A. To prevent evasion of the gross receipts tax and to aid in its administration, it is presumed that all receipts of a person engaging in business are subject to the gross receipts tax. A person engaged solely in transactions specifically exempt under the provisions of the Gross Receipts and Compensating Tax Act shall not be required to register or file a return under that act.

B. If receipts from nontaxable charges for mobile telecommunications services are aggregated with and not separately stated from taxable charges for mobile telecommunications services, the charges for nontaxable mobile telecommunications services shall be subject to gross receipts tax unless the home service provider can reasonably identify nontaxable charges in its books and records that are kept in the regular course of business. For the purposes of this subsection, "charges for mobile telecommunications services", "home service provider" and "mobile telecommunications services" have the meanings given in the federal Mobile Telecommunications Sourcing Act.

C. A marketplace provider engaging in business in this state is not liable for amounts of gross receipts tax collected incorrectly due to the marketplace provider reasonably relying on erroneous information provided by the seller.

History: 1953 Comp., § 72-16A-5, enacted by Laws 1966, ch. 47, § 5; 2002, ch. 18, § 3; 2019, ch. 270, § 28.

Cross references. — For the federal Mobile Telecommunications Sourcing Act, see 4 U.S.C.S. § 116 et seq.

The 2019 amendment, effective July 1, 2019, provided that a marketplace provider engaging in business in this state is not liable for gross receipts tax collected incorrectly due to the marketplace provider reasonably relying on erroneous information provided by the seller; and added Subsection C.

The 2002 amendment, effective August 1, 2002, added the Subsection A designation; made a minor stylistic change in Subsection A; and added Subsection B.

Taxpayer must prove deduction proper. — Any assessment of taxes by the taxation and revenue department is presumed to be correct and, in protesting the assessment of taxes, taxpayer has the burden of proving the deductions were proper. In reviewing, courts will reverse the department's decision only if it is arbitrary, capricious, an abuse of discretion, otherwise not in accordance with law, or not supported by substantial evidence. Arco Materials, Inc. v. State Taxation & Revenue Dep't, 1994-NMCA-062, 118 N.M. 12, 878 P.2d 330, rev'd on other grounds sub nom. Blaze Constr. Co. v. Taxation & Revenue Dep't, 1994-NMSC-110, 118 N.M. 647, 884 P.2d 803, cert. denied, 514 U.S. 1016, 115 S. Ct. 1359, 131 L. Ed. 2d 216 (1995).

Gross receipts to owner and trainer from horse races taxable. — The legislature, in enacting the Gross Receipts Tax Act, did not intend to exempt receipts from horse races. There is neither ambiguity nor doubt that the language used in the Gross Receipts Tax Act applies to the receipts of a horse owner paid to him for a winning purse and the receipts of a horse trainer paid to him as his percentage of a winning purse. Till v. Jones, 1972-NMCA-046, 83 N.M. 743, 497 P.2d 745, cert. denied, 83 N.M. 740, 497 P.2d 742. See Section 7-9-40 NMSA 1978 which now exempts receipts from horse race purses.

Application of presumption. — A hearing officer's interpretation of the term "broker" and the court of appeals' affirmance of that interpretation is viewed in light of the presumption that "all receipts of a person engaging in business are subject to the gross receipts tax" under the provisions of this section. Rauscher, Pierce, Refsnes, Inc. v. Taxation & Revenue Dep't, 2002-NMSC-013, 132 N.M. 226, 46 P.3d 687.

Evidence required. — When the corporation contracted with an out-of-state buyer for the corporation to destroy munitions, it was entitled to the gross receipts deduction, and the hearing officer could not properly determine that use or delivery took place within the state without some affirmative evidence in the record to support that conclusion. TPL, Inc. v. N.M. Taxation & Revenue Dep't, 2003-NMSC-007, 133 N.M. 447, 64 P.3d 474.

Nationwide school operating location in state. — Nationwide technical-vocational school operating a location in New Mexico is subject to the gross receipts tax; the taxable base includes tuition receipts from students in New Mexico for curriculum development, financial aid services, and job placement services. ITT Educ. Serv. v. Taxation & Revenue Dep't, 1998-NMCA-078, 125 N.M. 244, 959 P.2d 969.

Standard of review on appeal. — Department's gross receipts tax assessment can only be reversed by the court of appeals if arbitrary or capricious or there is an abuse of discretion, such that it is not supported by substantial evidence or it is otherwise not in accordance with law. ITT Educ. Serv. v. Taxation & Revenue Dep't, 1998-NMCA-078, 125 N.M. 244, 959 P.2d 969.

Am. Jur. 2d, A.L.R. and C.J.S. references. — Reusable soft drink bottles as subject to sales or use taxes, 97 A.L.R.3d 1205.