This memorandum addresses New Mexico Broadcaster Association questions relating to the applicability of the New Mexico gross receipts and compensating tax liability that may arise out of New Mexico broadcaster sales of advertising time. Set forth below is: 1) an executive summary; 2) a very basic summary of provisions of the Gross Receipts and Compensating Tax Act that are applicable to the questions; and 3) a fairly detailed analysis of several factual scenarios that we understand are common in the industry.
We are confident in our legal analysis, however, in New Mexico there is always a possibility that individuals within the Taxation and Revenue Department (e.g., auditors, people answering telephone questions), or the Department as a whole, may disagree on some issues. That is the nature of dealing with a government agency whose role is to collect and maximize revenue for the State of New Mexico.