New Mexico Administrative Code
Title 3 - TAXATION
Chapter 2 - GROSS RECEIPTS TAXES
Part 10 - IMPOSITION AND RATE OF TAX - DENOMINATION AS "COMPENSATING TAX"
Section 3.2.10.16 - ORDINARY AND NECESSARY BUSINESS EXPENSE

Services performed in New Mexico deductible by the purchaser as ordinary and necessary business expenses under the provisions of the Internal Revenue Code are "used" for purposes of Subsection B of Section 7-9-7 NMSA 1978. Nontaxable transaction certificates may not be issued for such transactions. If a taxpayer acquires the services through the inappropriate use of a nontaxable transaction certificate, the compensating tax is due on the value of the services and the taxpayer's right to issue nontaxable transaction certificates will be jeopardized under the provisions of Section 7-9-44 NMSA 1978.