the local governments, minus the state's share.
Following a request by an Albuquerque city councilor, the state auditor is looking into the distribution of GRT revenue. If the audit shows the improper reporting and distribution of GRT revenue, the department will owe local governments money.
The gross receipts tax is not only important for cities. Counties around the state are also watching the audit.
"The county's always been concerned about it," San Juan County Executive Officer Kim Carpenter said.
Benjamin Cloutier, a spokesman for the taxation and revenue department, said in an email that there is a "robust system in place to correct distribution errors, whenever necessary."
He said when errors do occur, the department works closely with the local government to ensure it receives the correct distribution as quickly as possible.
But the New Mexico Municipal League alleges the taxation and revenue department has under reported the amount of revenue it was receiving from gross receipts tax.
The tax is levied on the seller of goods and makes up the majority of the local governments' budgets.
"Municipalities depend on the proper distribution of gross receipts tax revenue in order to provide vital services to their citizens," Fulginiti said. "Improper shorting of distributions of gross receipts tax revenue jeopardizes municipal budgets and undermines the ability of local economies to grow, which also impacts the State’s economy."
Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652.