New Mexico Administrative Code › Title 3 - TAXATION › Chapter 2 - GROSS RECEIPTS TAXES › Part 206 - DEDUCTION - GROSS RECEIPTS TAX - SALE OF A SERVICE FOR RESALE › Section 3.2.206.20 - TELECOMMUNICATIONS SERVICES

Current through Register Vol. 35, No. 13, July 16, 2024
A.
Cable television hook-up.
Receipts from selling the service of
				hook-ups to cable television for resale may be deducted from gross receipts if
				the sale is made to a buyer who delivers a nontaxable transaction certificate
				(nttc) to the seller. The subsequent sale must be in the ordinary course of
				business and the receipts subject to the gross receipts tax. This version of
				Subsection A of Section 3.2.206.20 NMAC applies to transactions occurring on or
				after July 1, 2000.
B.
Telephone services.
(1) Receipts
				of a telephone company from the performance of telephone services for a hotel
				or motel, to the extent that they are attributable to calls made from the rooms
				of the hotel's or motel's guests, may be deducted from gross receipts if the
				hotel or motel delivers a nontaxable transaction certificate (nttc) to the
				telephone company. The charge must be subject to the gross receipts tax or the
				hotel or motel will be subject to the compensating tax on the value of the
				telephone services.
(2) In order to
				apportion the use of telephone service at a hotel or motel between local calls
				made from the rooms of the hotel's or motel's guests and other local calls made
				from the hotel or motel, the department will, on audit of the telephone company
				claiming the deduction described in the preceding paragraph, allow as a
				deduction that portion of the receipts of the telephone company which are
				calculated in the following manner with respect to the month's billing to the
				hotel or motel:
(a) the telephone company's
				receipts from charges, indicated on its billing to the hotel or motel, as local
				service and additional local call and message units, which represent local
				telephone service are calculated; and
(b) the total calculated in Subparagraph (a)
				of Paragraph (2) of Subsection B of Section 3.2.206.20 NMAC is multiplied by a
				fraction, the numerator of which is the number of message units, as the term is
				used by the telephone company, indicated on its billing to the hotel or motel
				which represent local telephone calls which were made from the hotel or motel
				and the denominator of which is the total of message units, as the term is used
				by the telephone company, indicated on the telephone company's billing to the
				hotel or motel.
(3) The
				method set forth in Paragraph (2) of Subsection B of Section 3.2.206.20 NMAC is
				acceptable to the department as an "apportionment of use". However, other
				methods which more accurately reflect the apportionment of use may be
				acceptable to the department.
(4)
Example:
X is engaged in the business of selling alarm systems
				in New Mexico. As a part of these systems, a telephone line is leased by X from
				Y, a telephone company. Y bills X for each line on a monthly basis. X bills
				each customer on a monthly basis for service plus a telephone line charge.
				Receipts of Y from the performance of the telephone service for X may be
				deducted from Y's gross receipts if X delivers a type 5 nttc to Y. Receipts of
				X from its customers must be subject to the gross receipts tax, or X will be
				liable for the compensating tax on the value of the telephone services at the
				time they were rendered.
(5) This
				version of Subsection B of Section 3.2.206.20 NMAC applies to transactions
				occurring on or after July 1, 2000.