2023 New Mexico Statutes › Chapter 7 - Taxation › Article 9 - Gross Receipts and Compensating Tax › Section 7-9-60 - Deduction; gross receipts tax; governmental gross receipts tax; sales to certain organizations.

A. Except as provided otherwise in Subsection B of this section, receipts from selling tangible personal property to 501(c)(3) organizations may be deducted from gross receipts or from governmental gross receipts if the sale is made to an organization that delivers a nontaxable transaction certificate to the seller or provides alternative evidence pursuant to Section 7-9-43 NMSA 1978. The buyer shall employ the tangible personal property in the conduct of functions described in Section 501(c)(3) and shall not employ the tangible personal property in the conduct of an unrelated trade or business as defined in Section 513 of the United States Internal Revenue Code of 1986, as amended or renumbered.
B. The deduction provided by this section does not apply to receipts from selling construction material, excluding tangible personal property, whether removable or non-removable, that is or would be classified for depreciation purposes as three-year property, five-year property, seven-year property or ten-year property, including indirect costs related to the asset basis, by Section 168 of the Internal Revenue Code of 1986, as that section may be amended or renumbered, or from selling metalliferous mineral ore; except that receipts from selling construction material or from selling metalliferous mineral ore to a 501(c)(3) organization that is organized for the purpose of providing homeownership opportunities to low-income families may be deducted from gross receipts. Receipts may be deducted under this subsection only if the buyer delivers a nontaxable transaction certificate to the seller or provides alternative evidence pursuant to Section 7-9-43 NMSA 1978. The buyer shall use the property in the conduct of functions described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, and shall not employ the tangible personal property in the conduct of an unrelated trade or business, as defined in Section 513 of that code.
C. For the purposes of this section, "501(c)(3) organization" means an organization that has been granted exemption from the federal income tax by the United States commissioner of internal revenue as an organization described in Section 501(c)(3) of the United States Internal Revenue Code of 1986, as amended or renumbered.
History:
1953 Comp., § 72-16A-14.15; Laws 1970, ch. 12, § 4; 1992, ch. 100, § 8; 1995, ch. 50, § 4; 2001, ch. 343, § 6; 2007, ch. 45, § 12; 2018, ch. 58, § 2; 2021, ch. 65, § 23.
ANNOTATIONS
Repeals and reenactments.
— Laws 1970, ch. 12, § 4 repealed former 7-9-60 NMSA 1978, as enacted by Laws 1969, ch. 144, § 50.
Cross references.
— For Sections 501(c)(3) and 513 of the Internal Revenue Code of 1986,
see
26 U.S.C. §§ 501(c)(3) and 513, respectively.
The 2021 amendment,
effective July 1, 2021, provided that a taxpayer may provide the taxation and revenue department alternative evidence to claim a gross receipts tax deduction in lieu of providing a non-taxable transaction certificate; in Subsection A, after "to the seller", added "or provides alternative evidence pursuant to Section 7-9-43 NMSA 1978", and after "buyer", deleted "delivering the nontaxable transaction certificate"; and in Subsection B, after "to the seller", added "or provides alternative evidence pursuant to Section 7-9-43 NMSA 1978".
The 2018 amendment,
effective March 2, 2018, clarified the meaning of construction material as used in the Gross Receipts and Compensating Tax Act; and in Subsection B, after the first occurrence of "construction material", added "excluding tangible personal property, whether removable or non-removable, that is or would be classified for depreciation purposes as three-year property, five-year property, seven-year property or ten-year property, including indirect costs related to the asset basis, by Section 168 of the Internal Revenue Code of 1986, as that section may be amended or renumbered".
The 2007 amendment,
effective July 1, 2007, in Subsection A, changed "organizations" to "501(c)(3) organizations" and deleted the former qualification that organizations had to have been granted exemption from the federal income tax by the United States commissioner of internal revenue as organizations described in Section 501(c)(3) of the United States Internal Revenue Code of 1986, as amended or renumbered; in Subsection B, added the exception that receipts from selling to a 501(c)(3) organization that is organized for the purpose of providing homeownership opportunities to low-income families may be deducted from gross receipts if the buyer delivers a nontaxable transaction certificate and the buyer uses the property in the conduct of functions described in Section 501(c)(3); and added Subsection C.
The 2001 amendment,
effective July 1, 2001, substituted "construction material" for "tangible personal property that will become an ingredient or component part of a construction project" in Subsection B.
The 1995 amendment,
effective July 1, 1995, added "tax" following "governmental growth receipts" in the section heading; designated the existing provisions as Subsection A and added Subsection B; and, in Subsection A, added the exception at the beginning, deleted "other than metalliferous mineral ore" following "personal property" near the beginning of the first sentence, substituted "shall" for "must" in two places in the second sentence, and deleted the former third sentence which read "Receipts from selling tangible personal property that will become an ingredient or component part of a construction project are not receipts from selling tangible personal property for purposes of this section".
The 1992 amendment,
effective July 1, 1992, inserted "governmental gross receipts" in the section heading; inserted "or from governmental gross receipts" near the end of the first sentence; and twice substituted "Internal Revenue Code of 1986" for "Internal Revenue Code of 1954".
Telephone services not tangible personalty.
— Decision that a telephone company was not entitled to a deduction under this section for receipts collected for intrastate toll charges and local phone calls from certain government organizations and organizations which had been granted federal income tax exemptions would be upheld, since there was a reasonable basis for differentiating between electricity (declared to be tangible personalty at Section 7-9-3J NMSA 1978) and telephone communications where the evidence showed that more was involved in the telephone business than the selling of electricity.
Leaco Rural Tel. Coop., Inc. v. Bureau of Revenue
, 1974-NMCA-076, 86 N.M. 629, 526 P.2d 426.