A. Exempted from the gross receipts tax are the receipts from selling research and development services performed outside New Mexico the product of which is initially used in New Mexico and that are sold:

(1) between affiliated corporations;

(2) to the United States by persons, other than organizations described in Subsection A of Section 7-9-29 NMSA 1978, who are prime contractors operating facilities in New Mexico designated as national laboratories by act of congress; or

(3) to persons, other than organizations described in Subsection A of Section 7-9-29 NMSA 1978, who are prime contractors operating facilities in New Mexico designated as national laboratories by act of congress.

B. An "affiliated corporation" means a corporation that directly or indirectly, through one or more intermediaries controls, is controlled by or is under common control with the subject corporation. "Control" means ownership of stock in a corporation that represents at least eighty percent of the total voting power of that corporation and has a stated or par value equal to at least eighty percent of the total stated or par value of the stock of that corporation.

History: 1978 Comp., § 7-9-13.1, enacted by Laws 1989, ch. 262, § 4; 2019, ch. 270, § 32.

The 2019 amendment, effective July 1, 2021, provided an exemption from the gross receipts tax for receipts from selling certain research and development services; in the section heading, added "certain", and deleted "performed outside the state the product of which is initially used in New Mexico; exceptions"; in Subsection A, deleted "Except as provided otherwise in Subsection B, of this section", and after "selling", added "research and development"; redesignated former Subsection C as Subsection B, and after "used in New Mexico", deleted "The exemption provided by this section does not apply to research and development services other than research and development services" and added "and that are sold".