[Code of Federal Regulations]

[Title 48, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR29.401-4]



[Page 572-573]

 

            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM

 

                CHAPTER 1--FEDERAL ACQUISITION REGULATION

 

PART 29_TAXES--Table of Contents

 

                      Subpart 29.4_Contract Clauses

 

Sec. 29.401-4  New Mexico gross receipts and compensating tax.



    (a) Definition. Services, as used in this subsection, is as defined 

in the Gross Receipts and Compensating Tax Act of the State of New 

Mexico, Sec. 7-9-3(k) NM SA 1978, and means all activities engaged in 

for other persons for a consideration, which activities involve 

predominately the performance of a service as distinguished from selling 

or



[[Page 573]]



leasing property. Services includes activities performed by a person for 

its members of shareholders. In determining what is a service, the 

intended use, principal objective or ultimate objective of the 

contracting parties shall not be controlling. Services also includes 

construction activities and all tangible personal property that will 

become an ingredient or component part of a construction project. Such 

tangible personal property retains its character as tangible personal 

property until it is installed as an ingredient or component part of a 

construction project in New Mexico. However, sales of tangible personal 

property that will become an ingredient or component part of a 

construction project to persons engaged in the construction business are 

sales of tangible personal property.

    (b) Contract clause. The contracting officer shall insert the clause 

at 52.229-10, State of New Mexico Gross Receipts and Compensating Tax, 

in solicitations and contracts issued by the agencies identified in 

paragraph (c) of this subsection when all three of the following 

conditions exist:

    (1) The contractor will be performing a cost-reimbursement contract.

    (2) The contract directs or authorizes the contractor to acquire 

tangible personal property as a direct cost under a contract and title 

to such property passes directly to and vests in the United States upon 

delivery of the property by the vendor.

    (3) The contract will be for services to be performed in whole or in 

part within the State of New Mexico.

    (c) Participating agencies. (1) The agencies listed below have 

entered into an agreement with the State of New Mexico to eliminate the 

double taxation of Government cost-reimbursement contracts when 

contractors and their subcontractors purchase tangible personal property 

to be used in performing services in whole or in part in the State of 

New Mexico and for which title to such property will pass to the United 

States upon delivery of the property to the contractor and its 

subcontractors by the vendor. Therefore, the clause applies only to 

solicitations and contracts issued by the--



United States Defense Threat Reduction Agency;

United States Department of Agriculture;

United States Department of the Air Force;

United States Department of the Army;

United States Department of Energy;

United States Department of Health and Human Services;

United States Department of Interior;

United States Department of Labor;

United States Department of the Navy;

United States Department of Transportation;

United States General Services Administration;

United States Missile Defense Agency; and

United States National Aeronautics and Space Administration.



    (2) Any other Federal agency which expects to award cost-

reimbursement contracts to be performed in New Mexico should contact the 

New Mexico Taxation and Revenue Department to execute a similar 

agreement.



[53 FR 34228, Sept. 2, 1988, as amended at 55 FR 3883, Feb. 5, 1990; 55 

FR 38517, Sept. 18, 1990; 62 FR 64930, Dec. 9, 1997. Redesignated at 68 

FR 13205, Mar. 18, 2003; 69 FR 17770, Apr. 5, 2004]