On 16 Aug 2004 17:04:02 -0700, (BKS) wrote:

Recently, I am trying to put my home for sale. Broker filled out the
sales contract and mailed out to me (I am out of town..home is in
different town). His commission shows 5% PLUS sales tax on purchase
price of the home. Is it normal practice to pay state sales tax in
addition to commission the agent is getting? Why sales tax? Do
Brokers have to pay sales tax on commission they get from the sale of
the home? Home is in New Mexico.

Right now I am renting that home and the same broker is managing the
property. He charges 10% of monthly rent plus sales tax on his 10%
commission. I was renting my home for the first time, so I thought it
was normal to pay sales tax on 10% rental commission.

Now i am trying to sell home, he is tryng to do the same. Now I
realize I should never have paid sales tax on his 10% rental
commission. can anyone tell me how should I approach this situation?
Thanks.

From New Mexico web site(www.state.nm.us/tax/trd_ques.htm). Note the last
sentence of paragraph 2.

1. What is New Mexico's sales tax rate?

New Mexico does not have a sales tax. It has a gross receipts tax instead. This
tax is imposed on persons engaged in business in New Mexico, but in almost every
case the person engaged in business passes the tax to the consumer. In that
way the gross receipts tax resembles a sales tax. See question # 3 under "Gross
Receipts Taxes".

2. What is taxable?

Generally speaking, sales and leases of goods and other property, both tangible
and intangible, are taxable. Groceries, magazines, and over-the-counter drugs
are taxable. (Prescription drugs are no longer taxable.) Unlike many other
states, sales and performances of services are taxable in New Mexico.

3. What is the gross receipts tax rate and how is it determined?

The gross receipts tax rate varies throughout the state from 5.00% to 7.1875%.
The total rate is a combination of rates imposed by:

The state,
The counties, and
The municipalities