New Mexico – Bill Eliminates Exclusion for Certain Internet Retailers

SALT Report 1384 – A bill has been introduced in the New Mexico Senate that would remove the gross receipts and compensating use tax exclusion for certain out-of-state retailers that maintain content on a computer in New Mexico.

The amended bill reads as follows:

The definition of engaging in business as used in the Gross Receipts and Compensating Tax Act, means carrying on or causing to be carried on any activity with the purpose of direct or indirect benefit, except that:

  • Engaging in business does not include having a worldwide web site as a third-party content provider on a computer physically located in New Mexico but owned by another non-affiliated person; and
  • Engaging in business excludes using a non-affiliated third-party call center to accept and process telephone or electronic orders of tangible personal property or licenses primarily from non-New Mexico buyers, which orders are forwarded to a location outside New Mexico for filling, or to provide services primarily to non-New Mexico customers.  Section 7-9-7.1 NMSA 1978 is repealed.
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