46th legislature - STATE OF NEW MEXICO - first session, 2003

RELATING TO TAXATION; PROVIDING ADDITIONAL GROSS RECEIPTS AND COMPENSATING TAX DEDUCTIONS AND EXEMPTIONS RELATED TO SPACE VEHICLES; PROVIDING A GROSS RECEIPTS TAX DEDUCTION FOR CERTAIN TESTING SERVICES AND A COMPENSATING TAX DEDUCTION FOR THE USE OF CERTAIN MATERIALS OR DEVICES USED IN RESEARCH OR TESTING; AMENDING AND ENACTING SECTIONS OF THE GROSS RECEIPTS AND COMPENSATING TAX ACT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. A new section of the Gross Receipts and Compensating Tax Act, Section 7-9-26.1 NMSA 1978, is enacted to read:

"7-9-26.1. [NEW MATERIAL] EXEMPTION--GROSS RECEIPTS TAX AND COMPENSATING TAX--FUEL FOR SPACE VEHICLES.--

A. Exempted from the gross receipts tax are the receipts from selling fuel, oxidizer or a substance that combines fuel and oxidizer to propel space vehicles or to operate space vehicle launchers.

B. Exempted from the compensating tax is the use of fuel, oxidizer or a substance that combines fuel and oxidizer to propel space vehicles or to operate space vehicle launchers."

Section 2. Section 7-9-30 NMSA 1978 (being Laws 1969, Chapter 144, Section 23, as amended) is amended to read:

"7-9-30. EXEMPTION--COMPENSATING TAX--RAILROAD EQUIPMENT, [AND] AIRCRAFT AND SPACE VEHICLES.--

A. Exempted from the compensating tax is the use of railroad locomotives, trailers, containers, tenders or cars procured or bought for use in railroad transportation.

B. Exempted from the compensating tax is the use of commercial aircraft bought or leased primarily for use in the transportation of passengers or property for hire in interstate commerce.

C. Exempted from the compensating tax is the use of space vehicles for transportation of persons or property in, to or from space."

Section 3. A new section of the Gross Receipts and Compensating Tax Act, Section 7-9-46.1 NMSA 1978, is enacted to read:

"7-9-46.1. [NEW MATERIAL] DEDUCTION--GROSS RECEIPTS--MANUFACTURING SPACE VEHICLES.--

A. Receipts from manufacturing space vehicles or components thereof may be deducted from gross receipts.

B. Receipts from selling the service of combining or processing ingredient or component parts of a space vehicle may be deducted from gross receipts."

Section 4. Section 7-9-54.2 NMSA 1978 (being Laws 1995, Chapter 183, Section 2, as amended) is amended to read:

"7-9-54.2. GROSS RECEIPTS--DEDUCTION--SPACEPORT OPERATION--SPACE OPERATIONS--LAUNCHING, OPERATING AND RECOVERING SPACE VEHICLES OR PAYLOADS--PAYLOAD SERVICES.--

A. [For the period from July 1, 2001 through June 30, 2006] Receipts from launching, operating or recovering space vehicles or payloads in New Mexico may be deducted from gross receipts.

B. [For the period from July 1, 2001 through June 30, 2006] Receipts from preparing a payload in New Mexico are deductible from gross receipts.

C. [For the period from July 1, 2001 through June 30, 2006] Receipts from operating a spaceport in New Mexico are deductible from gross receipts.

D. As used in this section:

(1) "payload" means a system, subsystem or other mechanical structure or material to be conveyed into space that is designed, [and] constructed or intended to perform a function in space;

(2) "space" means any location beyond altitudes of sixty thousand feet above the earth's mean sea level;

(3) "space operations" means the process of commanding and controlling payloads in space; and

(4) "spaceport" means an installation and related facilities used for the launching, landing, operating, recovering, servicing and monitoring of vehicles capable of entering or returning from space.

E. Receipts from the sale of tangible personal property that will become an ingredient or component part of a construction project or from performing construction services may not be deducted under this section."

Section 5. A new section of the Gross Receipts and Compensating Tax Act, Section 7-9-54.4 NMSA 1978, is enacted to read:

"7-9-54.4. [NEW MATERIAL] DEDUCTION--GROSS RECEIPTS--TESTING SERVICES AT FEDERALLY OWNED FACILITIES.--

A. Receipts from testing services at a federally owned facility on a federal reservation may be deducted from gross receipts.

B. As used in this section:

(1) "federal reservation" means any single federal reservation extending into five or more New Mexico counties together with any contiguous federal military installations, on which reservation and installations missiles, space vehicles, space launchers or components of any of the foregoing are tested; and

(2) "testing services" means planning, preparing or conducting tests of materials, components, assemblages, missiles, space vehicles or space launchers, maintaining or operating test facilities, including any construction related to a test, reporting test results and performing any associated administrative, support, development or management service."

Section 6. A new section of the Gross Receipts and Compensating Tax Act, Section 7-9-54.5 NMSA 1978, is enacted to read:

"7-9-54.5. [NEW MATERIAL] DEDUCTION--COMPENSATING TAX--TEST ARTICLES.--

A. The value of test articles used in New Mexico exclusively for research or testing, placing on public display after research or testing or storage for future research, testing or public display may be deducted in computing compensating tax due. This subsection does not apply to any other use of a test article.

B. The value of equipment and materials used in New Mexico for research or testing, or for supporting the research or testing of, test articles or for storage of such equipment or materials for research or testing, or supporting the research and testing of, test articles may be deducted in computing compensating tax due. This subsection does not apply to any other use of such equipment and materials.

C. As used in this section, a "test article" is a material or device intended to be used in research or testing to determine properties and qualities of the material or device. "Test article", however, excludes any material or device used in nondestructive testing and subsequently used in its designed or intended application."

Section 7. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2003.