New Mexico cities and counties sue state over tax dispute

More than 40 cities and counties are accusing New Mexico’s state government of misappropriating tax revenue. In an ongoing lawsuit, these communities are asking the court to order the state’s Taxation and Revenue Department to compensate them for what they allege were improper reductions to tax revenue.

The dispute is over revenue generated by gross receipts taxes that are shared by the state and local governments, the Albuquerque Journal reports. Similar to a sales tax, this is usually paid by individuals purchasing goods and services. The complaint alleges the state reduces the amount of revenue it sends to them, often without warning or explanation.

Albuquerque, Santa Fe, Las Cruces, Roswell and Farmington are some of the cities involved in the lawsuit, according to the Associated Press. They argue the state owes them more revenue they used to pay for law enforcement, fire protection and other services.

According to William Fulginiti, the executive director of the New Mexico Municipal League, the state owes New Mexico’s cities and counties approximately 100 million, depending on how many years back they seek restitution, the Journal reports. The Taxation and Revenue depart, however, has denied allegations of wrongdoing.

“The Taxation and Revenue Department is committed to ensuring that cities and counties receive timely and accurate gross receipts tax distributions that they are due under the law,” Charlie Moore, a spokesman for the Taxation and Revenue Department said in a written statement. “We agree with local governments on the importance of determining the accuracy of distributions from past years.”

Moore says his department is committed to making sure communities in the state receive the amount they are due in a timely way. “We agree with local governments on the importance of determining the accuracy of distribution from past years,” he said in a statement.