A. Receipts from the sale or lease of real property and from the lease of a manufactured home as provided in Subsection B of this section, other than receipts from the sale or lease of oil, natural gas or mineral interests exempted by Section 7-9-32 NMSA 1978, may be deducted from gross receipts. However, that portion of the receipts from the sale of real property which is attributable to improvements constructed on the real property by the seller in the ordinary course of his construction business may not be deducted from gross receipts.

B. Receipts from the rental of a manufactured home for a period of at least one month may be deducted from gross receipts. Receipts received by hotels, motels, rooming houses, campgrounds, guest ranches, trailer parks or similar facilities, except receipts received by trailer parks from the rental of a space for a manufactured home or recreational vehicle for a period of at least one month, from lodgers, guests, roomers or occupants are not receipts from leasing real property for the purposes of this section.

C. Receipts attributable to the inclusion of furniture or appliances furnished as part of a leased or rented dwelling house, manufactured home or apartment by the landlord or lessor may be deducted from gross receipts.

History: 1953 Comp., § 72-16A-14.8, enacted by Laws 1969, ch. 144, § 43; 1972, ch. 80, § 3; 1973, ch. 205, § 1; 1975, ch. 160, § 3; 1979, ch. 338, § 5; 1983, ch. 220, § 11; 1991, ch. 203, § 5; 1998, ch. 94, § 1.

Cross references. — For deduction of real estate commissions from gross receipts tax, see 7-9-66.1 NMSA 1978.

The 1998 amendment, effective April 1, 1998, inserted "or recreational vehicle" near the middle of the second sentence in Subsection B.

The 1991 amendment, effective July 1, 1991, substituted "manufactured" for "mobile" in the section heading and throughout the section.

Contract for correctional services not a lease. — Where a contract for correctional services provided that the contractor was paid based on the number of inmates housed and that the contractor had the right to fill up unoccupied space with inmates from other jurisdictions, the contract was not a lease for real property. Corrections Corp. of Am. v. State of N.M., 2007-NMCA-148, 142 N.M. 779, 170 P.3d 1017.

Receipts attributable to improvements. — Real estate developer was not entitled to deduction for receipts from the sale of real estate attributable to improvements made on the land since those improvements were completed prior to the effective date of this section but sale was not made until after effective date, as the plain language of this section shows a legislative intent not to allow a deduction on receipts from sale of real property attributable to such improvements. Do a Ana Dev. Corp. v. Commissioner of Revenue, 1973-NMCA-018, 84 N.M. 641, 506 P.2d 798.

Monies not received from lease of real property. — The receipts, which this section declares not to be "receipts from leasing real property," are clearly intended to mean the monies or rentals normally received by operators of hotels, motels, etc., when being operated as such in their customary and ordinary manner, from the lodgers, guests, roomers and occupants thereof. Chavez v. Commissioner of Revenue, 1970-NMCA-116, 82 N.M. 97, 476 P.2d 67.

"Lease" not "license". — An arrangement between the owner of several properties used as bingo halls and the non-profit organizations who operated the bingo games was a lease and not a license where the organizations were required to pay rent, they were granted exclusive possession of certain facilities on the premises and the use of the facilities at certain times, and the owner could not revoke the agreement at will; although the arrangement was not a typical lease, restrictions in the Bingo and Raffle Act [repealed] accounted for the type of arrangement created and to deny that this was a lease would have made it impossible for bingo operators to enter arrangements that would qualify as leases. Quantum Corp. v. Taxation & Revenue Dep't, 1998-NMCA-050, 125 N.M. 49, 956 P.2d 848.

"License" not "lease". — The buy-down contract payments were reimbursements to the taxpayer for her sales loss incurred as a result of engaging in the discount promotions and where the shelf-display contract receipts were taxable pursuant to this section because those contracts bore a much greater resemblance to a license than to the creation and conveyance of an interest in real property that would have constituted a lease. Grogan v. N.M. Taxation & Revenue Dep't, 2003-NMCA-033, 133 N.M. 354, 62 P.3d 1236, cert. denied, 133 N.M. 413, 63 P.3d 516.

Yearly lease of motel. — Since taxpayers leased motel to a railway on an annual basis at a fixed rental, having no relationship to whether the railway company let the rooms to lodgers, guests or roomers, the rental received by the taxpayer was not income received from lodgers, guests or roomers, but was income by way of rental received from the lessee railway for the entire premises, and was deductible from gross receipts. Chavez v. Commissioner of Revenue, 1970-NMCA-116, 82 N.M. 97, 476 P.2d 67.

Receipts from license agreements not deductible. — Agreements between the taxpayer and several other companies providing for the use of space in the taxpayer's department stores for the purpose of retailing certain items, which agreements expressly negatived the intention to create a lease, constituted licenses, the money from selling which was not deductible from the gross receipts tax under this section. S.S. Kresge Co. v. Bureau of Revenue, 1975-NMCA-015, 87 N.M. 259, 531 P.2d 1232.

Law reviews. — For article, "The Deductibility for Federal Income Tax Purposes of the New Mexico Gross Receipts Tax Paid on the Purchase of a Newly Constructed Home," see 13 N.M.L. Rev. 625 (1983).