44TH LEGISLATURE - STATE OF NEW MEXICO - FIRST SESSION, 1999

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

A. Receipts from the sale of construction services to expand existing or construct new facilities for a manufacturing 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 a manufacturing 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 manufacturing equipment purchased for use in a new or expanded manufacturing 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 manufacturing equipment in a new or expanded manufacturing 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) "construction service" means a service necessary to construct or expand a manufacturing operation;

(2) "manufacturing equipment" means equipment necessary to conduct a new or expanded manufacturing operation;

(3) "installation service" means a service required to install and make operational manufacturing equipment necessary to conduct a manufacturing operation; and

(4) "manufacturing operation" means a plant employing personnel to perform production or assembly tasks to produce goods.

F. Election by a taxpayer to deliver the nontaxable transaction certificate necessary to support a deduction for receipts from the sale of manufacturing 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, 1999.