New Mexico Supreme Court upholds contempt order against state tax agency

SANTA FE – The State Supreme Court today upheld a judge’s ruling in contempt of the State Tax and Revenue Department for failing to comply with a 2015 order regarding a related dispute property tax relating to two high voltage power transmission lines in Harding County.

In a unanimous decision, the court also upheld the district court’s award of $ 38,430 in attorney fees and court costs to the Harding County Council of Commissioners and the Roy and Mosquero public school boards for seeking to enforce the court order in the tax case and as a sanction against the department.

“We cannot say that the award of costs and fees by the district court was unreasonable in law when sufficient evidence was presented to support the award and when the district court specifically found the award to be reasonable,” wrote the Supreme Court in a judge’s opinion. David K. Thomson.

The transmission lines were built by the Tri-State Generation and Transmission Association to provide electricity to factories of oil companies that process carbon dioxide in Harding County. Tri-State, a wholesale electricity supplier owned by the co-operatives and the power district it serves, transferred ownership of the power lines at no cost to the Springer Electric Cooperative, Inc.

In 2015, the county and school district filed a lawsuit asking the First Judicial District Court to order the department to establish the value of power lines for property tax purposes. Without the assessment, Harding County would not be able to assess, impose and collect taxes on the property.

The district court determined that the power lines were taxable and ordered the department to complete the assessment process. The ministry later certified to the court that it had complied with the court’s direction because an administrative hearing officer resolved the tax protests over one of the power lines and determined that it had failed. no fiscal value, having been acquired by the electricity cooperative at no cost. The ministry certified that the other power line also had no tax value.

The county and school districts returned to the district court and argued that the department had failed to comply with the court’s original order. The court agreed and, in 2016, found the department in contempt, awarding the costs and fees to the county and the schools.

The ministry appealed to the Court of Appeal, which upheld the contempt verdict and the award of costs and fees. The appeals court declined to consider the legal merits of the district court’s peremptory mandamus order, which ordered the department to prepare a tax assessment for the power lines because the state agency has exceeded the deadline to appeal this order.

The Supreme Court upheld the Court of Appeal.

“Because the Department admittedly did not act in accordance with the requirements of the law after the District Court ordered the Department to act and after the Department received notice and the opportunity to be heard, we cannot not to say that the district court abused its discretion to hold the Department in contempt, ”the Supreme Court wrote.


To read the decision in County Board of Commissioners, Harding County, c. NM Tax and Revenue Dept., # S-1-SC-37803, please visit the New Mexico Compilation Commission website using the following link:

Information from: Courts Administration Office

Esther L. Steinbach