Compensating Tax

What is the purpose of compensating tax?

Compensating tax helps to eliminate unfair competition from out-of-state businesses. It levels the playing field when New Mexico buyers buy property, services, or some combination of property and services from out-of-state sellers who otherwise have no gross receipts...

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What is an agent for the collection of compensating tax?

Under certain circumstances, persons selling property or a combination of property and service to someone engaged in business in New Mexico may be required to collect compensating tax. The seller must not owe gross receipts tax on the sales, and the buyer must use the...

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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: The use of property by a New Mexico political subdivision that is or will be incorporated into a project created under the Metropolitan...

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