- New Mexico ruling clarifies Gross Receipts Tax application to services provided to the federal government by contractors.
- Government contractors should understand state tax compliance when entering new states.
- Aprio’s SALT team offers advice on state tax regimes and their business impact.
- Sales to the federal government are often exempt from sales tax, but not all transactions are exempt.
- New Mexico’s Gross Receipts Tax has unique aspects that differ from typical sales tax.
- GRT is generally imposed on services unless specifically exempt.
- Tax is on seller’s gross receipts, not the transaction, but can be passed to the customer.
- Receipts from services to the federal government are not exempt from GRT.
- Ruling addressed sale for resale exemption and out-of-state deduction for a prime contractor and subcontractor.
- Services were performed in New Mexico for a federal agency in Maryland.
- Issues included subcontractor’s deduction for resale services and prime contractor’s deduction for services performed in New Mexico.
Source: aprio.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
