New Mexico – Regulation Defining Use

SALT Report 1441 – The New Mexico Taxation and Revenue Department recently defined the terms “use” and “using” for gross receipts and compensating use tax purposes.
The term “use” is divided into three components: use, consumption, or storage.  Effective February 29, 2012, Use means to employ or utilize property or a service for a particular purpose.  However, Use does not include:
  • Mere ownership or possession of property
  • The mere treatment, processing, or servicing of tangible property to make the property fit for utilization when the ultimate use of the property is outside New Mexico; or
  • The transfer to a customer of tangible personal property in the course of the treatment, processing, or servicing or the return of the property to the owner at the conclusion of the treatment, processing, or servicing.
The term “using” includes storage in New Mexico except where the storage is for subsequent sale of the property in the ordinary course of the seller’s business or for use solely outside New Mexico.
The regulation also provides two new examples illustrating the meaning of use and storage however, no definition is provided for consumption.
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