NMSA 1978, § 7-9-54 — 7-9-54

Deduction; gross receipts tax; governmental gross receipts
tax; sales to governmental agencies.

# A.

Receipts from selling tangible personal property, or from selling licenses to use
digital goods for the purpose of loaning those digital goods to the public, to the United
States or to New Mexico or a governmental unit, subdivision, agency, department or
instrumentality thereof may be deducted from gross receipts or from governmental
gross receipts. Unless contrary to federal law, the deduction provided by this
subsection does not apply to:
(1) receipts from selling metalliferous mineral ore;
(2) receipts from selling tangible personal property that is or will be
incorporated into a metropolitan redevelopment project created under the Metropolitan
Redevelopment Code;
(3) receipts from selling construction material, excluding tangible personal
property, whether removable or non-removable, that is or would be classified for
depreciation purposes as three-year property, five-year property, seven-year property or
ten-year property, including indirect costs related to the asset basis, by Section 168 of
the Internal Revenue Code of 1986, as that section may be amended or renumbered; or
(4) that portion of the receipts from performing a "service" that reflects the
value of tangible personal property utilized or produced in performance of such service.

# B.

Receipts from selling tangible personal property, or from selling licenses to use
digital goods for the purpose of loaning those digital goods to the public, for any
purpose to an Indian tribe, nation or pueblo or a governmental unit, subdivision, agency,
department or instrumentality thereof for use on Indian reservations or pueblo grants
may be deducted from gross receipts or from governmental gross receipts.

# C.

When a seller, in good faith, deducts receipts for tangible personal property or
licenses to use digital goods for the purpose of loaning those digital goods to the public
sold to the state or a governmental unit, subdivision, agency, department or
instrumentality thereof, after receiving written assurances from the buyer's
representative that the property sold is not construction material, the department shall
not assert in a later assessment or audit of the seller that the receipts are not deductible
pursuant to Paragraph (3) of Subsection A of this section.