New Mexico Administrative Code

Taxation and Revenue Department, Joseph M. Montoya Building, 1100 South St. Francis Drive, P.O. Box 630, Santa Fe NM 87504-0630.

A. Construction service as distinguished from other services. (1) The term "construction" is limited to the activities, or management of the activities, which are listed in Section 7-9-3.4 NMSA 1978 and which physically change the land or physically create, change or demolish a b…

A. Engaging in business :(1) Generally: For periods beginning July 1, 2020, "engaging in business" conforms to the constitutional requirement for substantial nexus under South Dakota v. Wayfair, 585 U.S. ___(2018). A person that has physical presence in the state and is also cond…

A. Credit card sales: Gross receipts of the seller of property or services or the lessor of property include the full sale or lease contract amount of any property or service sold or of any property leased when payment is made through the use of a credit card which has been issue…

A. Lease purchase agreement as a sale: The receipts from a two party "lease-purchase" or "paid-out lease" agreement for tangible personal property will be treated as receipts from the sale of tangible personal property under the Gross Receipts and Compensating Tax Act if the less…

A. Insurance proceeds: (1) Receipts of an insured derived from payments made by an insurer pursuant to an insurance policy are not subject to the gross receipts tax. Such receipts are not receipts derived from the sale of property in New Mexico, the leasing of property employed i…

A. Leasing of property employed in New Mexico:(1) Receipts derived from the rental or leasing of property employed in New Mexico are subject to the gross receipts tax. (2) Example 1: A is in the business of leasing heavy equipment used in construction projects. The receipts from …

A. Receipts from performing a service in New Mexico or performing a service outside New Mexico the product of which is initially used in New Mexico. Receipts derived from performing a service in New Mexico or performing a service outside New Mexico the product of which is initial…

A. Nonemployee agents: (1) The receipts of nonemployee agents are subject to the gross receipts tax to the extent the education provided by Section 7-9-66 NMSA 1978 is not applicable. The indicia outlined in 3.2.105.7 NMAC will be considered in determining whether a person is an …

This part applies to all persons engaging in business in New Mexico.

A. Gross Receipts of Marketplace Providers: Under Section 7-9-3.5 NMSA 1978, the receipts of marketplace providers are defined to include receipts collected by a marketplace provider engaging in business in the state from sales, leases and licenses of tangible personal property, …

A. Beginning July 1, 2021 most services performed outside New Mexico the product of which is initially used in New Mexico are not exempt under Section 7-9-13.1 NMSA 1978. B. The term "initial use" is used here as defined in Section 7-9-3 NMSA 1978 and in other regulations under t…

Security agreement distinguished from a lease - tax consequences: A. The gross receipts from leasing equipment to a lessee for the lessee's own use and not for subsequent leasing are subject to the gross receipts tax unless the presence of all or a majority of the following or si…

A. Relationship between certain terms and consistency in use of those terms. The terms "sale of a service performed," "performance of a service," "product of the service," "initial use" and "delivery" are defined or used in the Gross Receipts and Compensating Tax Act and regulati…

A. For purposes of Subsection H of Section 7-9-3 NMSA 1978, combining means assembling two or more pieces of tangible personal property to create another piece of personal property. Processing means to convert tangible personal property into a marketable form. A person is engaged…

A. Bills, notes, etc.: Tangible personal property does not include bills, notes, checks, drafts, bills of exchange, certificates of deposit, letters of credit, or any negotiable instrument. Coins, stamps, and documents which have a historic value or market value in excess of thei…

A. When a transaction is predominantly a service: (1) A transaction involving both the transfer of tangible personal property to the buyer and the performance of a service other than a construction or research and development service is predominantly a service when:(a) the seller…

Section 9-11-6.2 NMSA 1978.

The definition of "use" and "using" pursuant to Subsection N of Section 7-9-3 NMSA 1978 includes three components: use, consumption and storage. A. Use: The first component, "use", means to employ or utilize property or a service for a particular purpose. Use does not include mer…

Permanent.

October 13, 2021, unless a later date is cited at the end of a section, in which case the later date is the effective date.

The objective of this part is to interpret, exemplify, implement and enforce the provisions of the Gross Receipts and Compensating Tax Act.

The terms defined in 3.2.1.7 NMAC apply throughout 3.2 NMAC. A. Benefit: A "benefit" is any consideration to either party. "Benefit" is not limited to profits, pecuniary gains, or any particular kind of advantage. B. Consideration: "consideration" is any benefit, interest, gain o…

Unless otherwise stated, all citations of statutes in Chapter 3.2 NMAC with respect to the Gross Receipts and Compensating Tax Act are to the New Mexico Statutes Annotated, 1978 (NMSA 1978).

Taxation and Revenue Department, Joseph M. Montoya Building, 1100 South St. Francis Drive, P.O. Box 630, Santa Fe NM 87504-0630

A. Persons who have previously paid the compensating tax on tangible personal property introduced into this state are not required to pay the compensating tax again on the reintroduction into the state of the same property if the property has been under the same ownership continu…

A. If a taxpayer uses merchandise for advertising or promotional purposes by giving away the merchandise without the requirement of a concurrent purchase, the taxpayer is liable for the compensating tax on the value of the merchandise if the merchandise was acquired by the taxpay…

A. A person engaged in the construction business who purchases construction materials, construction services, construction-related services or who leases construction equipment using nontaxable transaction certificates (nttcs) provided by the department for use under Sections 7-9…

A New Mexico buyer who purchases pipe from outside the state is subject to the New Mexico compensating tax on the total value of the pipe at the time it is introduced into New Mexico for use. Value includes charges for labor and material used in processing the pipe when processed…

A. Construction materials purchased with a nontaxable transaction certificate and subsequently used in a project, other than a project located on tribal territory the state taxation of which is pre-empted by federal law, which upon completion is not subject to gross receipts tax …

Services performed in New Mexico deductible by the purchaser as ordinary and necessary business expenses under the provisions of the Internal Revenue Code are "used" for purposes of Subsection B of Section 7-9-7 NMSA 1978. Nontaxable transaction certificates may not be issued for…

Services performed in New Mexico which are capitalized under the provisions of the Internal Revenue Code are "used" for purposes of Subsection B of Section 7-9-7 NMSA 1978. Nontaxable transaction certificates may not be issued for such transactions. If a taxpayer acquires these s…

The value of parts, motor oils and similar items taken from inventory held for sale, or purchased under Type 2 (resale) NTTCs, by automobile dealers for use in repairing or maintaining vehicles used by the dealers in the operation of the dealerships, as distinguished from vehicle…

Tangible personal property, such as contract forms and promotional and administrative materials, furnished to New Mexico dealers by out-of-state companies which undertake to administer automotive service contracts for a fee is property acquired as a result of a transaction with a…

This part applies to all persons using property in New Mexico.

If a hotel, motel or similar establishment has represented to a company engaged in the business of providing interstate telecommunications service that the hotel, motel or similar establishment is purchasing interstate telecommunication service for use as a service to guests of t…

A. 12 U.S.C. 1768 exempts federal credit unions from state taxation, other than property taxation. Accordingly, the use of property in New Mexico by federal credit unions is exempt from compensating tax. B. Section 58-11-61 NMSA 1978 exempts from state taxation credit unions orga…

29 U.S.C. 1707(c) bars imposition of any use or similar tax on the use by a Job Corps contractor of any property or service in connection with the operation of a Job Corps center, program or activity. Therefore, Job Corps contractors are exempt from the compensating tax with resp…

A. For periods after July 1, 2021, if a purchaser acquires services performed outside the state in a transaction that was not subject to the gross receipts tax and subsequently makes taxable use of that service in New Mexico, the service is subject to the gross receipts tax. For …

In determining whether compensating tax is owed, the purchaser may rely on the seller's invoice or other written billing or contract documentation that indicates that the seller has charged the gross receipts tax or has included the tax in the amount billed (whether by name or in…

Section 9-11-6.2 NMSA 1978.

Permanent.

11/15/96, unless a later date is cited at the end of a section, in which case the later date is the effective date.