Section 8. Use Of Property By Governmental Entities

A. For purposes of Section 7-9-14 NMSA 1978, the phrase “United States” does not include individual states or any agency, department, instrumentality or political subdivision of an individual state. The phrase “the state of New Mexico” includes any agency, institution of higher education, board, commission or department which has been created by statute, executive order or action of the legislature and which has been charged with the administration or enforcement of certain provisions of New Mexico statutes. The phrase “or any political subdivision thereof” includes incorporated municipalities, counties, school districts, conservation districts or other entities authorized by statute and which are governed by representatives elected by the public. The use of property in New Mexico by the United States or any of its agencies, departments or instrumentalities is exempt from compensating tax. Except for tangible personal property incorporated into a metropolitan redevelopment project or into a construction project, the use of property in New Mexico by the state of New Mexico or any of its agencies, departments, instrumentalities or political subdivisions is exempt from compensating tax. B The following examples illustrate the application of Section 7-9-14 NMSA 1978: (1) Example 1: The air force purchases a fighter jet for use at an air force base in New Mexico. The use of this plane in New Mexico by the United States is exempt from the compensating tax. (2) Example 2: Z, a soil and water conservation district created pursuant to the Soil and Water Conservation District Act, buys equipment and trees for its use in controlling erosion. Because Z is a political subdivision of New Mexico, its use of the equipment and trees are not subject to the compensating tax use of this plane in New Mexico by the United States is exempt from the compensating tax. (2) Example 2: Z, a soil and water conservation district created pursuant to the Soil and Water Conservation District Act, buys equipment and trees for its use in controlling erosion. Because Z is a political subdivision of New Mexico, its use of the equipment and trees are not subject to the compensating tax. [9/29/67, 12/5/69, 3/9/72, 11/20/72, 3/20/74, 7/26/76, 6/18/79, 4/7/82, 5/4/84, 4/2/86, 11/26/90, 3/16/95, 11/15/96; 3.2.102.8 NMAC - Rn, 3 NMAC 2.14.8 & A, 5/15/01; A, 12/30/10] 3.2.102.9 TANGIBLE PERSONAL PROPERTY INCORPORATED INTO A METROPOLITAN REDEVELOPMENT PROJECT: Tangible personal property purchased by a New Mexico municipality and incorporated into a metropolitan redevelopment project created under the Metropolitan Redevelopment Code is subject to the compensating tax if purchased from an out-of-state supplier who does not pay either the New Mexico gross receipts tax or the New Mexico compensating tax on behalf of the buyer on the sale. Tangible personal property purchased by a New Mexico municipality for an otherwise nontaxable use and subsequently converted to 3.2.102 NMAC 2 use in a metropolitan redevelopment project created under the Metropolitan Redevelopment Code is subject to the compensating tax. The value of tangible personal property in either fact situation is subject to New Mexico compensating tax.