2023 New Mexico Statutes › Chapter 7 - Taxation › Article 9 - Gross Receipts and Compensating Tax › Section 7-9-73.2 - Deduction; gross receipts tax and governmental gross receipts tax; prescription drugs; oxygen; cannabis.

A. Receipts from the sale of prescription drugs and oxygen and oxygen services provided by a licensed medicare durable medical equipment provider and cannabis products that are sold in accordance with the Lynn and Erin Compassionate Use Act [Chapter 26, Article 2B NMSA 1978] may be deducted from gross receipts and governmental gross receipts.
B. For the purposes of this section, "prescription drugs" means insulin and substances that are:
(1) dispensed by or under the supervision of a licensed pharmacist or by a physician or other person authorized under state law to do so;
(2) prescribed for a specified person by a person authorized under state law to prescribe the substance; and
(3) subject to the restrictions on sale contained in Subparagraph 1 of Subsection (b) of 21 USCA 353.
History:
Laws 1998, ch. 95, § 2; Laws 1998, ch. 99, § 4; 2003, ch. 272, § 7; 2007, ch. 361, § 3; 2021 (1st S.S.), ch. 4, § 53.
ANNOTATIONS
The 2021 (1st S.S.) amendment,
effective June 29, 2021, provided a deduction from gross receipts for the sale of certain cannabis products; and in Subsection A, after "equipment provider", added "and cannabis products that are sold in accordance with the Lynn and Erin Compassionate Use Act".
The 2007 amendment,
effective July 1, 2007, permitted a deduction for receipts from the sale of oxygen and oxygen services provided by a licensed medicare durable medical equipment provider.
The 2003 amendment,
effective July 1, 2003, added the Subsection A designation and added Subsection B.
Medical marijuana deduction from gross receipts.
— Where taxpayer, a licensed producer authorized to dispense medical marijuana to qualified patients consistent with the Compassionate Use Act, §§ 26-2B-1 through 26-2B-7 (2007, as amended through 2021) NMSA 1978, sought refunds of gross receipts taxes that it paid in association with sales of medical marijuana from 2011-2016, and where those claims were denied by the administrative hearing officer on the grounds that the medical marijuana it dispenses to qualified patients does not constitute a "prescription drug" for purposes of the statutory deduction set forth in this section, the hearing officer erred in denying taxpayer's request for gross receipt tax refunds, because medical marijuana dispensed pursuant to the Compassionate Use Act meets the criteria set forth in Subsection B of this section; taxpayer is a licensed producer under the Compassionate Use Act and is undisputedly authorized under state law to dispense medical marijuana, the use of the marijuana at issue in this case was authorized by and for specific persons in accordance with state law, and medical marijuana is subject to restrictions for sale insofar as the Compassionate Use Act provides for access only after the patient has been duly diagnosed with a debilitating medical condition and has received written certification from a licensed practitioner that, in the practitioner's professional opinion, the potential health benefits of medical marijuana would likely outweigh the health risks to the patient.
Sacred Garden, Inc. v. N.M. Tax'n & Revenue Dep't
, 2021-NMCA-038, cert. granted.