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New Mexico has issued a ruling regarding the application of gross receipts taxes to the home sale and construction activities of a seller of residential real estate and an affiliated construction company. If the seller contracts with the construction company to build a home on a lot that it then sells to a customer, the seller’s services in selling the home are deductible from gross receipts since they are receipts from the sale of real property. In this scenario, the construction company’s sales of construction services to the seller of the home are subject to gross receipts tax. If the seller buys an already-constructed home from the construction company and sells it to a customer, the seller’s receipts from the home sale are deductible. In this scenario, the construction company’s sales of construction services are subject to gross receipts tax. However, the construction company may deduct the cost of the lot from receipts derived from the sales of the completed home to the seller.(Ruling No. 430-14-1, New Mexico Taxation and Revenue Department, July 25, 2014, released October 2014)

(05/13/2015)

On March 10, 2015, a bipartisan group of senators introduced the Marketplace Fairness Act of 2015. Similar legislation – the Marketplace Fairness Act of 2013 – was previously introduced in February 2013 and passed by the Senate on May 6, 2013. That legislation failed to be enacted. If passed, the Marketplace Fairness Act of 2015 would authorize states meeting certain requirements to require remote sellers that do not meet a "small seller exception" to collect their state and local sales and use taxes. For more information on the previous legislation, visit Federal Government Introduces New Remote Seller Bill. (Marketplace Fairness Act of 2015, March 10, 2015)

 

UPDATE: This bill failed to pass during the 114th Congressional Session running from January 3, 2015 to January 3, 2017.  Therefore, this bill has died and would need to be reintroduced to be considered and voted on.

(03/16/2015)

On December 16, 2014, President Barack Obama signed the Consolidated and Further Continuing Appropriations Act, 2015, for sales and use tax purposes. The Act includes a provision that extends the Internet Tax Freedom Act (ITFA) until October 1, 2015 with all provisions unchanged.

 

On January 9, 2015, the House of Representative introduced a bill (un-numbered) that would permanently extend the ITFA, banning states and local jurisdictions from imposing any new tax on internet access. The proposed bill removes the current effective dates of November 1, 2003 through October 1, 2015 and changes the effective date to be effective for new taxes imposed after the date of the enactment.  It is not clear if states that have been grandfathered under the existing provision could retain their current tax on internet access but it appears that may be the case.  No formal legislation has been introduced that would incorporate the Marketplace Fairness Act into this bill. The bill is sponsored by House Judiciary Committee Chairman Bob Goodlatte, among others.

 

For our previous news item on this topic, see Internet Tax Freedom Act is Extended Through December 11, 2014.

 

For an update on this news item, see Internet Tax Freedom Act Extended Until December 11, 2015.

 

(Consolidated and Further Continuing Appropriations Act, 2015; H.R. 235)

(02/12/2015)

President Barack Obama has signed federal legislation extending the Internet Tax Freedom Act (ITFA) through December 11, 2014 as part of the joint resolution which made continuing appropriations for fiscal year 2015. The ITFA was previously set to expire on November 1, 2014. The ITFA bars state and local governments from imposing multiple or discriminatory taxes on electronic commerce and taxes on Internet access.

 

For an update to this news item, see Internet Tax Freedom Act Extended Until October 1, 2015, Permanent Extension Introduced.

 

(P.L. 113-164 (H.J. Res. 124), 113th Congress, 2nd Session, Laws 2014)

(09/26/2014)

Effective July 1, 2014, New Mexico has enacted a deduction from gross receipts tax for receipts from payments by the U.S. government or a U.S. government agency for medical and other health services provided by a dialysis facility to certain Medicare beneficiaries, prior to July 1, 2024. A "dialysis facility" is an end-stage renal disease facility as defined by federal regulations. The deduction will be rolled out according to the following schedule. From July 1, 2014, through June 30, 2015, 33 1/3% of the receipts are deductible. From July 1, 2015, through June 30, 2016, 66 2/3% of the receipts are deductible. After June 30, 2016, 100% of the receipts are deductible. This deduction is in addition to a number of other health related deductions for other types of health payments by the federal government. (H.B. 32, Laws2014)

(03/31/2014)

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