N.M. Code R. § 3.8.4.10 - TAXABILITY OF DEBT OF DECEASED NONRESIDENT CREDITOR

A. The concept of "business situs" refers to the place where a business is conducted; it is used to localize notes and accounts, debit balances, receivables, and other intangible property for tax purposes, in a place where the decedent was not a resident.

B. A debt may arise from a transaction in New Mexico even if the business situs of the decedent's business was outside New Mexico.

C. The debtor's residence does not determine the taxability of a debt in New Mexico.

D. Example 1: T is a Texas decedent who owned a store in Clovis, New Mexico. The accounts receivable of T's business are all "property located in New Mexico", even if many of T's customers owing the debts live in Texas.

E. Example 2: C is a Colorado decedent who owned a business located in Colorado. C enters New Mexico to sell a widget to D on credit. The sale is made in Farmington. The debt owed by D to C is "property located in New Mexico".

Notes

N.M. Code R. § 3.8.4.10

8/5/74, 9/15/88, 7/15/96; 3.8.4.10 NMAC - Rn, 3 NMAC 8.4.10, 12/14/00