Stay up to date with sales tax: Join our mailing list!

Effective January 1, 2005, the New Mexico gross receipts (sales) tax on food is eliminated. The deduction can be applied to the sale of food that is not already exempt or deductible and is separately stated when purchased in a "food retail store." "Food" as defined in the federal food stamp program only includes food and food products for home consumption. "Food retail store" refers to a place that sells food or food products for home preparation and consumption. (House Legislation, HB 625, effective as noted above)


Because of the many changes made annually to the Gross Receipts and Compensating Act, a new measure to avoid these tracking and signing order problems has been passed. Effective July 1, 2003, there will be a new definition of "gross receipts" along with the reorganization of certain gross receipts (sales) and compensating (use) tax statutes. The definition is amended to incorporate the additional definitions of gross receipts relating to mobile telecommunications services. Further, the definitions of "construction," "engaging in business," "prescription drugs," and "construction material" are removed from Sec. 7-9-3 NMSA 1978. The legislation enacts a new statute for the purpose of defining "construction" and "construction material." However, the definition of "construction material" is not altered from its current state, and the definition of "construction" contains a technical change and is not substantively altered. (Ch. 272 (H.B. 126), Laws 2003, January 27, 2003.)


In 1998, Santa Fe enacted a city ordinance which required owners of telecommunication facilities to get lease approval by the city, making sure it was "in the best interest of the public". Section 253 of the Federal Telecommunications Act of 1996 preempted the ordinance citing that Santa Fe city officials would essentially have complete control over who could and could not provide telecom services in their community. This provision was required to be removed from the regulation. The federal law also required the city to drop a section of the ordinance which discussed the fee structure because it impeded a company's ability to provide service. (Qwest Corp. v. City of Santa Fe, U.S. District Court for the District of New Mexico, No. CIV 00-795, August 29, 2002)


A subcontractor was required to remit sales tax because of its inability to provide proof of nontaxable transaction certificates (NTTCs) in a timely manner. These certificates were needed to support deductions previously claimed. The subcontractor argued that the general contractors originally told them the projects did not meet a gross receipts tax status, thus they were not in possession of all of the required NTTCs. The state denied the subcontractor's argument citing lack of knowledge of its own tax liability was negligent and not a valid argument for abatement. In New Mexico, if a taxpayer does not obtain the required NTTCs within 60 days of receiving a notice from the Taxation and Revenue Department, the deductions become invalid. (In the Matter of the Protest of J.W. Jones Mechanical Contractors, Inc., New Mexico Taxation and Revenue Department, No. 01-134848-00-8, August 15, 2002)



Scroll to Top