HOUSE BILL 184

50th legislature - STATE OF NEW MEXICO - second session, 2012

INTRODUCED BY

David L. Doyle

AN ACT

RELATING TO TAXATION; DEFINING "CONSTRUCTION SERVICE" FOR THE PURPOSES OF THE DEDUCTION FROM GROSS RECEIPTS; PROVIDING FOR A DEDUCTION FROM GROSS RECEIPTS FROM THE LEASING OF EQUIPMENT USED ON A CONSTRUCTION PROJECT.

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

     SECTION 1. Section 7-9-52 NMSA 1978 (being Laws 1969, Chapter 144, Section 42, as amended by Laws 2000, Chapter 84, Section 4 and also by Laws 2000, Chapter 98, Section 2) is amended to read:

     "7-9-52. DEDUCTION--GROSS RECEIPTS TAX--SALE OF CONSTRUCTION SERVICES TO PERSONS ENGAGED IN THE CONSTRUCTION BUSINESS.--

          A. Receipts from selling a construction service may be deducted from gross receipts if the sale is made to a person engaged in the construction business who delivers a nontaxable transaction certificate to the person performing the construction service.

          B. The buyer delivering the nontaxable transaction certificate [must] shall have the construction services [performed upon] directly contracted for or billed to:

                (1) a construction project [which] that is subject to the gross receipts tax upon its completion or upon the completion of the overall construction project of which it is a part;

                (2) a construction project [which] that is subject to the gross receipts tax upon the sale in the ordinary course of business of the real property upon which it was constructed; or

                (3) a construction project that is located on the tribal territory of an Indian nation, tribe or pueblo.

          C. As used in this section, "construction 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 regulations; but "construction service" excludes general business services such as legal or accounting services, equipment maintenance and real estate sales commissions."

     SECTION 2. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

     "[NEW MATERIAL] DEDUCTION--GROSS RECEIPTS TAX--LEASE OF CONSTRUCTION EQUIPMENT TO PERSONS ENGAGED IN THE CONSTRUCTION BUSINESS.--

          A. Receipts from leasing construction equipment may be deducted from gross receipts if the construction equipment is leased to a person engaged in the construction business who delivers a nontaxable transaction certificate to the person leasing the construction equipment.

          B. The lessee delivering the nontaxable transaction certificate shall only use the construction equipment at the construction location of:

                (1) a construction project that is subject to the gross receipts tax upon its completion or upon the completion of the overall construction project of which it is a part;

                (2) a construction project that is subject to the gross receipts tax upon the sale in the ordinary course of business of the real property upon which it was constructed; or

                (3) a construction project that is located on the tribal territory of an Indian nation, tribe or pueblo.

          C. As used in this section, "construction equipment" means equipment used on a construction project, including trash containers, portable toilets, scaffolding and temporary fencing."

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