New Mexico Administrative Code
Title 3 - TAXATION
Chapter 2 - GROSS RECEIPTS TAXES
Part 20 - GOVERNMENTAL GROSS RECEIPTS
Section 3.2.20.16 - RECEIPTS FROM LEASING

A. Receipts of any agency, institution, instrumentality or political subdivision of the state of New Mexico from leasing real property or tangible personal property are not receipts from a taxable activity.

B. Example 1: Municipality X, under an industrial development project agreement with Company A, has arranged for the construction and equipping of a factory which it leases to Company A. The lease sets a monthly fee sufficient to cover the repayment of bonds issued by the municipality which provided the funds for the construction and equipping of the factory. At the end of the lease period, Company A may buy the factory and its equipment for a stated sum. The monthly receipts of the municipality from the lease are not governmental gross receipts but its receipts from the sale of the project's tangible personal property at the end of the lease are governmental gross receipts.

C. Example 2: Municipality B owns a baseball stadium which it leases to a professional team on a long-term basis for the team's use as its home park for specified portions of each year covered by the lease. B receives a fixed annual fee plus a percentage of gate receipts as well as a percentage of income from certain concessions. As part of the lease agreement, the team also agrees to perform certain maintenance functions and to construct some improvements to the stadium. The monetary and other consideration given B are receipts from leasing real property and are not governmental gross receipts.

D. The receipts of any agency, institution, instrumentality or political subdivision of the state of New Mexico from the sale of season passes or season tickets to recreational, entertainment or athletic events in facilities open to the general public are receipts from admissions and not from leasing. Such receipts are governmental gross receipts.