Consumables Gross Receipts Tax Deduction for Manufacturers

In the 2012 legislative session the New Mexico Legislature passed, and Governor Martinez signed into law, an expansion to the deduction for the sale of tangible personal property to manufacturers. A seller may deduct receipts from sales to a manufacturer of tangible personal property that becomes an ingredient or component part of a manufactured product.

The deduction is phased in as follows:

  • 20% of receipts received in calendar 2013
  • 40% in 2014
  • 60% in 2015
  • 80% in 2016
  • 100% of receipts after January 1, 2017

For the purposes of this deduction, “consumable” is defined as tangible personal property that is incorporated into, destroyed, depleted, or transformed in the process of manufacturing a product, including electricity, fuels, water, manufacturing aids and supplies, chemicals, gases, repair parts, spares, and other tangibles used to manufacture a product. Read more about the consumables deduction.