2019 New Mexico Statutes
Chapter 7 - Taxation
Article 9 - Gross Receipts and Compensating Tax
Section 7-9-52 - Deduction; gross receipts tax; sale of construction services and construction-related services to persons engaged in the construction business.
A. Receipts from selling a construction service or a construction-related 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 or a construction-related service.
B. The buyer delivering the nontaxable transaction certificate shall have the construction services or construction-related services directly contracted for or billed to:
(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-related 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-related regulations; but "construction-related service" excludes general business services such as legal or accounting services, equipment maintenance and real estate sales commissions.
History: 1953 Comp., § 72-16A-14.7, enacted by Laws 1969, ch. 144, § 42; 2000, ch. 84, § 4; 2000, ch. 98, § 2; 2012, ch. 5, § 5.
ANNOTATIONSThe 2012 amendment, effective January 1, 2013, provided a deduction for receipts from selling construction-related services; in the title, added "and construction-related services"; in Subsection A, after "selling a construction service", added "or a construction-related service" and after "performing the construction service", added "or a construction-related service"; in Subsection B, after "construction services", deleted "performed upon" and added the remainder of the sentence; and added Subsection C.
The 2000 amendment, effective March 7, 2000, added Subsection B(3).
Language of this section is definite and unambiguous. Miller v. Bureau of Revenue, 1979-NMCA-005, 93 N.M. 252, 599 P.2d 1049, cert. denied, 92 N.M. 532, 591 P.2d 286.
"Engaged in the construction business". — Since taxpayer constructed a hotel in this state, and taxpayer held a contractor's license and held itself out to the public as a contractor, there is sufficient evidence to conclude that taxpayer was "engaged in the construction business." Continental Inn of Albuquerque, Inc. v. N.M. Taxation & Revenue Dep't, 1992-NMCA-030, 113 N.M. 588, 829 P.2d 946.
Construction services exempt from tax. — A decision of the commissioner of the bureau of revenue (now secretary of the taxation and revenue department) denying the exemption of the sale of construction services from the gross receipts tax is contrary to the law of this state providing an exemption for construction services. Miller v. Bureau of Revenue, 1979-NMCA-005, 93 N.M. 252, 599 P.2d 1049, cert. denied, 92 N.M. 532, 591 P.2d 286.
Proper issuance of nontaxable transaction certificate. — The deduction from gross receipts pursuant to Section 7-9-51 NMSA 1978 and this section is not conditioned upon proper issuance of the nontaxable transaction certificates (NTTC) by the buyer. The determination of whether a NTTC has been properly issued is a matter between the department and the buyer. Continental Inn of Albuquerque, Inc. v. N.M. Taxation & Revenue Dep't, 1992-NMCA-030, 113 N.M. 588, 829 P.2d 946.
Message to seller that seller is entitled to deductions. — The timely delivery of a nontaxable transaction certificate (NTTC) from the buyer to the seller conveys a message to the seller that the use of the NTTC's is such that the seller is entitled to deductions under Section 7-9-51 NMSA 1978 or this section when taxpayer issued NTTC's to the subcontractors; taxpayer, in essence, represented to the subcontractors that the use of the NTTC's was such that the subcontractors were entitled to deductions from the gross receipts tax. Continental Inn of Albuquerque, Inc. v. N.M. Taxation & Revenue Dep't, 1992-NMCA-030, 113 N.M. 588, 829 P.2d 946.
