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Is a government agency subject to compensating tax?

The use of property by a government agency is exempt from compensating tax (Section 7-9-14(A) NMSA 1978) with two exceptions:

  1. The use of property by a New Mexico political subdivision that is or will be incorporated into a project created under the Metropolitan Redevelopment Code is not exempt, and
  2. The use of tangible personal property that becomes an ingredient part of a construction project is not exempt.
    Property used on Indian reservations or pueblo grants by their governing bodies, agencies, or subdivisions is also exempt (Section 7-9-14(B) NMSA 1978). The use of property by any branch of the U.S. Armed Forces engaged in resale activities is exempt (Section 7-9-31 NMSA 1978).
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