Gross Receipts and Oil and Gas Construction Services
New Mexico allows a deduction for construction services.
Specific oil and gas services are defined as oil and gas construction services. Oil and gas services defined as a construction service include cementing, drilling, logging.
The gross receipts derived from the performance of these specific oil and gas services are deductible from the gross receipts.
When you bill your customer for oil and gas construction services you should deduct all allowable amounts to reduce New Mexico gross receipts tax.
For example drill stem testing is an oil and gas construction service and is deductible. GeoInvoice Upstream Expert Matrix Item DRL0311.
Can I deduct materials and equipment?
Yes. Specific oilfield equipment and materials are deductible as a component part of an oilfield. For example casing and cement are a component part of the oilfield. GeoInvoice Upstream Expert Matrix Item EMS0715.
Reporting requirements for gross receipts deductions
The buyer of a deductible service or tangible personal property must obtain a nontaxable transaction certificate (NTTC)from the New Mexico Taxation and Revenue Department TAP or taxpayer access point to complete an application for a NTTC.
For oil and gas services and products the operator of the well will provide the oilfield service company or vendor the NTTC. This entitles the seller to deduct those oil and gas construction services and materials when determining gross receipts.
About GeoInvoice Upstream Expert Matrix
GeoInvoice Upstream Expert Matrix is a cloud-based solution that solves the current upstream system of disconnected invoice management and sales tax administration into one cohesive, automated workflow. GeoInvoice Upstream Expert Matrix provides service companies, vendors, and operators the benefits of increased control, flexibility, transparency, and standardization and savings of time and cost in invoicing and sales tax determination.
How does it work?
Geoinvoice Upstream Expert Matrix uses digital transformation and optimization tools to analyze oil and gas invoices and then validates the transaction tax determination. GeoInvoice Upstream Expert Matrix includes twenty-four states in the major oil & gas basins and sales tax rates for all US states.
Susette is the founder of GeoInvoice which provides sales tax solutions for the mobile workforce. Susette patented location-based sales tax calculation for sales to locations that do not have an address. U.S. Patent No. 9,589,259 B2.
Location-based sales tax calculation was derived from Susette’s experience in managing upstream oil and gas sales tax compliance.
She has worked to deliver sales tax content and services to help the upstream OFS segment get sales tax rights. Susette’s sales tax knowledge comes from her tax professional roles in the oil and gas industry.
Susette received a BBA in Finance, Magna Cum Laude from Sam Houston State University. She is a certified public accountant and certified global management accountant. Member of the AICPA, Texas Society Of CPAs, Petroleum Accountant Society of Houston