New Mexico Administrative Code › Title 3 - TAXATION › Chapter 2 - GROSS RECEIPTS TAXES › Part 13 - AGENTS FOR COLLECTION OF COMPENSATING TAX - DUTIES › Section 3.2.13.10 - COLLECTION OF COMPENSATING TAX BY BROADCASTERS

Current through Register Vol. 35, No. 13, July 16, 2024
A. Receipts from the sale by a New Mexico
				radio or television broadcaster to an out-of-state advertising agency of
				broadcast time which is intended for subsequent sale to a national or regional
				seller or advertiser not having its principal place of business in or being
				incorporated in New Mexico but which broadcast time is resold instead to an
				in-state seller or advertiser (a New Mexico seller or advertiser or a national
				or regional seller or advertiser having its principal place in or incorporated
				in New Mexico) are subject to compensating tax pursuant to Subsection B of
				Section
				7-9-7
				NMSA 1978. The initial sale to the advertising agency was not subject to gross
				receipts tax but the subsequent use of that service by the in-state seller or
				advertiser means the sale should have been subject to the gross receipts tax.
				The New Mexico radio or television broadcaster providing the broadcast service
				used by the in-state seller or advertiser under these circumstances shall act
				as agent for collection of compensating tax from the in-state seller or
				advertiser pursuant to Section
				7-9-10
				NMSA 1978 and shall collect, report and pay over such compensating tax unless
				the out-of-state advertising agency pays gross receipts tax or collects,
				reports and pays over the compensating tax on the transaction.
B. The New Mexico radio or television
				broadcaster may effect collection of such compensating tax from the in-state
				seller or advertiser or the national or regional seller or advertiser having
				its principal place of business in or being incorporated in New Mexico by
				collecting the compensating tax through the out-of-state advertising agency
				representing the seller or advertiser. When collecting the compensating tax
				from the advertising agency, the radio or television broadcaster must identify
				the seller or advertiser and the amount of compensating tax due in its billing
				to the advertising agency. Payment of the compensating tax by the advertising
				agency to the broadcaster discharges the liability, under Section
				7-9-9
				NMSA 1978, of the in-state seller or advertiser for the compensating tax
				arising from the use of the broadcast services.
C. If the out-of-state advertising agency
				resells the time to another out-of-state entity ("cooperative advertising
				group") which, in turn, resells the time to in-state sellers or advertisers,
				the broadcaster is relieved from responsibility for identifying the seller or
				advertiser if the broadcaster's records identify the out-of-state other entity
				to which the out-of-state advertising agency resold the time. When the
				advertising agency resells the time to an out-of-state cooperative advertising
				group, the in-state seller or advertiser is discharged from liability for
				compensating tax if, on audit, the seller or advertiser presents an accounting
				from the out-of-state cooperative advertising group showing payment of the
				applicable compensating tax by the out-of-state cooperative advertising group
				to the advertising agency.