Section 9. General Examples

The following examples illustrate the application of Section 7-9-78 NMSA 1978: A. Example 1: E, a New Mexico corporation, is solely engaged in the business of leasing electric typewriters to business establishments in New Mexico. E purchases a typewriter in Texas to hold for lease in the ordinary course of its business. E does not use the typewriter in any other manner. E may deduct the value of the typewriter in computing its compensating tax due. B. Example 2: E, a Colorado company, buys stoves from Z, a Colorado company. E initially uses the stoves in its business in Colorado but later converts their use solely to leasing. E then brings the stoves into New Mexico for purposes of leasing. E is not liable for the compensating tax if the stoves are leased to restaurants. If E brings the stoves into New Mexico to be furnished as part of a leased dwelling house of which E is the lessor, E is liable for the compensating tax.