Current through Register Vol. 35, No. 18, September 24, 2024
A.
Lease purchase agreement as a
sale: The receipts from a two party "lease-purchase" or "paid-out lease"
agreement for tangible personal property will be treated as receipts from the
sale of tangible personal property under the Gross Receipts and Compensating
Tax Act if the lessee-buyer treats the property as an asset and depreciates the
property pursuant to generally accepted accounting practices.
B.
Consignment sales: Receipts
of both a consignor and a consignee from the sale of tangible personal property
handled on consignment are subject to the gross receipts tax.
C.
Delivery expenses:
(1) Receipts from charges by a seller of
tangible personal property for delivery costs, including postage and
transportation charges, paid by the seller and passed on to the buyer, are an
element of the sales price of the property.
(2)
Example: X sells
tangible personal property in the state of New Mexico and transports property
to buyers located in New Mexico in its own equipment from its factory and
warehouse. In some instances the contracts of sale which X has with its buyers
stipulate that title passes on completion of manufacturing; in other cases
there is no stipulation regarding passage of title. On its billing to buyers, X
separately states amounts categorized as "warehouse charges" and "delivery
charges". These separately stated charges are elements of the sale price of the
property.
D.
Freight charges:
(1)
Transportation costs that are paid by the seller to the carrier are an element
of the sales price of the property.
(2) Transportation costs that are paid to the
carrier by the buyer are not an element of the sales price of the property. If
the buyer transports the property with the buyer's own equipment, the cost of
the transportation does not increase the value of the property.
(3) If the seller transports the property
with its own equipment, and the cost of the transportation is already included
in the price of the property, it is considered as an element of the sales price
of the property. If extra separate charges are made, receipts from such charges
are gross receipts.
E.
Refundable deposits: Amounts received in the form of refundable
deposits on bottles, cartons, cases and the like are to be included in gross
receipts of the seller or lessor and are subject to the gross receipts
tax.
F.
Buyer's financing
costs: In a situation where:
(1) a
lending institution lends money directly to a buyer of tangible personal
property;
(2) the buyer executes a
promissory or installment note together with a security agreement or a retail
financing agreement directly to the lending institution;
(3) neither the note nor the agreement is
endorsed or guaranteed in any manner by the seller of the property;
and
(4) the lending institution as
agent for the buyer, pays the seller by crediting the account of the seller
with an amount equal to the loan against the property, with no amount added or
later rebated, the receipts of the seller from the sale of the property include
any down payment and the amount credited to the account of the seller unless
that amount is less than the fair market value of the property sold, in which
case the fair market value would be the measure of the seller's gross
receipts.
G.
Sale
of items subject to the state Cigarette Tax Act: The gross receipts from
sales of cigarettes include the total amount of money or the value of other
consideration received even though this amount includes the excise tax levied
by the Cigarette Tax Act.
H.
Florist receipts: Receipts of a New Mexico florist are gross
receipts when the florist:
(1) receives an
order and payment for flowers under an agreement that the flowers are to be
delivered at another location by another florist; and
(2) uses long distance communication to
authorize the other florist to make delivery; and
(3) pays the other florist for the
flowers.
I.
Sale of
food and beverage at horse racetracks: Receipts from the sale of food
and beverage either by a concessionaire or the owner of a New Mexico horse
racetrack, including the track at the state fair grounds, are subject to the
gross receipts tax. If a concessionaire pays a racetrack owner a consideration
for operating a food and beverage concession, the racetrack owner's receipts
are subject to the gross receipts tax.
J.
Packaged software:
(1) The transaction constitutes a sale of
tangible personal property or a digital good, as defined by
3.2.1.7 NMAC when a
person sells a packaged software where:
(a) no
extraordinary services are performed in order to furnish the packaged software;
and
(b) the buyer pays a fixed
amount for the packaged software and the license to use the software;
and
(c) the buyer is allowed to
resell the license to use the software with the packaged software
itself.
(2) Sale of such
property for resale is subject to the deduction provided in Section
7-9-47
NMSA 1978.
(3) This version of
Subsection J of Section 3.2.1.15 NMAC is retroactively applicable to
transactions occurring on or after July 1, 1991.
K.
Sale of postage stamps:
(1) Receipts in excess of the face value of
the postage stamps from reselling un-canceled postage stamps issued by the
United States postal service or any foreign government are gross receipts.
Receipts in excess of the face value of the postage from imprinting,
mechanically or by other means, the amount of postage on documents to be mailed
are gross receipts.
(2) Receipts
from selling canceled postage stamps issued by the United States postal service
or any foreign government are gross receipts.
L.
Refined metals: The receipts
of a person who sells refined metals in New Mexico are gross receipts subject
to the gross receipts tax regardless of whether the seller is a severer or
processor as defined in the Resources Excise Tax Act or the Severance Tax
Act.
