New Mexico Administrative Code
Title 3 - TAXATION
Chapter 2 - GROSS RECEIPTS TAXES
Part 221 - DEDUCTION - GROSS RECEIPTS TAX - PUBLICATION SALES
Section 3.2.221.9 - GENERAL EXAMPLES
Current through Register Vol. 35, No. 18, September 24, 2024
A. A person engaged in the business of publishing magazines or newspapers in New Mexico can deduct the receipts from selling the published product to others for subsequent resale under Section 7-9-63 NMSA 1978. The publisher is not required to obtain a nontaxable transaction certificate from the purchaser for purposes of Section 7-9-63 NMSA 1978. The receipts of the publisher from the sale of advertising space and the receipts from selling magazines at retail are not deductible from the publisher's gross receipts.
B. Example 1: M is in the business of publishing a magazine. It compiles the stories and pictures. It then takes this material to E who prints the magazines and sells them to M for resale. E is classified as a manufacturer. As such, E may give nontaxable transaction certificates (nttcs) to vendors of paper and ink. E can then accept nttcs from the publisher for the sale of the magazine for resale. M is the publisher of the magazine and is liable for gross receipts tax. If M sells the magazine to news shops or other outlets for resale, M includes in gross receipts only those amounts that M receives from the sale of advertising space. If M also sells the magazine at retail to consumers, however, M would be liable for the gross receipts tax on the receipts derived from the sale of the magazine other than for resale as well as on receipts from the sale of advertising space.
C. Example 2: X, a newspaper, sells space in its newspaper for obituaries. It claims a deduction for these sales under Section 7-9-63 NMSA 1978. These receipts are not deductible because they are receipts from selling advertising space. However, if the space is sold to a person, such as a funeral home, who resells the space and gives X an nttc, X's receipts from the sale to such a person are deductible. This version of Subsection C of Section 3.2.221.9 NMAC applies to transactions occurring on or after July 1, 2000.
