On April 27, Bernalillo County Assessor Damian Lara filed a 15 page, 5 count civil Complaint for Declaratory Judgment and Injunctive Relief against Bernalillo County Treasurer Tim Eichenberg in State District Court. The civil complaint alleges:
- Eichenberg willfully and knowingly violated his obligations of his office as Treasurer.
- Eichenberg usurped the authority and duties of County Assessor Damian Lara.
- Eichenberg placed his own personal interests for financial gain above his duty to the public.
At the core of the legal battle and the ethics charges is how short-term rental properties should be classified for property tax purposes. The lawsuit alleges Treasurer Eichenberg changed property reclassifications of properties to commercial property made by Assessor Lara back to residential property for tax purposes. The civil complaint seeks to prevent Eichenberg’s unilateral altering of property values and classifications which resulted in lost revenues of nearly $1.8 million in taxpayer dollars.
The lawsuit is asking the District Court to declare that the conduct and actions of Defendant Eichenberg in changing property classifications from commercial to residential were beyond his legal power and authority. The lawsuit seeks a declaratory judgment that Eichenberg has a “conflict of interest” that precludes him from taking any official act for any property represented by a company known as “NM Property Tax” (NMPT) which he or family members have an interest in.
The lawsuit is asking the court to issue a preliminary and then a permanent injunction allowing Plaintiff Lara to restore the nonresidential classifications and values of all properties improperly reclassified and improperly valued by Defendant Eichenberg and enjoining Defendant Eichenberg from making further unauthorized and illegal alterations to the certified tax schedule.
FACTUAL BASIS OF CIVIL COMPLAINT
Following are the factual allegations gleaned from the civil complaint:
In 2025, following a lengthy and systematic review of properties operating as short term rentals within the county, including properties listed on platforms such as Airbnb, County Assessor Lara determined that approximately one thousand forty-seven (1,047) such properties were being used as commercial enterprises rather than as owner-occupied or as long-term residential rental dwellings. Pursuant to the exclusive authority vested in the Assessor under the Property Tax Code, the Bernalillo County Assessor’s Office undertook the annual assessment of property in 2025. As part of the property assessment, Assessor Lara reclassified approximately 1,047 properties from residential to nonresidential classification for tax year 2025 because the primary use of the property was the commercial use as a short-term rental. The change was consistent with the properties’ actual use and applicable classification standards.
Properties classified as nonresidential do not receive the statutory three percent (3%) cap on annual increases in taxable value applicable to certain residential properties under state statute. The Assessor’s nonresidential classifications were lawful, based upon a change in use of the property, and within the Assessor’s exclusive statutory authority. All properties are presumed under state statutes to be nonresidential. It is the burden of the property owner to establish a residential use of their property. The Assessor’s valuation and classification carry a statutory presumption of correctness.
Once the Assessor has completed his duty to classify properties by their use, and establish a valuation of those properties, the process for any owner disagreeing with the classification of their property or the valuation is to either file an appeal to a tax protest board or file a claim for refund with the District Court.
The complaint alleges that following the Assessor’s transmittal of the certified tax schedule to the Treasurer’s office, Eichenberg unilaterally accessed a confidential county database and altered the valuation and classification of the approximately 1,047 properties that Assessor Lara had classified as nonresidential, reverting them to a residential classification and changing their valuation to their 2024 value. Eichenberg’s alteration of the tax schedule had the direct effect of reinstating the affected properties’ assessment at the 2024 taxable value and applying a residential tax rate to those properties. This substantially reduced the assessed values and the property tax obligations of the affected owners, adversely affecting and reducing the Treasurer’s projected tax revenue collections by nearly $1.8 million.
The complaint alleges that Eichenberg’s subversion of the statutory protest process began prior to the dissemination of the 2025 tax bills. The complaint alleges that during the Bernalillo County Protest Board hearings on October 17, 2025, Eichenberg sat outside of the hearing room and distributed a document entitled “Affidavit,” which attested that he had already identified those properties reclassified by the Assessor and “attempted to correct the classification…to residential.” This interference in the protest process had a chilling effect on subsequent protests, whereby property owners withdrew their protests in reliance on the Treasurer’s unlawful assertion that he had the ability and authority to “correct” their tax bills unilaterally.
The complaint alleges that Eichenberg performed his valuation change and reclassification without any administrative proceeding, without authority under any provision of the Property Tax Code and without order of any court or the New Mexico Taxation and Revenue Department (“TRD”). New Mexico statute explicitly enumerates the circumstances in which the County Treasurer may correct the property tax schedule after its delivery to him by the Assessor. Those circumstances are narrowly defined and ministerial in nature.
State law does not grant the Treasurer authority to change values nor reclassify a property’s use category to override the Assessor’s determinations of classification and value. The statute specifically states that, “obvious errors” does not include the method used to determine the valuation for, or a difference of opinion in the value of, the property subject to property taxation. Defendant Eichenberg’s actions therefor exceeded his authority under the law and his changes to value and classification were void by operation of law.
EICHENBERG’S CONFLICT OF INTEREST REPRESENTED BY NMPT PROPERTY TAX APPEALS BUSINESS
The civil complaint alleges that Eichenberg has a financial interest in the firm known as NM Property Tax, Inc. (“NMPT”). The firm is a private for-profit enterprise that represents property owners in appealing their property tax assessments in Bernalillo County and statewide. NMPT’s website at www.nmpropertytax.com identifies Defendant Tim Eichenberg as an owner and lists his credentials, including his time as former Bernalillo County Treasurer and his prior service as New Mexico State Treasurer and Bernalillo County Deputy Assessor.
EDITOR’S NOTE: It has been reported that NM Property Tax, Inc. (“NMPT”) website proclaims:“We can save you money. Odds are you are paying too much in property taxes, and if we don’t save you money, it won’t cost you a dime.” The website was copyrighted in 2026 and states that Carolyn Winter and Tim Eichenberg are the owners of the firm. Documents submitted to the Bernalillo County Valuation Protest Board also identify Eichenberg and Winter’s as owners.
The civil complaint alleges that among the properties whose values and classifications were unilaterally changed by Eichenberg to residential, eight were clients of NMPT who retained NMPT specifically to challenge or reduce their property tax assessments. These eight NMPT clients pursued formal protests of the County Assessor’s commercial classification through the administrative appeals process before the Bernalillo County Assessor’s Protest Board. One of these clients withdrew their protest prior to formal hearing with the Board. The remaining seven of these property protests were adjudicated and the appeals were denied, resulting in final administrative determinations upholding the nonresidential classification and increased valuation to reflect current and correct value pursuant to state statute. Despite those final adverse administrative rulings, Defendant Eichenberg failed to correct the county database he had altered, effectively overruling final administrative decisions without statutory authority or court order.
The civil complaint alleges Eichenberg directly and personally benefited financially from the reduced tax assessments obtained for NMPT’s clients, whether through contingency fees, percentage-of-savings compensation, or other financial benefits derived from those clients’ reduced tax obligations. Such an arrangement caused Defendant Eichenberg to reap financial benefits from securing the lowest possible assessments for NMPT clients, including through the abuse, in this instance, of his official powers as Treasurer.
The complaint alleges that Eichenberg did not recuse himself from taking official action with respect to properties in which he held a financial interest through NMPT client relationships, in violation of his mandatory disqualification obligations under the Governmental Conduct Act and the Bernalillo County Code of Conduct. According to the complaint Eichenberg did not disclose his financial interest in NMPT to the Bernalillo County Assessor’s Protest Board nor to any other governmental authority prior to taking official acts affecting NMPT clients’ properties.
ETHICS COMPLAINT FILED
Separately, Assessor Lara filed a formal complaint with the State Ethics Commission requesting an investigation into suspected violations of the New Mexico Government Conduct Act (GCA) and the Bernalillo County Code of Conduct by Bernalillo County Treasurer Tim Eichenberg. The ethics complaint contains essentially the identical allegations contained in the District Court civil complaint’s allegations of violations of the Governmental Conduct Act and the Bernalillo County Code of Conduct.
Assessor Lara said this about the ethics complaint:
“I believe Treasurer Eichenberg violated his fiduciary duty as a public servant by taking official government action for personal gain. … Part of my responsibility as a steward of taxpayer funds is to report violations of self-dealing and conflicts of interest.”
The letter sent to the ethics board specifically cites Bernalillo County Treasurer Tim Eichenberg’s involvement the business named “NM Property Tax” (NMPT), which property owners hire to help lower their tax bills. NMPT represented at least seven properties that were reclassified before the Bernalillo County Valuation Protest Board.
The Ethics Complaint alleges that Eichenberg personally gained financially from his alteration of the property classification. The Bernalillo County Valuation Protest Board upheld Assessor Lara’s non-residential classification of the properties. Bernalillo County Treasurer Eichenberg ignored the Protest Board’s ruling and order and went into the tax roll and changed the classification back to “residential” for short-term rentals . Assessor Lara said this:
“I believe Tim Eichenberg, in his official capacity as Bernalillo County Treasurer, personally intervened in this matter to his benefit. In doing so, he abandoned his public duty for personal gain in direct violation of the Government Conduct Act.”
EICHENBERG PROCLAIMS “EMBARASSING” MISTAKE
Eichenberg maintains that his name appearing as a principal of “NM Property Tax” is nothing more than an “embarrassing mistake.” Eichenberg has acknowledged that he owned the company for 40 years but that he sold the company right after his election as Treasurer in 2024 to his longtime employee Carolyn Winter. Eichenberger said this:
“I have no interest in NM Property Tax since I was County Treasurer.”
The ethics complaint alleges Eichenber’s wife and daughter are part of “NM Property Tax”. Eichenberg says the company has just fallen behind on taking his name off all the documents. Eichenberg said this:
“I didn’t know, and I will make a call to Carolyn to change the website.”
EVOLUTION OF A CHANGE IN POLICY AND THE FUED BETWEEN OFFICIALS
County Assessor Damian Lara, who is also an attorney, concluded that under state statute property tax law, properties with short-term rentals need to be reclassified from “residential” to “commercial” since the property owners make money off of them as a business. Residential properties are taxed at a lower rate than commercial properties.
The property tax code says a residential property is a dwelling “used primarily for permanent human habitation,” but not “temporary or transient human habitation such as hotels, motels and similar structures.” Short-term rentals are defined by the county as houses, condos or apartments rented out for fewer than 29 consecutive nights. The reclassification of short-term rentals as commercial property is permitted by state statute.
The Bernalillo County assessor is responsible for identifying properties that operate as full-time, income-generating ventures and classifying them as businesses instead of residences. Under New Mexico tax law, businesses pay a slightly higher tax rate than residences. When owners generate income by renting property on a short-term basis, that property becomes nonresidential.
Residential property has a 3% cap on how much their property valuations can increase per year. Commercial properties are subject to higher tax increases than residential properties. Changing a property classification from residential to commercial removes the 3% cap resulting in an increase in property taxes.
Bernalillo County Assessor Damian Lara said that for years the state’s assessors did not reclassify short-term rentals, largely due to a lack of resources to identify them. That started to change 10 years ago, with rental platforms like Airbnb and Vrbo on the rise, as well as improved technology and access to data firms capable of identifying short-term rentals. Counties where tourism is prominent, like Lincoln County, were the first to begin reclassifying short-term rentals.
Others, like Santa Fe County, have since followed suit. According to Lara, it was when he was elected in 2023 that the New Mexico Department of Taxation and Revenue’s Property Tax Division, the quasi-supervisory agency overseeing the state’s county assessors, started probing him on what he was doing to identify short-term rentals and follow state statute.
Lara said he started reaching out to stakeholders in 2024 to get feedback. Lara said the primary response he received from the short-term rental owner community was this:
“You’re going to put us out of business. And I said, ‘Well, that really doesn’t help your case. If you’re telling me you’re running a business, the law says I have to treat you as a business.’”
Assessor Lara has said that fairness matters when it comes to property classifications and property taxes assessed and has said business owners must pay their fair share of the tax burden. When businesses are undervalued or improperly classified, local entities, including the city, county, school districts and hospitals, must raise tax rates to meet their budgets. As a result, residential property owners absorb the shortfall.
Lara has noted and believes that other businesses in our community pay their fair share when they charge for sleeping accommodations. Hotels, for example, pay lodgers’ taxes, gross receipts taxes, property taxes and licensing fees. According to Lara, when short-term rental owners avoid a nonresidential/business classification, they gain an unfair advantage.
Lara said the Assessor’s Office identified approximately 4,000 properties for possible reclassification. After careful analysis, the Assessor’s Office determined that about 3,000 properties should remain classified as residences. Some of those became long-term permanent rentals, like apartments. However, the office reclassified roughly 1,000 properties as nonresidential because their owners use them as full-time, revenue-generating enterprises. Profit is defined as returns, proceeds or revenue generated from properties or investments,
After sending letters and questionnaires to identified short-term rental owners, Bernalillo County Assessor Lara reclassified 1,047 short-term rental properties as commercial last year. Lara’s decision to reclassify the properties drew sharp criticism from the short-term rental community and produced the ongoing feud with County Treasurer Tim Eichenberg.
Assessor Lara said this about Treasurer Tim Eichenberg’s actions:
“After we delivered that tax schedule, the county treasurer changed the valuations, or the classifications, for approximately 1,047 properties that resulted in a loss of tax revenue of almost $2 million. … I have never seen a treasurer after the delivery of the tax schedule has been delivered, go in and change the tax liability for a select group of people.”
“Lowering the tax liability for these businesses means that the average homeowner has to pick up that cost, and that’s unfair to all homeowners who have played by the rules. … The law is clear on this issue: if you operate as a business, you are classified as a business. … Every other county assessor across New Mexico has also implemented this law.”
When Lara became aware of Eichenberg’s actions to change the property classifications and valuations, he locked down their shared computer system and informed both the county manager and the Taxation and Revenue Department that “there was a breach.” According to Eichenberg, he was locked out of the system for 10 days.
SHORT TERM RENTAL’S ECONOMIC IMPACT
According to the New Mexico Short-Term Rental Association 2023 economic impact report, statewide, short-term rentals are generating an economic impact of more than $1 billion per year. While short-term rentals are often associated with tourists, they often cater to people living in the state for work assignments, from tradesmen to traveling nurses and film crews.
Commercial Realtor Todd Clarke said he is conflicted. Clarke serves as a property tax consultant and handled many of the short-term rental tax protest cases the county heard last year, but also specializes in apartment investments. He said he recognizes the city’s need for housing and that using properties as short-term rentals does deprive the market of needed housing units. Clarke also said that reclassifying short-term rentals is “not going to move the needle a lot,” adding that short-term rentals make up less than 5% of the local housing market.
Realtor Carl Vidal, a short-term rental owner and board member of the New Mexico Short-Term Rental Association said for many property owners, these properties are a small business. Vidal said he feels that taxing them like a commercial enterprise is “improper.” Vidal said many short-term renters will be priced out of the market and go out of business if this policy persists.
Links to quoted or relied upon news sources are here:
https://www.krqe.com/news/new-mexico/assessor-lara-files-ethics-complaint-against-treasurer/
COMMENTARY AND ANALYSIS
Bernalillo County Assessor Daman Lara was correct and stood on legal ground to reclassify short-term rental property as commercial property for purposes of taxation. It’s clear the Assessor’s Office did its due diligence and undertook the lengthy and exhaustive annual process of reclassification of properties that was fair and reasonable. It’s difficult to take serious the argument that many short-term renters will be priced out of the market and go out of business if the policy persists. The New Mexico Short-Term Rental Association economic impact report found that statewide, short-term rentals are generating an economic impact of more than $1 billion per year and with short-term rentals making up less than 5% of the local housing market.
Treasurer Tim Eichenberg’s remarks that under state law he is allowed as county treasurer to “correct obvious errors” to the property tax schedule, including errors of property classification, is a very warped interpretation of the law and not based in reality. Eichenberg’s actions, if proven true by the litigation, were a clear attempt to usurp the legal authority of County Assessor Damion Lara and nothing more than political interference with the duties and responsibilities of the County Assessor. County Assessor Damion Lara had no choice but to go to court to prohibit Eichenberg from interfering with Lara’s duties and responsibilities as County Assessor.
What is more troubling than the civil lawsuit filed is the ethics complaint filed by Assessor Lara against Treasurer Eichenberg alleging misuse of his position as Treasurer for his own personal financial gain. Eichenberg proclaiming it was nothing more than an “embarassing” mistake that he was still listed as an owner of NM Property Tax stretches his credibility to the breaking point.
It’s difficult to accept Treasurer Tim Eichenbergs’s explanation that he was not aware that he was still listed as an owner of NM Property Tax with the company paid to be involved with appeals before the Bernalillo County Valuation Protest Board. Over many decades, Eichenberg has been an elected official and a real estate broker and property tax consultant. He has served three terms as Bernalillo County Treasurer, two terms as the New Mexico State Treasurer as well as serving as a New Mexico State Senator. Echenberg knows or should know the ethical rules imposed on elected officials, both state and county, and knows the need to avoid even the appearance of impropriety when it comes to elected officials conduct while in office and conflicts of interest. Eichenberg has also been a realtor and in the property management business for decades and has dealt with over the years in property tax appeals. He knows or should know the ethical rules imposed on realtors.
Both the civil complaint and the ethics complaint need to be fully investigated and litigated as soon as possible so that the Bernalillo County Assessor and Treasurer can resume their duties and responsibilities to the public without going out of their way to destroy each other’s credibility or to destroy each others work.