By Peter G. Pupke, Esq.
Effective December 19, 2023, New Mexico has adopted a regulation that specifies that receipts of a digital platform that displays digital advertising are subject to the state’s gross receipts tax (GRT). The state also amended a regulation on reporting GRT according to business location to add an example on reporting receipts from digital advertising. (NMAC 3.2.213.13, adopted eff. 12/19/2023; NMAC 3.1.4.13, amended eff. 12/19/2023.)
Adopted regulation. New regulation NMAC 3.2.213.13, provides that the receipts of a provider of a digital platform that displays digital advertising services, whose digital platform may be accessed or viewed within New Mexico, from the sale of advertising services to advertisers within and without New Mexico are subject to the gross receipts tax.
“Digital advertising services” means advertisement services on digital platforms, including advertisements in the form of banner advertising, search engine advertising, interstitial advertising, and other comparable advertising services.
“Digital platform” means any type of website, including part of a website, or applications, that a user is able to access or view.
“User” means any person who accesses or views a digital platform with a device, which is defined as any medium through which a digital platform may be accessed or viewed, including stationary or portable computing devices, tablets, phones, and smart devices, or similar equipment capable of accessing the internet and displaying a digital platform.
Reporting location for gross receipts from digital advertising. Regulation NMAC 3.1.4.13, relating to reporting gross receipts tax according to business location, is also amended to add an example relating to how to report receipts from digital advertising:
Company X provides a digital advertising service to customer Y that can be viewed in New Mexico, and is intended to be viewed only in New Mexico, through access to company X’s digital platform, as that term is defined in Subsection D of NMAC 3.2.213.13 (see herein). The product of the digital advertising service is delivered to the locations of all persons in New Mexico viewing or accessing the advertising. Under N.M. Admin. Code § 3.1.4.13(C)(5)(e), the reporting location of the gross receipts and related deductions from this service is the location of company X as being the location from which the product of the digital advertising service was transmitted to the purchaser.
