New Mexico Administrative Code
Title 3 - TAXATION
Chapter 2 - GROSS RECEIPTS TAXES
Part 212 - IMPOSITION AND RATE OF GOVERNMENTAL GROSS RECEIPTS TAX
Section 3.2.212.24 - CUSTOM SOFTWARE
Current through Register Vol. 35, No. 18, September 24, 2024
A. Because it is a service, receipts from developing or selling custom software for governmental entities are not deductible under Section 7 9 54 NMSA 1978.
B. Example 1: X contracts with the United States to develop software to test certain devices which the United States is considering purchasing. X is performing a service under this contract.
C. Example 2: Same facts as in Example 1 except that X is to modify an existing software test program. X is nonetheless performing a service under the contract.
D. Example 3: X enters into a qualifying research and development contract with a signatory agency of the United States. The contract is to develop software to test certain devices which the United States is considering purchasing. X is performing a service under this contract. To create the testing program X buys several pieces of packaged software and develops new programming to interconnect the packaged software into a coherent testing program. X may execute, and the vendors may accept in good faith, Type 15 non-taxable transaction certificates or alternative evidence as provided by Section 7-9-43 NMSA 1978 for the purchase of the packaged software.
