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GROSS RECEIPTS and COMPENSATING TAX ACT REGULATIONS SECTIONS 7-9-1 to 7-9-116 NMSA 1978

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GROSS RECEIPTS and COMPENSATING TAX ACT REGULATIONS SECTIONS 7-9-1 to 7-9-116 NMSA 1978 TAXATION AND REVENUE DEPARTMENT P.O. Box 630 Santa Fe, New Mexico 87504-0630 3.2 NMAC GROSS RECEIPTS AND COMPENSATING TAX ACT REGULATIONS SECTIONS 7-9-1 to 7-9-116 NMSA 1978 Revised December 2018 This page intentionally blank. 3.2 NMAC TABLE OF CONTENTS 7-9-1. SHORT TITLE 3.2.1.7 – Definitions 3.2.1.8 – Citation of regulations 7-9-2. PURPOSE 7-9-3. DEFINITIONS 7-9-3(A). “buying” or “selling” 3.2.1.7 – Definitions A. Benefit B. Consideration C. Detriment F. Computer-related terms G. Practitioner of the healing arts 7-9-3(B). “department” 7-9-3(C). “financial corporation” 3.2.1.7 – Definitions D. Financial corporation 7-9-3(D). "initial use" or "initially used" 7-9-3(E). "leasing" 3.2.1.17 – Gross receipts – leasing H. Leasing computers 3.2.1.22 – Leasing C. Security agreement distinguished from a lease - tax consequences 7-9-3(F). "local option gross receipts tax" 7-9-3(G). "manufactured home" 7-9-3(H). "manufacturing" 3.2.1.25 - Manufacturing - general examples 7-9-3(I). "person" 7-9-3(J). "property" 3.2.1.7 – Definitions Page i E. Franchise 3.2.1.27 – Property A. Bills, notes, etc. B. Sale of license to use software is sale of property C. Granting the right to hunt is the sale of a license to use 7-9-3(K). "research and development services" 7-9-3(L). "secretary" 7-9-3(M). "service" 3.2.1.18 – Gross receipts - services CC. Receipts from telephone or telegraph services EE. Custom software 3.2.1.29 – Services D. When a transaction is predominantly a service E. Transactions in which neither the performance of a service or the sale of tangible personal property predominates 7-9-3(N). "use" or "using" 3.2.1.30 – Use and using A. Use B. Storage 7-9-3.2. ADDITIONAL DEFINITION 3.2.20.7 – Definitions A. Admission B. Agency, institution or instrumentality C. Entertainment, athletic or recreational services or events D. State of New Mexico and any agency, institution, instrumentality or political subdivision thereof 3.2.20.9 - “Receipts” and “taxable activity” defined 3.2.20.10 - “Facility open to the general public” defined 3.2.20.11 - Intangibles - indebtedness 3.2.20.12 - Intangibles - receipts from sale of licenses or permits 3.2.20.13 - Reporting, filing or registration fees 3.2.20.14 - Receipts from granting licenses to use real property 3.2.20.15 - Receipts from granting licenses to use information or personal property 3.2.20.16 - Receipts from leasing 3.2.20.17 - Receipts from services - general 3.2.20.18 - Receipts from services - refuse collection, refuse disposal and sewage 3.2.20.19 - Receipts from services - recreational, entertainment and athletic services 3.2.20.20 - Receipts from transactions which are predominantly the sale of tangible personal property Page ii 3.2.20.21 - Receipts from sales of tangibles - facilities not open to the general public 3.2.20.22 - Taxes 3.2.20.23 - Grants - donations 3.2.20.24 - Agency 3.2.20.25 - Implementation of governmental gross receipts tax for cash basis taxpayers and accrual basis taxpayers 3.2.20.26 - Registration and filing 3.2.20.27 - Governmentally-owned water utilities - installation and stand-by charges - minimum charges 3.2.20.28 - Time-price differentials - income from investments 3.2.20.30 - Receipts from sale of real estate 3.2.20.31 – Receipts from recreational, athletic and entertainment services 3.2.20.32 - Fines 7-9-3.3. DEFINITIONS -- ENGAGING IN BUSINESS 3.2.1.12 – Engaging in business A. Affiliated corporations B. Corporation not for profit C. Leasing property D. Hotels and motels providing interstate telecommunications service to guests E. Persons not engaging in business – foster parents F. Persons not engaging in business – certain caretakers G. Persons not engaging in business – home care for developmentally disabled family members H. Owner engages in business when selling to owned entity II. Persons not engaging in business - sale or exchange of renewable-fueled electricity generated from a system installed in a personal residence 7-9-3.4. DEFINITIONS -- CONSTRUCTION AND CONSTRUCTION MATERIALS 3.2.1.11 – Construction A. Construction service as distinguished from other services B. Construction includes C. Construction does not include D. Oil and gas industry construction E. Construction includes prefabricated buildings; prefabricated versus modular buildings F. Construction materials and services; landscaping G. Nontaxable transaction certificates H. Fixtures I. Construction materials; general J. Meaning of “building” 7-9-3.5. DEFINITION -- GROSS RECEIPTS 3.2.1.14 - Gross receipts – general Page iii A. Gross receipts B. Credit card sales C. Consideration other than money D. Consideration less than fair market value E. Sale of commercial paper F. Interdepartmental transfers G. Service charges computed on balances H. Corporations and organizations not organized for profit – fund raising activities I. Discount coupons J. Gross receipts embezzled K. Vending machines L. “Gross receipts” excludes leased vehicle surcharge M. Receipts from furnishing parts or labor under automotive service contract N. Receipts from deductibles/co-payments under automotive service contracts O. Receipts of dealer from own reserve P. Water conservation fee Q. Sales of items subject to the federal manufacturer's excise tax R. Transactions among related persons are gross receipts S. Owner’s receipts from transactions with owned entity are gross receipts 3.2.1.15 – Gross receipts – tangible personal property A. Lease purchase agreement as a sale B. Consignment sales C. Delivery expenses D. Freight charges E. Refundable deposits F. Buyer’s financing costs G. Sale of items subject to the state cigarette tax act H. Florist receipts I. Sale of food and beverage at horse racetracks J. Packaged software K. Sale of postage stamps L. Refined metals 3.2.1.16 – Gross receipts – real estate and intangible property A. Insurance proceeds B. Receipts from sale of automotive service contracts C. Receipts from insurance company under an automotive service contract program D. Gift certificates E. Merchant discount and interchange rate fee receipts F. Prepaid telephone cards - “calling cards” 3.2.1.17 – Gross receipts – leasing A. Leasing of property employed in New Mexico Page iv B. Additional charges C. Lease of license - franchise agreement D. Multistate use of leased equipment E. Leasing of property employed outside New Mexico F. Use of vehicles in New Mexico G. Safe harbor lease--purchaser/lessor 3.2.1.18 – Gross receipts - services A. Receipts from performing a service in New Mexico B. Services performed both within and without New Mexico C. Allocating receipts from selling services performed within and without New Mexico D. Expenses incurred outside New Mexico and allocated to operations in New Mexico E. Receipts from performing services outside New Mexico F. Sales of state licenses by nongovernmental entities G. Stockbrokers' commissions H. Attorneys' fees I. Directors' or trustees’ fees J. Anesthetists' fees K. Athletic officials L. Racing receipts M. Advertising receipts of a newspaper or broadcaster N. Advertising space in pamphlets O. Billboard advertising P. Day care centers Q. Child care R. Service charges; tips S. Real estate brokers T. Entertainers U. Managers or agents of entertainers V. Water utilities - installation of water taps and pipes W. Utilities - installation charges X. Construction on Indian reservations or pueblos Y. Star route contractors Z. Racetrack operators AA. Data access charges BB. Specialty software package [Repealed] DD. Allied company underwriting automotive service contracts FF. Check cashing is a service GG. Receipts of collection agencies HH. Commission of independent contractors when another pays gross receipts tax on the receipts from the underlying transaction II. Receipts from winning contest. Page v 3.2.1.19 – Gross receipts – receipts of agents A. Nonemployee agents B. Receipts of condominium and other real property owners associations C. Reimbursed expenditures D. Reimbursement of expenditures made to volunteers 7-9-4. IMPOSITION AND RATE OF TAX -- DENOMINATION AS "GROSS RECEIPTS TAX" 3.2.4.7 - Definitions 3.2.4.8 - Who is the taxpayer 3.2.4.9 – Federal preemption – transactions with Indian tribes A. Imposition barred by federal law - sale in Indian country of tangible personal property to a tribe or tribal member – general B. Imposition barred by federal law - sale in Indian country of tangible personal property to a tribe or tribal member - electricity, natural gas or water sold by public utility C. Imposition barred by federal law - leasing in Indian country to tribe or tribal members D. Imposition barred by federal law - services in Indian country for tribe or tribal members – general E. Imposition barred by federal law - services in Indian country for tribe or tribal members - construction services F. Imposition barred by federal law - services in Indian country for tribe or tribal members - telecommunications services G. Imposition barred by federal law - receipts of federally licensed Indian traders H. Imposition barred by federal law - Indian business within tribe's territory 3.2.4.10 - Federal preemption and state exemption - credit unions 3.2.4.11 - Federal preemption - job corps contractors 3.2.200.8 - Federal preemption of local taxes 7-9-4.3. IMPOSITION AND RATE OF TAX -- DENOMINATION AS "GOVERNMENTAL GROSS RECEIPTS TAX" 3.2.21.8 - Application of governmental gross receipts tax 3.2.21.9 - Licensed entities providing health care services 7-9-5. PRESUMPTION OF TAXABILITY 3.2.5.8 - Persons not required to register with the department 7-9-6.
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