0001| HOUSE BILL 1254 | 0002| 43rd legislature - STATE OF NEW MEXICO - first session, 1997 | 0003| INTRODUCED BY | 0004| JERRY W. SANDEL | 0005| | 0006| | 0007| | 0008| | 0009| | 0010| AN ACT | 0011| RELATING TO TAXATION; AMENDING SECTIONS OF THE GROSS RECEIPTS | 0012| AND COMPENSATING TAX ACT. | 0013| | 0014| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0015| Section 1. Section 7-9-3 NMSA 1978 (being Laws 1978, | 0016| Chapter 46, Section 1, as amended) is amended to read: | 0017| "7-9-3. DEFINITIONS.--As used in the Gross Receipts and | 0018| Compensating Tax Act: | 0019| A. "department" means the taxation and revenue | 0020| department, the secretary of taxation and revenue or any | 0021| employee of the department exercising authority lawfully | 0022| delegated to that employee by the secretary; | 0023| B. "buying" or "selling" means any transfer of | 0024| property for consideration or any performance of service for | 0025| consideration; | 0001| C. "construction" means building, altering, | 0002| repairing or demolishing in the ordinary course of business | 0003| any: | 0004| (1) road, highway, bridge, parking area or | 0005| related project; | 0006| (2) building, stadium or other structure; | 0007| (3) airport, subway or similar facility; | 0008| (4) park, trail, athletic field, golf course | 0009| or similar facility; | 0010| (5) dam, reservoir, canal, ditch or similar | 0011| facility; | 0012| (6) sewerage or water treatment facility, | 0013| power generating plant, pump station, natural gas compressing | 0014| station, gas processing plant, coal gasification plant, | 0015| refinery, distillery or similar facility; | 0016| (7) sewerage, water, gas or other pipeline; | 0017| (8) transmission line; | 0018| (9) radio, television or other tower; | 0019| (10) water, oil or other storage tank; | 0020| (11) shaft, tunnel or other mining | 0021| appurtenance; | 0022| (12) microwave station or similar facility; or | 0023| (13) similar work; | 0024| "construction" also means: | 0025| (14) leveling or clearing land; | 0001| (15) excavating earth; | 0002| (16) drilling wells of any type, including | 0003| seismograph shot holes or core drilling; or | 0004| (17) similar work; | 0005| D. "financial corporation" means any savings and | 0006| loan association or any incorporated savings and loan company, | 0007| trust company, mortgage banking company, consumer finance | 0008| company or other financial corporation; | 0009| E. "engaging in business" means carrying on or | 0010| causing to be carried on any activity with the purpose of | 0011| direct or indirect benefit; | 0012| F. "gross receipts" means the total amount of money | 0013| or the value of other consideration received from selling | 0014| property in New Mexico, from leasing property employed in New | 0015| Mexico, from selling services performed outside New Mexico the | 0016| product of which is initially used in New Mexico or from | 0017| performing services in New Mexico. In an exchange in which the | 0018| money or other consideration received does not represent the | 0019| value of the property or service exchanged, "gross receipts" | 0020| means the reasonable value of the property or service | 0021| exchanged. | 0022| (1) "Gross receipts" includes: | 0023| (a) any receipts from sales of tangible | 0024| personal property handled on consignment; | 0025| (b) the total commissions or fees | 0001| derived from the business of buying, selling or promoting the | 0002| purchase, sale or leasing, as an agent or broker on a | 0003| commission or fee basis, of any property, service, stock, bond | 0004| or security; | 0005| (c) amounts paid by members of any | 0006| cooperative association or similar organization for sales or | 0007| leases of personal property or performance of services by such | 0008| organization; and | 0009| (d) amounts received from transmitting | 0010| messages or conversations by persons providing telephone or | 0011| telegraph services. | 0012| (2) "Gross receipts" excludes: | 0013| (a) cash discounts allowed and taken; | 0014| (b) New Mexico gross receipts tax, | 0015| governmental gross receipts tax and leased vehicle gross | 0016| receipts tax payable on transactions for the reporting period; | 0017| (c) taxes imposed pursuant to the | 0018| provisions of any local option gross receipts tax that is | 0019| payable on transactions for the reporting period; | 0020| (d) any gross receipts or sales taxes | 0021| imposed by an Indian nation, tribe or pueblo provided that the | 0022| tax is approved, if approval is required by federal law or | 0023| regulation, by the secretary of the interior of the United | 0024| States and provided further that the gross receipts or sales | 0025| tax imposed by the Indian nation, tribe or pueblo provides a | 0001| reciprocal exclusion for gross receipts, sales or gross | 0002| receipts-based excise taxes imposed by the state or its | 0003| political subdivisions; | 0004| (e) any type of time-price differential; | 0005| and | 0006| (f) amounts received solely on behalf of | 0007| another in a disclosed agency capacity. | 0008| (3) When the sale of property or service is | 0009| made under any type of charge, conditional or time-sales | 0010| contract or the leasing of property is made under a leasing | 0011| contract, the seller or lessor may elect to treat all receipts, | 0012| excluding any type of time-price differential, under such | 0013| contracts as gross receipts as and when the payments are | 0014| actually received. If the seller or lessor transfers his | 0015| interest in any such contract to a third person, the seller or | 0016| lessor shall pay the gross receipts tax upon the full sale or | 0017| leasing contract amount, excluding any type of time-price | 0018| differential; | 0019| G. "manufacturing" means combining or processing | 0020| components or materials to increase their value for sale in the | 0021| ordinary course of business, but does not include construction; | 0022| H. "person" means: | 0023| (1) any individual, estate, trust, receiver, | 0024| cooperative association, club, corporation, company, firm, | 0025| partnership, limited liability company, limited liability | 0001| partnership, joint venture, syndicate or other entity, | 0002| including any gas, water or electric utility owned or operated | 0003| by a county, municipality or other political subdivision of the | 0004| state; or | 0005| (2) any national, federal, state, Indian or | 0006| other governmental unit or subdivision, or any agency, | 0007| department or instrumentality of any of the foregoing; | 0008| I. "property" means real property, tangible | 0009| personal property, licenses, franchises, patents, trademarks | 0010| and copyrights. Tangible personal property includes | 0011| electricity and manufactured homes; | 0012| J. "leasing" means any arrangement whereby, for a | 0013| consideration, property is employed for or by any person other | 0014| than the owner of the property, except that the granting of a | 0015| license to use property is the sale of a license and not a | 0016| lease; | 0017| K. "service" means all activities engaged in for | 0018| other persons for a consideration, which activities involve | 0019| predominantly the performance of a service as distinguished | 0020| from selling or leasing property. "Service" includes | 0021| activities performed by a person for its members or | 0022| shareholders. In determining what is a service, the intended | 0023| use, principal objective or ultimate objective of the | 0024| contracting parties shall not be controlling. "Service" | 0025| includes construction activities and all tangible personal | 0001| property that will become an ingredient or component part of a | 0002| construction project. Such tangible personal property retains | 0003| its character as tangible personal property until it is | 0004| installed as an ingredient or component part of a construction | 0005| project in New Mexico. However, sales of tangible personal | 0006| property that will become an ingredient or component part of a | 0007| construction project to persons engaged in the construction | 0008| business are sales of tangible personal property; | 0009| L. "use" or "using" includes use, consumption or | 0010| storage other than storage for subsequent sale in the ordinary | 0011| course of business or for use solely outside this state; | 0012| M. "secretary" means the secretary of taxation and | 0013| revenue or the secretary's delegate; | 0014| N. "manufactured home" means a moveable or portable | 0015| housing structure for human occupancy that exceeds either a | 0016| width of eight feet or a length of forty feet constructed to be | 0017| towed on its own chassis and designed to be installed with or | 0018| without a permanent foundation; | 0019| O. "initial use" or "initially used" means the | 0020| first employment for the intended purpose and does not include | 0021| the following activities: | 0022| (1) observation of tests conducted by the | 0023| performer of services; | 0024| (2) participation in progress reviews, | 0025| briefings, consultations and conferences conducted by the | 0001| performer of services; | 0002| (3) review of preliminary drafts, drawings and | 0003| other materials prepared by the performer of the services; | 0004| (4) inspection of preliminary prototypes | 0005| developed by the performer of services; or | 0006| (5) similar activities; | 0007| P. "research and development services" means any | 0008| activity engaged in for other persons for consideration, for | 0009| one or more of the following purposes: | 0010| (1) advancing basic knowledge in a recognized | 0011| field of natural science; | 0012| (2) advancing technology in a field of | 0013| technical endeavor; | 0014| (3) the development of a new or improved | 0015| product, process or system with new or improved function, | 0016| performance, reliability or quality, whether or not the new or | 0017| improved product, process or system is offered for sale, lease | 0018| or other transfer; | 0019| (4) the development of new uses or | 0020| applications for an existing product, process or system, | 0021| whether or not the new use or application is offered as the | 0022| rationale for purchase, lease or other transfer of the product, | 0023| process or system; | 0024| (5) analytical or survey activities | 0025| incorporating technology review, application, trade-off study, | 0001| modeling, simulation, conceptual design or similar activities, | 0002| whether or not offered for sale, lease or other transfer; or | 0003| (6) the design and development of prototypes | 0004| or the integration of systems incorporating advances, | 0005| developments or improvements included in Paragraphs (1) through | 0006| (5) of this subsection; [and] | 0007| Q. "local option gross receipts tax" means a tax | 0008| authorized to be imposed by a county or municipality upon the | 0009| taxpayer's gross receipts and required to be collected by the | 0010| department at the same time and in the same manner as the gross | 0011| receipts tax; "local option gross receipts tax" includes the | 0012| taxes imposed pursuant to the Municipal Local Option Gross | 0013| Receipts Taxes Act, Supplemental Municipal Gross Receipts Tax | 0014| Act, [Special Municipal Gross Receipts Tax Act] County Local | 0015| Option Gross Receipts Taxes Act, Local Hospital Gross Receipts | 0016| Tax Act, County Correctional Facility Gross Receipts Tax Act | 0017| and such other acts as may be enacted authorizing counties or | 0018| municipalities to impose taxes on gross receipts, which taxes | 0019| are to be collected by the department; and | 0020| R. "Internal Revenue Code" means the federal | 0021| Internal Revenue Code of 1986, as amended." | 0022| Section 2. Section 7-9-13.2 NMSA 1978 (being Laws 1992, | 0023| Chapter 100, Section 3, as amended) is amended to read: | 0024| "7-9-13.2. EXEMPTION--GOVERNMENTAL GROSS RECEIPTS TAX-- | 0025| RECEIPTS SUBJECT TO CERTAIN OTHER TAXES.--Exempted from the | 0001| governmental gross receipts tax are receipts from transactions | 0002| involving tangible personal property or services on which | 0003| receipts or transactions the gross receipts tax, compensating | 0004| tax, motor vehicle excise tax, gasoline tax, [special fuel | 0005| tax] special fuel excise tax, oil and gas emergency school | 0006| tax, resources tax, processors tax, service tax or the excise | 0007| tax imposed under Section 66-12-6.1 NMSA 1978 is imposed." | 0008|  |