(A) In computing the municipal gross receipts tax due, only the receipts specified in divisions (B)(2) through (31) below of the Municipal Gross Receipts Tax Ordinance may be deducted.
(B) Receipts, whether specified once or several times in divisions (B)(1) through (31) below, may be deducted only once from gross receipts.
(1) Sales to manufacturers. Receipts from selling tangible personal property may be deducted from gross receipts if the sale is made to a person engaged in the business of manufacturing who delivers a nontaxable transaction certificate to the seller. The buyer delivering the nontaxable transaction certificate must incorporate the tangible personal property as an ingredient or component part of the product which he or she is in the business of manufacturing.
(2) Sale of tangible personal property for resale. Receipts from selling tangible personal property may be deducted from gross receipts if the sale is made to a person who delivers a nontaxable transaction certificate to the seller. The buyer delivering the nontaxable transaction certificate must resell the tangible personal property either by itself or in combination with other tangible personal property in the ordinary course of business.
(3) Sale of a service for resale. Receipts from selling a service for resale may be deducted from gross receipts if the sale is made to a person who delivers a nontaxable transaction certificate. The buyer delivering the nontaxable transaction certificate must separately state the value of the service purchased in his or her charge for the service on its subsequent sale, and the subsequent sale must be in the ordinary course of business and subject to the municipal gross receipts tax.
(4) Sale of tangible personal property for leasing. Receipts from selling tangible personal property, other than furniture or appliances, the receipts from the rental or lease of which are deductible under division (B)(8)(c) below and other than MOBILE HOMES as defined in NMSA § 64-1-8, may be deducted from gross receipts if the sale is made to a person who delivers a nontaxable transaction certificate to the seller. The buyer delivering the nontaxable transaction certificate must be engaged in a business which derives a substantial portion of its receipts from leasing or selling tangible personal property of the type leased. The buyer may not utilize the tangible personal property in any manner other than holding it for lease or sale, or leasing or selling it either by itself or in combination with other tangible personal property in the ordinary course of business.
(5) Lease for subsequent lease. Receipts from leasing tangible personal property, other than furniture or appliances the receipts from the rental or lease of which are deductible under division (B)(8)(c) below and other than MOBILE HOMES, as defined in NMSA § 64-1-8, may be deducted from gross receipts if the lease is made to a lessee who delivers a nontaxable transaction certificate to the lessor. The lessee delivering the nontaxable transaction certificate may not use the tangible personal property in any manner other than for subsequent lease in the ordinary course of business.
(6) Sale of tangible personal property to persons engaged in the construction business. Receipts from selling tangible personal property 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 seller. The buyer delivering the nontaxable transaction certificate must incorporate the tangible personal property as:
(a) An ingredient or component part of a construction project which is subject to the municipal gross receipts tax upon its completion or upon the completion of the overall construction project of which it is a part; or
(b) An ingredient or component part of a construction project which is subject to the municipal gross receipts tax upon the sale in the ordinary course of business of the real property upon which it was constructed.
(7) Sale of construction services to persons engaged in the construction business. 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. The buyer delivering the nontaxable transaction certificate must have the construction services performed upon:
(a) A construction project which is subject to the municipal gross receipts tax upon its completion of the overall construction project of which it is a part; or
(b) A construction project which is subject to the municipal gross receipts tax upon the sale in the ordinary course of business of the real property upon which it was constructed.
(8) State of lease of real property and lease of mobile homes.
(a) Receipts from the sale or lease of real property, and from the lease of a MOBILE HOME as defined in NMSA § 64-1-8, and as provided in division (B)(8)(b) below, other than receipts from the sale or lease of oil, natural gas or mineral interests exempted by § 35.057(B)(14), may be deducted from gross receipts. However, that portion of the receipts from the sale of real property which is attributable to improvements constructed on the real property by the seller in the ordinary course of his or her construction business may not be deducted from gross receipts.
(b) Receipts received by hotels, motels, rooming houses, campgrounds, guest ranches, trailer parks or similar facilities, except receipts received by trailer parks from the rental of a space or a mobile home for a period of at least 1 month, from lodgers, guests, roomers or occupants are not receipts from leasing real property for the purposes of this section.
(c) Receipts attributable to the inclusion of furniture or appliances furnished as part of a leased or rented dwelling house, MOBILE HOMES defined in NMSA § 64-1-8, or apartment by the landlord or lessor may be deducted from gross receipts.
(9) Sales to governmental agencies. Receipts from selling tangible personal property, other than nonfissionable metalliferous mineral ore, to the United States or any agency or instrumentality thereof, the state of New Mexico or any political subdivision thereof may be deducted from gross receipts. Receipts from selling tangible personal property, other than nonfissionable metalliferous mineral ore, to the governing body of an Indian tribe or Indian Pueblo for use on Indian reservations or Pueblo grants, may be deducted from gross receipts. That portion of the receipts from performing a SERVICE as defined in § 35.052 which reflects the value of tangible personal property utilized or produced in performance of the service is not deductible.
(10) Transactions in interstate commerce. Receipts from transactions in interstate commerce may be deducted from gross receipts to the extent that the imposition of the municipal gross receipts tax would be unlawful under the United States Constitution.
(11) Intrastate transportation and services in interstate commerce. Receipts from transporting persons or property from 1 point to another in this state may be deducted from gross receipts when the persons or property, including any special or extra service reasonably necessary in connection therewith, are being transported in interstate or foreign commerce under a single contract. Receipts from handling, storage, drayage or packing of property or any other accessorial services on property, which property has moved or will move in interstate or foreign commerce, when the services are performed by a local agent for a carrier or a carrier, and when the services are performed under a single contract in relation to transportation services, may be deducted from gross receipts.
(12) Sale of certain services to out-of-state buyers.
(a) Receipts from performing a service, other than a legal, accounting or architectural service, may be deducted from gross receipts if the sale of the service is made to a buyer who delivers to the seller either a nontaxable transaction certificate or other evidence acceptable to the Commissioner that the transaction does not contravene the conditions set out in division (B)(3) above.
(b) The buyer delivering the nontaxable transaction certificate or other evidence acceptable to the Commissioner must not contravene the conditions set out in division (B)(3) above:
(c) Receipts from performance of a service shall not be subject to the deduction provided in this section if the buyer of the service, any of his or her employees or any person in privity with him or her:
1. Makes initial use of the product of the service in New Mexico;
2. Takes delivery of the product of the service in New Mexico; or
3. Concurrent with the performance of the service, has a regular place of work in New Mexico or spends more than brief and occasional periods of time in New Mexico and:
a. Has any communication in New Mexico related in any way to the subject matter, performance or administration of the service, with the person performing the service; or
b. Himself or herself performs work in New Mexico related to the subject matter of the service.
(13) Feed and fertilizers. Receipts from selling feed for livestock, fish raised for human consumption, poultry or for animals raised for their hides or pelts, seeds, roots, bulbs, plants, soil conditioners, fertilizers, insecticides, fungicides or herbicides or water for irrigation purposes may be deducted from gross receipts if the sale is made to a person who states in writing that he or she is regularly engaged in the business of farming, ranching or the raising of animals for their hides or pelts. Receipts of auctioneers from selling livestock or other agricultural products at auction may also be deducted from gross receipts.
(14) Warehousing, threshing, harvesting, growing, cultivating and processing agricultural products.
(a) Receipts from warehousing grain or other agricultural products may be deducted from gross receipts.
(b) Receipts from threshing, cleaning, growing, cultivating or harvesting agricultural products, including the ginning of cotton or processing for growing producers or nonprofit marketing associations of other agricultural products raised for food and fiber, including livestock, may be deducted from gross receipts.
(15) Sales to certain organizations. Receipts from selling tangible personal property, other than metalliferous mineral ore, to organizations that have been granted exemption from the federal income tax by the United States Commissioner of Internal Revenue as organizations described in § 501(c)(3) of the United States Internal Revenue Code of 1954, being 26 U.S.C. §§ 1 et seq., as amended or renumbered, may be deducted from gross receipts if the sale is made to an organization that delivers a nontaxable transaction certificate to the seller. The buyer delivering the nontaxable transaction certificate must employ the tangible personal property in the conduct of an unrelated trade or business as defined in § 513 of the United States Internal Revenue Code of 1954, being 26 U.S.C. §§ 1 et seq., as amended or renumbered. Receipts from selling tangible personal property that will become an ingredient or component part of a construction project are not receipts from selling tangible personal property for purposes of this section.
(16) Sales to banks and financial corporations. Receipts from selling tangible personal property, other than metalliferous mineral ore, to banks and financial corporations who employ the tangible personal property in their regular banking and financial corporation functions may be deducted from gross receipts.
(17) Agricultural implements, aircraft vehicles that are not required to be registered. Fifty percent of the receipts from selling agricultural implements, farm tractors, aircraft or vehicles that are not required to be registered under the Motor Vehicle Code, NMSA §§ 64-1-1 to 64-5-4, may be deducted from gross receipts. Any deduction allowed under division (B)(26) below must be taken before the deduction allowed by this section is computed.
(18) Publication sales. Receipts from publishing newspapers or magazines, except from selling advertising space, may be deducted from gross receipts. Receipts from selling magazines at retail may not be deducted from gross receipts.
(19) Newspaper sales. Receipts from selling newspapers, except from selling advertising space, may be deducted from gross receipts.
(20) Chemicals and reagents. Receipts from selling chemicals or reagents to any mining, milling or oil company for use in processing ores or oil in a mill, smelter or refinery or in acidizing oil wells and receipts from selling chemicals or reagents in lots in excess of 18 tons may be deducted from gross receipts. Receipts from selling explosives, blasting powder or dynamite may not be deducted from gross receipts.
(21) Commissions. Receipts derived from commissions on sales of tangible personal property which are not subject to the municipal gross receipts tax may be deducted from gross receipts.
(22) Refunds and uncollectible debts. Refunds and allowances made to buyers or amounts written off the books as an uncollectible debt by a person reporting municipal gross receipts tax on an accrual basis may be deducted from gross receipts. If debts reported uncollectible are subsequently collected, the receipts shall be included in gross receipts in the month of collection.
(23) Warranty obligations. Receipts of a dealer from furnishing goods or services to the purchaser of tangible personal property to fulfill a warranty obligation of the manufacturer of the property may be deducted from gross receipts.
(24) Administrative and accounting services. Receipts of a corporation for administrative and accounting services performed by it for a wholly-owned subsidiary corporation upon a nonprofit or cost basis, and receipts from a wholly-owned subsidiary for the joint use or sharing of office machines and facilities upon a nonprofit or cost basis, may be deducted from gross receipts.
(25) Rental or lease of vehicles used in interstate commerce. Receipts from the rental or leasing of vehicles used in the transportation of passengers or property for hire in interstate commerce under the regulations or authorization of any agency of the United States may be deducted.
(26) Trade-in allowance. That portion of the receipts of a seller that is represented by a trade-in of tangible personal property of the same type being sold may be deducted from gross receipts.
(27) Special fuel. Receipts from the sale of special fuel, as defined in NMSA § 7-16A(O), may be deducted from gross receipts if the purchaser is a bonded special fuel user under NMSA § 7-16A-1 et seq. who delivers a nontaxable transaction certificate to the seller.
(28) Sale of prosthetic devices. Receipts from selling prosthetic devices may be deducted from gross receipts if the sale is made to a person who is licensed to practice medicine, osteopathy, dentistry, podiatry, optometry, chiropractic or professional nursing and who delivers a nontaxable transaction certificate to the seller. The buyer delivering the nontaxable transaction certificate must deliver the prosthetic device incidental to the performance of a service and must include the value of the prosthetic device in his or her charge for the service.
(29) Sale of property used in the manufacture of jewelry. Receipts from selling tangible personal property may be deducted from gross receipts if the sale is made to a person who states in writing that he or she will use the property so purchased in manufacturing jewelry. The buyer must incorporate the tangible personal property as an ingredient or component part of the jewelry that he or she is in the business of manufacturing. The deduction allowed a seller under this section shall not exceed the sum of $1,000 during any 12-month period attributable to purchases by a single purchaser.
(30) State of certain services performed directly on product manufactured. Receipts from selling the service of combining or processing components or materials may be deducted from gross receipts if the sale is made to a person engaged in the business of manufacturing who delivers a nontaxable transaction certificate to the seller. The buyer delivering the nontaxable transaction certificate must have the service performed directly upon tangible personal property which he or she is in the business of manufacturing or upon ingredients or component parts thereof.
(31) Travel agent’s commissions paid by certain entities. Receipts of travel agents derived from commissions paid by maritime transportation companies and interstate airlines, railroads and passenger buses for booking, referral, reservation or ticket services, may be deducted from gross receipts.
(Ord. 499, passed 5-3-1976; Am. Ord. 502, passed 8-9-1976; Am. Ord. 512, passed 8-28-1978)