2019 New Mexico Statutes
Chapter 7 - Taxation
Article 9 - Gross Receipts and Compensating Tax
Section 7-9-55 - Deduction; gross receipts tax; governmental gross receipts tax; transaction in interstate commerce.

A. Receipts from transactions in interstate commerce may be deducted from gross receipts to the extent that the imposition of the gross receipts tax would be unlawful under the United States constitution.

B. Receipts from transactions in interstate commerce may be deducted from governmental gross receipts.

C. Receipts from transmitting messages or conversations by radio other than from one point in this state to another point in this state and receipts from the sale of radio or television broadcast time when the advertising message is supplied by or on behalf of a national or regional seller or advertiser not having its principal place of business in or being incorporated under the laws of this state, may be deducted from gross receipts. Commissions of advertising agencies from performing services in this state may not be deducted from gross receipts under this section.

History: 1953 Comp., § 72-16A-14.10, enacted by Laws 1969, ch. 144, § 45; Laws 1986, ch. 20, § 65; Laws 1986, ch. 52, § 2; 1993, ch. 31, § 12.

Repeals. — Laws 1988, ch. 19, § 5, effective July 1, 1988, repealed Laws 1986, ch. 20, § 129 and Laws 1986, ch. 52, § 5, which amended versions of this section which were to take effect July 1, 1988.

Laws 1988, ch. 19, § 2 repealed and reenacted 7-9-55 NMSA 1978 as amended by Laws 1986, ch. 20, § 65 and Laws 1986, ch. 52, § 2, effective July 1, 1990; however, Laws 1990, ch. 27, § 2A repealed Laws 1988, ch. 19, § 2, effective May 16, 1990.

The 1993 amendment, effective July 1, 1993, inserted "governmental gross receipts tax" in the section heading; inserted the subsection designations A and C; and added Subsection B.

Constitutionality. — The New Mexico gross receipts tax did not violate the commerce clause of the United States constitution, as applied to a California corporation which owned and operated a food and restaurant supply business with a warehouse located in Texas, and which sold food and other restaurant supplies to restaurants for use in New Mexico by obtaining orders for deliveries by telephoning the restaurants and taking down the orders over the phone, then delivering the goods in its own trucks from its warehouse in Texas to the restaurants in New Mexico. Proficient Food Co. v. N.M. Taxation & Revenue Dep't, 1988-NMCA-042, 107 N.M. 392, 758 P.2d 806, cert. denied, 107 N.M. 308, 756 P.2d 1203.

All interstate commerce is not per se immune from taxation. Spillers v. Commissioner of Revenue, 1970-NMCA-097, 82 N.M. 41, 475 P.2d 41, cert. denied, 82 N.M. 81, 475 P.2d 778.

Scope of deduction. — This section permits deduction from gross receipts to the extent that the imposition of gross receipts tax would be unlawful under the United States constitution. If imposition of the tax upon the particular gross receipts is constitutionally lawful then such receipts are not deductible hereunder. Spillers v. Commissioner of Revenue, 1970-NMCA-097, 82 N.M. 41, 475 P.2d 41, cert. denied, 82 N.M. 81, 475 P.2d 778.

Federal law does not preempt tax assessed on receipts from transportation of railroad crew members within the state. — Where plaintiff contracted with union pacific railroad and burlington northern Santa Fe railroad to transport railroad employees to and from railroad trains both within New Mexico and from New Mexico to another state, and where the New Mexico taxation and revenue department (department), after an audit, assessed plaintiff for gross receipts on the revenues from plaintiff's service between locations within New Mexico, and where plaintiff filed a complaint for tax refund claiming that federal law preempts the department from imposing gross receipts tax on the transportation of passengers traveling in interstate commerce by motor carrier, the district court did not err in granting the department's motion for summary judgment, because Congress, in passing 49 U.S.C. §14505, intended to address passengers of a motor carrier who were traveling as passengers in interstate commerce, and plaintiff's transportation of railroad crew members is not part of ticketed travel between states and thus the railroad crew members were not passengers traveling in interstate commerce traveling by motor carrier. Renzenberger, Inc. v. N.M. Taxation & Revenue Dep't, 2018-NMCA-010, cert. denied.

Immunity from undue burdens. — To attain immunity a showing must be made of multiple taxation or the lack of a local taxable incident. Such showing is essential to classify the tax as one unduly burdensome to interstate commerce. Spillers v. Commissioner of Revenue, 1970-NMCA-097, 82 N.M. 41, 475 P.2d 41, cert. denied, 82 N.M. 81, 475 P.2d 778.

Multiple taxation. — If compensation received under advertising contracts is not protected by the commerce clause, then multiple taxation of the receipts would not bring them within such protection. N.M. Newspapers, Inc. v. Bureau of Revenue, 1971-NMCA-022, 82 N.M. 436, 483 P.2d 317.

Classification pursuant to constitutional mandate not violative of equal protection. — Granting a deduction, whether in accordance with statute or administrative regulations, of gross receipts which are not taxable by the state under the commerce clause, and denying such deduction with respect to receipts which are subject to state taxation, although the receipts in each instance are produced by comparable activities, is a reasonable and proper basis for classification. N.M. Newspapers, Inc. v. Bureau of Revenue, 1971-NMCA-022, 82 N.M. 436, 483 P.2d 317.

Equal protection. — Imposition of tax upon receipts derived by newspaper from advertising, while receipts of radio and television broadcasters are not taxed, does not constitute arbitrary and discriminatory treatment or classification in violation of the equal protection clauses of the federal and state constitutions. N.M. Newspapers, Inc. v. Bureau of Revenue, 1971-NMCA-022, 82 N.M. 436, 483 P.2d 317.

Educational materials. — Tax levied on gross receipts from out-of-state sales of tangible personal property in the nature of reproducible educational materials is an impermissible burden on commerce. Evco v. Jones, 409 U.S. 91, 93 S. Ct. 349, 34 L. Ed. 2d 325 (1972).

Interstate telegraph messages. — Employee who transmitted telegraph messages both interstate and intrastate is allowed to deduct receipts derived from interstate messages from gross receipts under this section. Ealey v. Bureau of Revenue, 1976-NMSC-010, 89 N.M. 160, 548 P.2d 440.

Access charges and telephone carriers. — Since the access charge is for the service of transmitting the telephone signal between the inter-local access and transport areas carrier's switching center and the local phone customer, such taxation of access charge receipts is barred by this section. GTE Sw., Inc. v. Taxation & Revenue Dep't, 1992-NMCA-024, 113 N.M. 610, 830 P.2d 162, cert. denied, 113 N.M. 605, 830 P.2d 157.

Ancillary services and telephone carriers. — Gross receipts tax imposed on receipts for ancillary services performed for interstate carriers is proper even though these services are related to the provision of interstate telephone service; the receipts are not receipts from transmitting messages or conversations by telephone. GTE Sw., Inc. v. Taxation & Revenue Dep't, 1992-NMCA-024, 113 N.M. 610, 830 P.2d 162, cert. denied, 113 N.M. 605, 830 P.2d 157.

Newspaper advertising. — Assessment of gross receipts tax against receipts of taxpayer derived from out-of-state advertising published in its newspaper was not violative of the commerce clause. N.M. Newspapers, Inc. v. Bureau of Revenue, 1971-NMCA-022, 82 N.M. 436, 483 P.2d 317.

Commissions for booking transportation services. — Imposition of gross receipts tax upon commissions paid to a resident agent of an interstate carrier of household goods for initiating or booking interstate transportation of such goods does not violate the federal constitution, and consequently such receipts are not properly deductible. Spillers v. Commissioner of Revenue, 1970-NMCA-097, 82 N.M. 41, 475 P.2d 41, cert. denied, 82 N.M. 81, 475 P.2d 778.

Burden on taxpayer. — Even if multiple taxation could be treated as invoking the protection of the commerce clause, the taxpayer, nevertheless, would have the burden of establishing his right to immunity from taxation. N.M. Newspapers, Inc. v. Bureau of Revenue, 1971-NMCA-022,82 N.M. 436, 483 P.2d 317.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 68 Am. Jur. 2d Sales and Use Taxes §§ 35 et seq.