Sales Tax Updates in New Mexico

Tax Professionals' Resource
January 28, 2013 — 1,508 views  
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Following are the latest sales tax updates for New Mexico:

Attorney General Opinion on SSTP Plan

New Mexico Attorney General Gary King recently ruled that a section of the Streamlined Sales and Use Tax Agreement would be in direct conflict with the New Mexico Constitution. First, the granting of amnesty for unpaid sales and use taxes would violate New Mexico's anti-donation clause. This amnesty provision would also violate certain other constitutional articles that prohibit the release of obligations owed to the state.

Gross Receipts Tax for Non-athletic Events

The deduction from gross receipts tax for admission receipts to special non-athletic events has been extended. This provision had been set to expire on June 30, 2012 and has now been extended until June 30, 2017.

Compensating Tax

A new law has expanded the compensating tax to include the conversion of electricity. Two new sections have been added to the Gross Receipts and Compensating Tax Act. They now provide deductions of receipts from the transmission source and deductions of receipts from an operating market or exchange.

Local Option of Gross Receipts Taxes

A new law has been created that allows municipal adoption of a new federal water project receipts tax. This local tax will need voter approval, and the rate cannot exceed one-quarter percent. Any revenue from this local tax option is to be earmarked only for repayment of federal loan obligations for operation, construction and expansion of water delivery systems. Any municipality that considers this tax must have between 20,000 and 25,000 residents.

County Education Gross Receipts Tax

Under this law, a county that has previously levied a county education receipts tax can easily re-impose it upon expiration of the statute. This law was enacted to primarily benefit Taos County.

Gross Receipts Tax for Uranium Hexafluoride

This law merely changes an existing deduction for the receipts from the sale of this radioactive substance.

Construction Service Gross Receipts Tax

A section of the 1978 version of the NMSA was expanded and amended to allow for gross receipts for the sales of tangible manufacturer's property to include property that was actually consumed in the manufacturing process. The definition of construction service was also expanded so that a deduction for amounts due to the lease of construction equipment is now possible. This law also increased the amounts for distribution to the Small Counties Assistance Fund. This amount has climbed to 15 percent of compensating net receipts.


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