[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR29.401-6]

[Page 554-555]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 29--TAXES--Table of Contents
 
                     Subpart 29.4--Contract Clauses
 
Sec. 29.401-6  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 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

[[Page 555]]

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 Special Weapons 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; 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]