SALT Report 1448 – The New Mexico Legislature approved and signed into law HB 116 which provides an exemption for electricity used in the production and transmission of electricity and expands a prior exemption to include voltage source conversion technologies.
Effective July 1, 2012 the following may be deducted from the gross receipts tax:
- Receipts derived from operating a market or exchange for the sale or trade of electricity, rights to electricity and derivative products, and from providing ancillary services, and
- Receipts from the transmission of electricity where voltage source conversion technology is employed to provide such services and from ancillary services
The purpose of the first deduction is to encourage the development of electrical transmission capacity. The purpose of the second deduction is to provide an incentive for an electricity exchange located in New Mexico and to encourage ancillary services and related businesses necessary to support that exchange.
Under the terms of the law, “ancillary services” are defined as services that:
- Are supplied from or in connection with facilities employing voltage source conversion technology, and
- Are used to support or enhance the efficient and reliable operation of the electric system
For Further Information: