New Mexico Administrative Code › Title 3 - TAXATION › Chapter 2 - GROSS RECEIPTS TAXES › Part 20 - GOVERNMENTAL GROSS RECEIPTS › Section 3.2.20.25 - IMPLEMENTATION OF GOVERNMENTAL GROSS RECEIPTS TAX FOR CASH BASIS TAXPAYERS AND ACCRUAL BASIS TAXPAYERS

Current through Register Vol. 35, No. 13, July 16, 2024
A.
				Receipts of a cash basis taxpayer received prior to July 1, 1991 from selling
				tangible personal property or from performing a refuse collection, sewage or
				recreational, entertainment or athletic service which is to be delivered or
				performed after June 30, 1991 are not governmental gross receipts. Receipts
				received after June 30, 1991 by a cash basis taxpayer for tangible personal
				property sold prior to July 1, 1991 or from performing a refuse collection,
				sewage or recreational, entertainment or athletic service prior to July 1, 1991
				are governmental gross receipts.
B.
				Example: Village C reports governmental gross receipts tax on a cash basis. The
				Village sells a water heater and other tangible personal property being removed
				from a building which is to be demolished. The Village sells the items for
				$1,000 and receives payment on June 20, 1991 and delivers all but the water
				heater to the purchaser that same day. The purchaser does not actually pick up
				the water heater until July 2. Because the Village is a cash basis taxpayer, it
				does not matter that some of the tangible personal property was delivered after
				June 30, 1991. The $1,000 receipts are not governmental gross
				receipts.
C. Receipts of an accrual
				basis taxpayer received prior to July 1, 1991 from selling tangible personal
				property or from performing a refuse collection, sewage or recreational,
				entertainment or athletic service which is to be delivered or performed after
				June 30, 1991 are governmental gross receipts to the extent of the revenues
				recognized for accounting purposes after June 30, 1991. Receipts received after
				June 30, 1991 by an accrual basis taxpayer with respect to revenues recognized
				for accounting purposes on the taxpayer's accounts prior to July 1, 1991 for
				selling tangible personal property sold prior to July 1, 1991 or from
				performing a refuse collection, sewage or recreational, entertainment or
				athletic service prior July 1, 1991 are not governmental gross
				receipts.
D. Example: U, a state
				university, is an accrual basis taxpayer. U runs a series of concerts during
				the period June through August 1991. U sells season tickets to the concerts. U
				recognizes the revenue from the season tickets as the concerts are performed.
				That part of U's receipts from season ticket sales received prior to July 1,
				1991 are governmental gross receipts with respect to the receipts related to
				the concerts to be performed after June 30, 1991. Governmental gross receipts
				tax is due on the receipts related to the post-June concerts as they are
				recognized for accounting purposes as revenues on U's books.
E. Accrual basis taxpayers which bill
				customers for services or tangible personal property already delivered may
				reduce the amount reported as governmental gross receipts which represents the
				value of the service or tangible personal property provided prior to July 1,
				1991. If the value of such services or tangible personal property is separately
				determinable, then that amount may be removed from the amount of governmental
				gross receipts to be otherwise reportable. If the amount is not readily
				determinable but the billing represents delivery of service or tangible
				personal property for a period of time, such as a month, then the portion which
				may be removed from the amount otherwise reportable is the amount of the bill
				times a fraction, the numerator of which is the number of days in the billing
				period prior to July 1, 1991 and the denominator of which is the number of days
				in the billing period.
F. Example:
				City G operates a water utility. It uses an accrual method of accounting and
				reporting revenues. It bills monthly but divides its customers among 20
				different billing cycles, each of which begins on a different day of the month.
				In July 1991, some of the bills will be for water delivered almost entirely
				during the month of June 1991. Other customers will have only a few days of
				June delivery on their July bills. City A could reduce the amount of reportable
				governmental gross receipts for a billing cycle which runs from June 10, 1991
				through July 9, 1991 by subtracting 70% of the total amount received from the
				billing.
G. Section 3.2.20.25 NMAC
				is retroactively applicable to transactions occurring on or after July 1,
				1991.