Yes. The owner of personal property used in a business and subject to federal income tax depreciation is also subject to ad valorem taxes in New Mexico. If your lease agreement passes the property tax along to the lessee, the lessee can report the assets directly. Agreements that require lessees to pay local taxes, where equitable title does not pass from lessor to lessee, are simply agreements between two parties (neither of which is the county assessor) that allow the lessor to pass the property taxes to the lessee. The agreement does not free the owner from his tax obligation to the county. The tax liability statutorily rests on the owner of the personal property. For administrative convenience we suggest that leased personal property be assessed separately from owned personal property; for example, an assessment for a leased Xerox Copying Machine should be:
XXX Corporation, Owner
YYY Store #12, Lessee
C/O YYY, Inc.
One Sureway Plaza
Dallas, Texas 00000-0000
An assessment like this identifies all parties without further investigation. In all cases where the assessment is made against the lessee, keep on file a copy of the lease agreement showing the make, model, serial number and description of each item of leased personal property. Additionally, note the location of the leased equipment.