44th legislature - STATE OF NEW MEXICO - second session, 2000

RELATING TO TAXATION; PROVIDING A DEDUCTION FROM GROSS RECEIPTS FOR RECEIPTS FROM THE SALE OF CONSTRUCTION MATERIALS, CONSTRUCTION SERVICES, AGRICULTURAL PROCESSING EQUIPMENT AND RELATED INSTALLATION SERVICES FOR USE IN NEW OR EXPANDED AGRICULTURAL PROCESSING OPERATIONS.

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 is enacted to read:

"[NEW MATERIAL] DEDUCTION--GROSS RECEIPTS TAX--SALE OF CERTAIN SERVICES, MATERIALS AND EQUIPMENT FOR AGRICULTURAL PROCESSING OPERATIONS--DEFINITIONS.--

A. Receipts from the sale of construction services to expand existing or construct new facilities for an agricultural processing operation located in New Mexico may be deducted from gross receipts if the construction service is sold to a person who delivers a nontaxable transaction certificate to the person performing the construction service.

B. Receipts from the sale of construction materials purchased for use to expand existing or construct new facilities for an agricultural processing operation located in New Mexico may be deducted from gross receipts if the materials are sold to a person who delivers a nontaxable transaction certificate to the person selling the materials.

C. Receipts from the sale of agricultural processing equipment purchased for use in a new or expanded agricultural processing operation located in New Mexico may be deducted from gross receipts if the equipment is sold to a person who delivers a nontaxable transaction certificate to the person selling the equipment.

D. Receipts from the sale of installation services necessary to install agricultural processing equipment in a new or expanded agricultural processing operation located in New Mexico may be deducted from gross receipts if the installation service is sold to a person who delivers a nontaxable transaction certificate to the person performing the installation service.

E. As used in this section:

(1) "agricultural processing equipment" means equipment necessary to conduct a new or expanded agricultural processing operation;

(2) "agricultural processing operation" means a plant, business or establishment at which personnel are employed for the purpose of processing agricultural products, including storage, handling, packaging and similar activities associated with processing;

(3) "agricultural product" means a raw or unprocessed product of a plant or animal;

(4) "construction service" means a service necessary to construct or expand an agricultural processing operation; and

(5) "installation service" means a service required to install and make operational agricultural processing equipment necessary to conduct an agricultural processing operation.

F. Election by a taxpayer to deliver the nontaxable transaction certificate necessary to support a deduction for receipts from the sale of agricultural processing equipment, pursuant to the provisions of this section, shall preclude availability of the investment credit that would be available with regard to the same equipment pursuant to the provisions of the Investment Credit Act."

Section 2. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2000.