N.M. Stat. § 7-9-1 (2026)

Chapter 7, Article 9 NMSA 1978 may be cited as the "Gross Receipts and
Compensating Tax Act".

History: 1953 Comp., § 72-16A-1, enacted by Laws 1966, ch. 47, § 1; 1979, ch. 90, §
1.

                                    ANNOTATIONS

Cross references. — For the applicability of the Tax Administration Act, see 7-1-2
NMSA 1978.

For the duties with respect to taxation of successors in business, see 7-1-61 NMSA
1978 et seq.

For municipal local option gross receipts taxes generally, see 7-19D-1 NMSA 1978 et
seq.

For restrictions on municipal taxing power, see 3-18-2 NMSA 1978.

Contracts of sale or service subject to gross receipts tax. — Taxable incidents are
equally apparent and are ascertainable with equal ease whether they arise out of a
contract of sale or out of a contract for services, and therefore, equally subject to the
New Mexico gross receipts tax. Evco v. Jones, 1971-NMCA-123, 83 N.M. 110, 488 P.2d
1214, cert. denied, 83 N.M. 105, 488 P.2d 1209, rev'd on other grounds, 409 U.S. 91,
93 S. Ct. 349, 34 L. Ed. 2d 325 (1972) (decided under prior law).

Purchasers of property for lease but not lessees subject to gross receipts tax. —
Neither the gross receipts tax nor the compensating tax is payable under the law
applicable to this appeal by one who leased property for sublease in this state. Such
tax, however, is payable by one who has purchased property for lease in this state, thus
the legislature has made a distinction with respect to tax liability as between purchasers
and lessees. Rust Tractor Co. v. Bureau of Revenue, 1970-NMCA-107, 82 N.M. 82, 475
P.2d 779, cert. denied, 82 N.M. 81, 475 P.2d 778.

Gross receipts tax but not use tax applicable to Indians. — The exemption in § 5 of
the Indian Reorganization Act of 1934 (25 U.S.C. § 465) does not encompass or bar the
collection of the state's nondiscriminatory gross receipts tax pursuant to 72-16-1, 1953
Comp. (since repealed). Therefore, a tribal ski enterprise conducted by the tribe with
federal funds, on federal lands leased to them, was subject to that tax. However, a
compensating or use tax, 72-17-1, 1953 Comp. (since repealed), imposed on personalty
installed in ski lift construction was improper under § 5. Mescalero Apache Tribe v.
Jones, 411 U.S. 145, 93 S. Ct. 1267, 36 L. Ed. 2d 114 (1973) (decided under former
Section 72-17-1, 1953 Comp.).

Indian trader statutes. — The Indian trader statutes (25 U.S.C. §§ 261 to 264)
preempt the imposition of gross receipts tax of this Article on receipts for non-Indian
services rendered to an Indian tribal entity on the reservation. N.M. Taxation & Revenue
Dep't v. Laguna Indus., Inc., 1993-NMSC-025, 115 N.M. 553, 855 P.2d 127.

Lessee's activity on tax-exempt Indian land subject to gross receipts tax. Norvell
v. Sangre de Cristo Dev. Co., 372 F. Supp. 348 (D.N.M. 1974), rev'd on other grounds,
519 F.2d 370 (10th Cir. 1975).

Burden on taxpayer to show rate erroneous. — When government contractor
appeals the assessment of a gross receipts tax, penalty and interest, he has the burden
of showing the assessment at a higher tax rate established by the 1969 Gross Receipts
and Compensating Tax Act rather than a lower rate under a pre-1969 tax act was
erroneous. Martinez v. Jones, 1972-NMCA-054, 83 N.M. 722, 497 P.2d 233, cert.
denied, 83 N.M. 741, 497 P.2d 743.

Regulation attacked only if taxpayer's contract properly subject thereunder. —
When party, in addition to appealing the assessment of a gross receipts tax, penalty
and interest, is attacking validity of regulation governing registration of contracts for
purpose of determining gross receipts and compensating tax rate, and party neither
offers in evidence his contract with the state highway department, nor does he prove the
essential provisions of the contract, the question of the validity of the system of
registration is premature until it is shown that the contract could be properly registered
under the regulation. Martinez v. Jones, 1972-NMCA-054, 83 N.M. 722, 497 P.2d 233,
cert. denied, 83 N.M. 741, 497 P.2d 743.

Electrical energy tax invalid. — Because 7-9-80 NMSA 1978 (since repealed) insured
that locally consumed electricity is subject to no tax burden from the electrical energy
tax, while electricity generated in this state but sold outside the state is subject to a 2%
tax, the tax itself indirectly but necessarily discriminates against electricity sold outside
New Mexico; it thus violates a federal statute, 15 U.S.C. § 391, and is invalid under the
supremacy clause of the United States constitution. Arizona Pub. Serv. Co. v. Snead,
441 U.S. 141, 99 S. Ct. 1629, 60 L. Ed. 2d 106 (1979).

Federal statute invalidating energy tax constitutional. — A federal statute, 15
U.S.C. § 391, which invalidates the New Mexico electric energy tax, does not exceed
the permissible bounds of congressional action under the commerce clause of the
United States constitution since congress had a rational basis for finding that the tax
interfered with interstate commerce and selected a reasonable method to eliminate that
interference. Arizona Pub. Serv. Co. v. Snead, 441 U.S. 141, 99 S. Ct. 1629, 60 L. Ed.
2d 106 (1979).
Tax exemptions and deductions not unconstitutional donations unless
retroactive. — Gross receipts tax exemptions and deductions do not violate the
antidonation clause of the N.M. Const., art. IX, § 14 unless they are applied retroactively
to taxes due and payable. 1991 Op. Att'y Gen. No. 91-14.

Law reviews. — For article, "Ad Valorem Tax Status of a Private Lessee's Interest in
Publicly Owned Property: Taxability of Possessory Interests in Industrial Projects under
the New Mexico Industrial Revenue Bond Act," see 3 N.M.L. Rev. 136 (1973).

For article, "An Intergovernmental Approach to Tax Reform," see 4 N.M.L. Rev. 189
(1974).

For comment, "Coal Taxation in the Western States: The Need for a Regional Tax
Policy," see 16 Nat. Resources J. 415 (1976).

For article, "The Indian Tax Cases - A Territorial Analysis," see 9 N.M.L. Rev. 221
(1979).

For note, "Taxing of Electrical Energy: An Analysis of Arizona Public Service Company
v. Snead," see 9 N.M.L. Rev. 349 (1979).

For article, "The Deductibility for Federal Income Tax Purposes of the New Mexico
Gross Receipts Tax Paid on the Purchase of a Newly Constructed Home," see 13
N.M.L. Rev. 625 (1983).

For article, "Out of sight but not out of mind: New Mexico's tax on out-of-state services,"
see 20 N.M.L. Rev. 501 (1990).

For article, "New Mexico Taxes: Taking Another Look," see 32 N.M.L. Rev. 351 (2002).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 71 Am. Jur. 2d State & Local Taxation
§§ 28 to 30.

Income or receipts: constitutionality of tax on corporations in nature of, or purporting to
be, excise or privilege tax measured by income or receipts, 71 A.L.R. 256.

Distinction from other tax: what is a property tax as distinguished from excise, license or
other taxes, 103 A.L.R. 18.

Deductibility of other taxes or fees in computing excise or license taxes, 143 A.L.R. 263,
174 A.L.R. 1263.

Retroactive statute: constitutionality of retroactive statute imposing excise, license or
privilege tax, 146 A.L.R. 1011.
Goods in stock: specific tax imposed on goods in stock of dealer, as excise, or property
tax, 173 A.L.R. 1316.

Sales and use taxes on leased tangible personal property, 2 A.L.R.4th 859.

Transportation, freight, mailing, or handling charges billed separately to purchaser of
goods as subject to sales or use taxes, 2 A.L.R.4th 1124.

Cable television equipment or services as subject to sales or use tax, 5 A.L.R.4th 754.

84 C.J.S. Taxation §§ 165 to 166.