N.M. Admin. Code § 3.2.226.9

Current through Register Vol. 35, No. 24, December 23, 2024

Section 3.2.226.9 - REAL ESTATE COMMISSION ON SALES NOT SUBJECT TO GROSS RECEIPTS TAX ARE FULLY TAXABLE

A. No portion of a real estate commission is deductible if the total receipts from the sale of the real property are either deductible or exempt from gross receipts tax.

B. Example 1: A real estate broker receives a $6,000 commission on the sale of a home by the owner. The receipts of the homeowner from the sale are exempt as receipts from an isolated or occasional sale pursuant to Section 7-9-28 NMSA 1978. The real estate broker must pay tax on the entire $6,000 commission.

C. Example 2: A real estate broker receives a $6,000 commission on the sale of a piece of raw land by a developer. Receipts from the sale of the land are deductible from gross receipts as receipts from the sale of real property pursuant to Section 7-9-53 NMSA 1978. The real estate broker must pay tax on the entire $6,000 commission.

N.M. Admin. Code § 3.2.226.9

3/13/85, 4/2/86, 11/26/90, 11/15/96; 3.2.226.9 NMAC - Rn, 3 NMAC 2.66.2.9 & A, 6/14/01