New Mexico Administrative Code
Title 3 - TAXATION
Chapter 2 - GROSS RECEIPTS TAXES
Part 206 - DEDUCTION - GROSS RECEIPTS TAX - SALE OF A SERVICE FOR RESALE
Section 3.2.206.10 - INSTALLATION SERVICE

A. Receipts from selling an installation service for resale may be deducted from gross receipts if the buyer of the service delivers a nontaxable transaction certificate (nttc) to the seller. The sale of the installation service by the buyer must be in the ordinary course of business and be subject to the gross receipts tax or the buyer will be subject to the compensating tax.

B. Example: W manufactures computers; however, because of the small size of the company W does not employ the proper personnel for installing the computers. Upon making a sale to S, W hired G to install the computers. The receipts G derived from installing the computers for W may be deducted from gross receipts pursuant to Section 7-9-48 NMAC 1978 if W delivers an nttc to G. The sale of the installation service by W must be in the ordinary course of business and subject to the gross receipts tax or W will be subject to the compensating tax. Note: If the installation service performed in a particular situation is determined by the department to be incidental to the sale of a tangible, then, even if the value of the installation service is separately stated from the value of the tangible personal property sold on the final billing to the buyer of the tangible personal property, all the receipts of the seller will be treated as receipts from the sale of tangible personal property.

C. This version of 3.2.206.10 NMAC applies to transactions occurring on or after July 1, 2000.