{"id":4280,"date":"2016-04-06T13:10:07","date_gmt":"2016-04-06T19:10:07","guid":{"rendered":"https:\/\/www.tax.newmexico.gov\/all-nm-taxes\/?p=4280"},"modified":"2026-04-11T13:30:03","modified_gmt":"2026-04-11T19:30:03","slug":"video-factory","status":"publish","type":"post","link":"https:\/\/www.tax.newmexico.gov\/all-nm-taxes\/2016\/04\/06\/video-factory\/","title":{"rendered":"Video Factory"},"content":{"rendered":"<p>[et_pb_section fb_built=&#8221;1&#8243; _builder_version=&#8221;4.6.6&#8243; _module_preset=&#8221;default&#8221;][et_pb_row _builder_version=&#8221;4.6.6&#8243; _module_preset=&#8221;default&#8221;][et_pb_column _builder_version=&#8221;4.6.6&#8243; _module_preset=&#8221;default&#8221; type=&#8221;4_4&#8243;][et_pb_text _builder_version=&#8221;4.6.6&#8243; _module_preset=&#8221;default&#8221; hover_enabled=&#8221;0&#8243; sticky_enabled=&#8221;0&#8243;]<\/p>\n<div class=\"blogDateTitleContainer\">\n<div class=\"blogDateTitle\">04\/06\/2016<\/div>\n<\/div>\n<div class=\"blogItem\">\n<p><a href=\"https:\/\/realfile.tax.newmexico.gov\/16-10_video_factory.pdf\">16-10<\/a><\/p>\n<p><span>On January 10, 2013, the Department assessed the Taxpayer for gross receipts tax, penalty and interest for the tax period ending on December 31, 2008.\u00a0 On February 8, 2013, the Taxpayer filed a protest of the assessment.\u00a0 The Taxpayer is a video production company.\u00a0 The bulk of the assessment at issue relates to services and products that he Taxpayer provided for the State Bar of New Mexico, which had provided a nontaxable transaction certificate (NTTC) to the Taxpayer.\u00a0 The Taxpayer recorded various live presentations, edited the recordings and provided copies of the recordings on three DVDs to the State Bar.\u00a0 The State Bar maintains copies in its library, distributes copies upon request, and allows viewing of the copies.\u00a0 The Taxpayer did not receive any payment from the State Bar, and was not entitled to any payment, until the DVDs had been delivered.\u00a0 The Taxpayer deducted its receipts from the sales of the DVDs to the State Bar as tangible personal property pursuant to the NTTC that was issued to the Taxpayer by the State Bar.\u00a0 The Department audited the Taxpayer and determined that the Taxpayer was treating the DVDs that it provided to the State Bar solely as the sale of tangible personal property.\u00a0 The Department concluded that the actual value of the DVDs was not as tangible personal property and was predominantly from the service of recording, editing and transferring video files.\u00a0 The Department allowed deductions of the cost of the DVDs as tangible personal property, but disallowed the bulk of the deductions as the receipts were from the services performed.\u00a0 At hearing, the Department argued that the Taxpayer\u2019s production of the DVDs is predominantly the performance of a service, and the Taxpayer is not engaged in selling DVDs except in conjunction with the service, to which the DVDs are incidental.\u00a0 The Taxpayer argued that the State Bar paid for the movies, and the movies are impossible to produce without a physical medium, like the DVDs.\u00a0 The Hearing Officer found that the Taxpayer\u2019s receipts were deductible as the sale of tangible personal property, as the Taxpayer\u2019s services have no value by themselves and the DVDs are what the State Bar paid for.\u00a0\u00a0 The Taxpayer\u2019s protest was granted.<\/span><\/p>\n<\/div>\n<p>[\/et_pb_text][et_pb_text _builder_version=&#8221;4.6.6&#8243; _module_preset=&#8221;default&#8221;]<\/p>\n<p><a href=\"\/all-nm-taxes\/tax-decisions-orders\/\">Back to Tax Decisions &amp; Orders<\/a><\/p>\n<p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>04\/06\/2016 16-10 On January 10, 2013, the Department assessed the Taxpayer for gross receipts tax, penalty and interest for the tax period ending on December 31, 2008.\u00a0 On February 8, 2013, the Taxpayer filed a protest of the assessment.\u00a0 The Taxpayer is a video production company.\u00a0 The bulk of the assessment at issue relates to [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"960","footnotes":""},"categories":[43],"tags":[],"class_list":["post-4280","post","type-post","status-publish","format-standard","hentry","category-tax-decisions-orders"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Video Factory : All NM Taxes<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.tax.newmexico.gov\/all-nm-taxes\/2016\/04\/06\/video-factory\/\" \/>\n<meta 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