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New Mexico has enacted legislation that expands deductions for manufacturing consumables. Receipts from selling tangible personal property consumed in the manufacturing of a product to a person engaged in the business of manufacturing that product and who delivers a nontaxable transaction certificate to the seller may be deducted from gross receipts or governmental gross receipts. The property cannot be a tool or equipment used to create the manufactured product. The receipts may be deducted in the following percentages: 20% of receipts received prior to January 1, 2014; 40% of receipts received in calendar year 2014; 60% of receipts received in calendar year 2015; 80% of receipts received in calendar year 2016; 100% of receipts received on or after January 1, 2017. Deductions for manufacturing consumables must be reported separately, with the amount of each deduction attributed to the appropriate authorization provided in the legislation. (H.B. 184, Laws 2012, effective January 1, 2012)

(05/21/2012)

New Mexico has enacted legislation that provides a gross receipts deduction for construction-related services, provides a deduction for construction equipment leases, and expands deductions for manufacturing consumables. These deductions apply when the construction project is subject to the Gross Receipts Tax or qualify as an exempt project due to the customer but otherwise would have been taxable. The deduction for sales of construction services to persons engaged in the construction business has been expanded to include construction-related services. “Construction-related service” means a service directly contracted for or billed to a specific construction project, including design, architecture, drafting, surveying, engineering, environmental and structural testing, security, sanitation, and services required to comply with governmental construction-related regulations. “Construction-related service” does not include general business services such as legal or accounting services, equipment maintenance, and real estate sales commissions. Receipts from leasing construction equipment may be deducted from gross receipts if the equipment is leased to an individual in the construction business who delivers a nontaxable transaction certificate to the equipment lessor. The lessee can only use the equipment at the location of a construction project that is subject to the gross receipts tax when it is completed or on the completion of the overall project which it is part of, a construction project that is subject to the gross receipts tax upon the sale of the real property upon which it was constructed, or a construction project that is located on the tribal territory of an Indian nation, tribe or pueblo. “Construction equipment” means equipment used on a construction project, including trash containers, portable toilets, scaffolding, and temporary fencing. (H.B. 184, Laws 2012, effective January 1, 2012)

(05/21/2012)

The New Mexico Taxation and Revenue Department issued a letter ruling on the sales and use tax treatment of a securities broker’s services. Fees for internet and touchtone phone trades placed by customers assigned to a New Mexico location but routed to brokers located in offices outside of New Mexico for execution are not subject to New Mexico gross receipts tax. In this case, brokers perform no services in New Mexico therefore the fees are not subject to New Mexico gross receipts tax. Fees for broker-assisted trades originated by brokers in offices outside of New Mexico for a New Mexico resident are likewise not subject to New Mexico gross receipts tax because no services are performed in New Mexico. Fees for broker-assisted trades by brokers located in New Mexico are subject to New Mexico gross receipts tax as the services are performed in New Mexico. (Ruling No. 401-12-1, New Mexico Taxation and Revenue Department, February 10, 2012)

(03/26/2012)

A new regulation, effective June 30, 2010, has been adopted by the New Mexico Department of Revenue that establishes mandatory electronic filing requirements for gross receipts, withholding, and weight distance taxes. For returns due after August 1, 2010, the returns and reports for the following taxes must be filed electronically using approved electronic media: gross receipts and compensating taxes, local option gross receipts taxes, leased vehicle gross receipts taxes, telecommunications gross receipts taxes and withholding taxes that are due at the same time as gross receipts tax, if the taxpayer’s average monthly tax payment for this group of taxes during the preceding calendar year equaled or exceeded $20,000. Weight distance taxes must be filed electronically if the taxpayer must pay taxes for two or more trucks. For returns due after January 1, 2011, taxes must be filed electronically for if the taxpayer’s average monthly tax payment for this group of taxes during the preceding calendar year equaled or exceeded $10,000. For returns due after July 1, 2011, taxes must be filed electronically if the taxpayer is required to file monthly. Taxpayers with extenuating circumstances that meet the states parameters can request an exception to the electronic filing requirements. (NM3.1.4.10, 3.1.4.18, New Mexico Taxation and Revenue Department, effective June 30, 2010).

(09/13/2010)

The New Mexico Taxation and Revenue Department has enacted a temporary tax amnesty program allowing individuals and businesses to avoid paying penalties and interest on any unreported or unassessed taxes due before January 1, 2010. The amnesty period runs from June 7, 2010 to September 30, 2010. Taxpayers who sign an amnesty agreement within that period will not be assessed penalties. In addition, they will not have to pay interest on the tax assessment if the tax due is paid within 180 days. Additional information is available at http://www.taxrelief.newmexico.gov/index.html (Release, New Mexico Taxation and Revenue Department, June 7, 2010).

(07/30/2010)

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