New Mexico Administrative Code
Title 3 - TAXATION
Chapter 2 - GROSS RECEIPTS TAXES
Part 115 - EXEMPTION - COMPENSATING TAX - PERSONAL EFFECTS
Section 3.2.115.8 - BUSINESS USE OF PROPERTY
Universal Citation: 3 NM Admin Code 3.2.115.8
Current through Register Vol. 35, No. 18, September 24, 2024
A. The provisions of Section 7-9-27 NMSA 1978 do not apply to property used in connection with the engaging in business in New Mexico. The use of property for business purposes in New Mexico is not exempt from the imposition of the compensating tax.
B. The following examples illustrate the application of Section 7-9-27 NMSA 1978.
(1) Example 1: A, a Colorado
corporation, drills oil wells on contract. A moves a rig out of Colorado into
New Mexico and sets it up at the well site. A maintains that no compensating
tax is due on the value of the rig since A will only be in the state until the
one contract is completed. A must report compensating tax measured by the value
of the rig. The rig has been brought into New Mexico for business use. If A had
leased the rig from a lessor in Colorado, and a substantial portion of the
lessor's receipts were derived from leasing, no compensating tax would be
imposed on A. However, the receipts of the lessor would be subject to the gross
receipts tax.
(2) Example 2: X, a
nonresident, obtains a nonresident hunting license for New Mexico. X brings
guns and camping gear to New Mexico for the hunt. The use of this equipment is
exempt from the compensating tax.
Disclaimer: These regulations may not be the most recent version. New Mexico may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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