SENATE BILL 452

49th legislature - STATE OF NEW MEXICO - first session, 2009

INTRODUCED BY

Mary Jane M. Garcia

AN ACT

RELATING TO TAXATION; PROVIDING A DEDUCTION FROM GROSS RECEIPTS FOR SELLING OR LEASING COMMUNICATIONS EQUIPMENT TO A COMMUNICATIONS PROVIDER IN NEW MEXICO THAT IS USED TO PROVIDE RETAIL COMMUNICATIONS SERVICES; DEFINING TERMS; PROVIDING A DEDUCTION FROM THE CALCULATION OF COMPENSATING TAX FOR THE VALUE OF COMMUNICATIONS EQUIPMENT PURCHASED OR LEASED ON WHICH COMPENSATING TAX IS DUE.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     Section 1. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

     "[NEW MATERIAL] DEFINITIONS--COMMUNICATIONS PROVIDERS.--As used in the Gross Receipts and Compensating Tax Act:

          A. "ancillary services" means services that are associated with or incidental to the provision of communications services, including conference bridging service, detailed telecommunications billing, directory assistance, vertical service and voice mail services;

          B. "communications equipment" means machinery, equipment and fixtures that are used primarily in the provision of communications services or ancillary services, including:

                (1) transmitting machinery, equipment and fixtures, such as computers, transformers, amplifiers, routers, bridges, repeaters, multiplexers and other items performing comparable functions, used in initiating, amplifying, processing, coding, recording, switching, routing and receiving communications services;

                (2) transporting machinery, equipment and fixtures, such as wire, cable, fiber, radio transmitters and receivers, satellite equipment and microwave equipment, used in transporting the signal to provide communications services;

                (3) supporting machinery, equipment and fixtures, such as auxiliary power supplies, test equipment, tools, poles, towers and heating and air conditioning necessary for providing communications services, to regulate, control, protect, monitor or enable transmitting and transporting machinery, equipment and fixtures; and

                (4) inventory parts for machinery, equipment or fixtures, such as accessories purchased as spare parts, repair parts or to upgrade or modify transmitting, transporting or supporting machinery, equipment or fixtures;

          C. "communications provider" means an individual or entity that provides communications services and ancillary services that are to be sold ultimately at retail;

          D. "communications services" means:

                (1) the electronic transmission, conveyance or routing of voice, data, audio, video or any other information or signal to a point or between or among points, including:

                     (a) transmission, conveyance or routing in which computer processing applications are used to act on the form, code or protocol of the content for purposes of transmission, conveyance or routing without regard to whether the service is referred to as voice over internet protocol services or is classified by the federal communications commission as enhanced or value-added; and

                     (b) services that are associated with or incidental to the provision of the transmission, conveyance or routing services described in this subsection, such as detailed telecommunications billing, directory assistance, vertical services and voice mail services; and

                (2) "communications services" does not include:

                     (a) data processing and information services that allow data to be generated, acquired, stored, processed or retrieved and delivered by an electronic transmission to a purchaser where the purchaser's primary purpose for the underlying transaction is the processed data or information;

                     (b) installation or maintenance of wiring or equipment on a customer's premises;

                     (c) tangible personal property;

                     (d) advertising, including directory advertising;

                     (e) billing and collection services provided to third parties;

                     (f) radio and television audio and video programming services, regardless of the medium, such as cable service as defined in Subsection (6) of 42 U.S.C. 522 and audio and video programming services delivered by commercial mobile radio service providers as defined in 47 C.F.R. 20.3, including the furnishing of transmission, conveyance and routing of the services by the programming service provider; or

                     (g) digital products delivered electronically, such as software, music, video, reading materials or ring tones;

          E. "conference bridging service" means an ancillary service that links two or more participants of an audio or video conference call and may include the provision of a telephone number; "conference bridging service" does not include the communications services used to reach the conference bridge;

          F. "detailed telecommunications billing service" means an ancillary service of separately stating information pertaining to individual calls on a customer's billing statement;

          G. "directory assistance" means an ancillary service of providing telephone number information or address information;

          H. "vertical service" means an ancillary service that is offered in connection with one or more communications services, that offers advanced calling features that allow customers to identify callers and to manage multiple calls and call connections, including conference bridging services; and

          I. "voice mail service" means an ancillary service that enables the customer to store, send or receive recorded messages; "voice mail service" does not include vertical services that the customer may be required to have in order to utilize the voice mail service." 

     Section 2. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

     "[NEW MATERIAL] DEDUCTION--GROSS RECEIPTS--COMMUNICATIONS EQUIPMENT.--

          A. Receipts from the sale or lease of communications equipment to a communications provider may be deducted at the rates set forth in this section from gross receipts of a seller or lessor of communications equipment if the communications provider that is the purchaser or lessee delivers a nontaxable transaction certificate to the seller or lessor.

          B. A communications provider may only deliver a nontaxable transaction certificate to a seller or lessor if the communications equipment being purchased or leased enables the communications provider to provide communications services ultimately to retail customers.

          C. The following amounts may be deducted from the gross receipts of a seller or lessor providing communications equipment to a communications provider:

                (1) for fiscal year 2010, the deduction is an amount equal to twenty percent of the gross receipts of the seller or lessor from selling or leasing communications equipment to a communications provider;

                (2) for fiscal year 2011, the deduction is an amount equal to forty percent of the gross receipts of the seller or lessor from selling or leasing communications equipment to a communications provider;

                (3) for fiscal year 2012, the rate of the deduction provided in this section shall equal sixty percent of the gross receipts of the seller or lessor from selling or leasing communications equipment to a communications provider;

                (4) for fiscal year 2013, the rate of the deduction provided in this section shall equal eighty percent of the gross receipts of the seller or lessor from selling or leasing communications equipment to a communications provider; and

                (5) for fiscal year 2014 and each fiscal year thereafter, the rate of the deduction provided in this section shall equal one hundred percent of the gross receipts of the seller or lessor from selling or leasing communications equipment to a communications provider."

     Section 3. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

     "[NEW MATERIAL] DEDUCTION--COMPENSATING TAX--COMMUNICATIONS EQUIPMENT.--

          A. The value of communications equipment purchased or leased, on which compensating tax must be paid, may be deducted in computing the compensating tax due.

          B. In computing the compensating tax due, a communications provider may deduct the following from the value of the communications equipment purchased or leased:

                (1) for fiscal year 2010, an amount equal to twenty percent of the value of communications equipment purchased or leased;

                (2) for fiscal year 2011, an amount equal to forty percent of the value of communications equipment purchased or leased;

                (3) for fiscal year 2012, an amount equal to sixty percent of the value of communications equipment purchased or leased;

                (4) for fiscal year 2013, an amount equal to eighty percent of the value; and 

                (5) for fiscal year 2014 and each fiscal year thereafter, an amount equal to one hundred percent of the value."

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