New Mexico Administrative Code
Title 3 - TAXATION
Chapter 2 - GROSS RECEIPTS TAXES
Part 217 - DEDUCTION - GROSS RECEIPTS TAX - WAREHOUSING, THRESHING, HARVESTING, GROWING, CULTIVATING AND PROCESSING AGRICULTURAL PRODUCTS
Section 3.2.217.11 - HAULING OF AGRICULTURAL PRODUCTS
Current through Register Vol. 35, No. 18, September 24, 2024
A. The receipts from hauling agricultural products from point to point in New Mexico or from loading or unloading agricultural products in New Mexico are subject to the gross receipts tax. These receipts are derived from performing services in New Mexico and are not derived from warehousing, threshing or cleaning agricultural products within the meaning of Section 7-9-59 NMSA 1978.
B. Receipts from hauling agricultural products from point to point, however, does not include receipts from hauling which is an integral part of the harvesting process nor does it include transportation of milk from the place of production to a place of processing. Such receipts are deductible under Section 7-9-59 NMSA 1978.
C. Example 1: H is a commercial harvester of grain who owns combines and trucks. For consideration, H will contract with a farmer to harvest the farmer's grain. As part of the contract, H delivers the harvested grain from the farmer's land to an elevator owned by a third party. H's receipts from harvesting the farmer's grain is deductible under Section 7-9-59 NMSA 1978 but H's receipts from hauling the harvested grain to the elevator are not deductible.
D. Example 2: X is engaged in the business of transporting for farmers alfalfa hay from the field where the alfalfa is raised to the farmer's own storage facility. The distance from the field to the farmer's storage facility may be three or four miles. X's hauling is part of the harvesting process and X's receipts are deductible under Section 7-9-59 NMSA 1978.
E. Example 3: Y is engaged in the business of hauling potatoes from farms to the plant of a potato chip maker. Y picks up harvested potatoes from farmers' storage facilities and delivers them to the potato chip maker's receiving facility. Y's receipts from this activity are not deductible under Section 7-9-59 NMSA 1978.
F. Example 4: V, a labor contractor, negotiates an agreement with a farmer for the harvesting of onions. After the agreement is made V hires people to harvest the onions. Harvesting begins with pulling the onions out of the ground by hand and clipping off the roots and tops. The onions are put into buckets which are dumped into burlap sacks when full. The process continues with arranging the burlap sacks into straight rows in the field. The sacks are then loaded by a conveyor onto a truck, emptied, and the sacks tossed back to the ground. The onions are then delivered to the processing shed by the truck. V's receipts from these activities are deductible under Section 7-9-59 NMSA 1978.
