Public Project Revolving Fund: Pledged Revenue Category Definitions

Governmental Gross Receipts Tax (GGRT)

By legislation, 75% of all GGRT (now about $31M/year) is dedicated to NMFA for programmatic purposes. A portion of the remaining 25% is pledged to NMFA to finance State projects.

A governmental gross receipts tax of 5% is imposed on the receipts of New Mexico state and local governments (except public schools and hospitals) from:

  • The sale of water by a utility owned and operated by a county, municipality or other political subdivision of the state
  • Sewage services
  • Refuse collection, refuse disposal, or both
  • The sale of tangible personal property, other than water, from facilities open to the general public
  • The performance of or admission to recreational, athletic or entertainment services or events in facilities open to the general public
  • The renting of parking, docking or tie-down spaces or the granting of permission to park vehicles, tie-down aircraft or dock boats.

The governmental gross receipts tax is not imposed on receipts derived from:

  • gross receipts taxes
  • compensating taxes
  • motor vehicle taxes
  • gasoline taxes
  • special fuel supplier’s taxes
  • the oil and gas emergency school, severance, conversation and ad valorem taxes
  • resources taxes
  • processors taxes
  • service taxes
  • boat excise taxes
  • the sale of livestock or raw agricultural products
  • event center surcharges
  • stadium surcharges or athletic facility surcharges

There are various deductions that can be claimed under the governmental gross receipts tax – see New Mexico Taxation and Revenue Department publication FYI-105, GROSS RECEIPTS & COMPENSATING TAXES: AN OVERVIEW revised 7/1/2008.

State Gross Receipts Tax (SGRT)

NMFA receives the first $680,000 of monthly State GRT collections . In New Mexico, only NMFA is authorized to issue bonds secured by a State GRT pledge.

Most states have a Sales Tax. New Mexico does not have a Sales Tax but it does have a Gross Receipts Tax (as defined below). The State Gross Receipts Tax is the portion of the Gross Receipts Tax that accrues to the State rather than to local governmental entities.

Gross Receipts Tax (GRT)

Gross Receipts Taxes are collected by the New Mexico Taxation and Revenue Department and then distributed to local municipalities. When Intercept Agreements with NMFA are in place, NMFA receives the pledged portion of the GRT before distributions to municipalities are made.

The gross receipts tax is a tax on persons engaged in business in New Mexico for the privilege of doing business in New Mexico. The tax is imposed on the gross receipts of persons who:

  • Sell property in New Mexico (including real property; tangible personal property, including electricity and manufactured homes, licenses (other than for copyrights, trademarks or patents) and franchises
  • Perform services in New Mexico (including construction activities and all construction materials that will become part of the construction project)
  • Lease or license property employed in New Mexico
  • Grant a right to use a franchise employed in New Mexico
  • Benefit from the sale of oil, natural gas or liquid hydrocarbons consumed as fuel in the pipeline transportation of such products

The gross receipts tax has a series of exemptions categorized as:

  • Out-of-State Services Exemption
  • Racetrack Exemption
  • Stadium Exemption
  • Textbook Exemption
  • Vehicle, Boat and Fuel Exemptions
  • Wage Exemption

There are various deductions that can be claimed under the governmental gross receipts tax – see New Mexico Taxation and Revenue Department publication FYI-105, GROSS RECEIPTS & COMPENSATING TAXES: AN OVERVIEW revised 7/1/2008.

Fire Protection Fund

Fire Protection Funds pledged to cover debt service for the purchase of fire equipment and the construction of fire stations financed through NMFA were until FY2018 paid to NMFA at the beginning of the fiscal year and fully covered the debt service obligation for the whole fiscal year. Beginning in July 2018 funds will be paid to NMFA periodically throughout the year.

The Fire Protection Fund is managed by the State Fire Marshal and is funded by insurance premiums. Funds are provided for distribution to incorporated cities, towns and villages, and to county fire districts, in proportion to their respective needs, for use in the operation, maintenance and betterment of local fire departments. Annual allocations from the State Fire Marshal are based on the ISO ratings* of the underlying fire districts and are paid through the State Treasurer’s Office.

*Insurance Services Office, Inc, an independent statistical, rating, and advisory organization that serves the property and casualty insurance industry

Local Special Tax

Gasoline Taxes are collected by the New Mexico Taxation and Revenue Department. When an Intercept agreement is in place with NMFA, NMFA receives the pledged portion of any cigarette and gasoline taxes on a monthly basis.

Local Special Taxes are taxes levied on local business and services and include such taxes as those levied on Cigarettes, Gasoline, Liquor, Pari-Mutuel Wagerning, Lodgers (i.e., taxes on hotel and motel room occupancy), and Severance (i.e., taxes collected on natural resources extracted from New Mexico lands).

Special Assessment

Special Assessment taxes include taxes in support of specific infrastructure projects and are usually real estate based. A Special Improvement District established by voters may finance, for instance, the construction of a sewage system with a Special Assessment on real estate located within the boundaries of the District.

Mill Levy

A Mill Levy tax is a tax on the value of homes and other real estate imposed by local municipal entities. Mill Levy taxes are often imposed in support of General Obligation Bond Issues (see below) but can be imposed for other purposes. A one mill levy tax on a $100,000 home is a tax of about $10.

General Obligation

General Obligation Bonds are bond issues approved by voters for the purpose of funding capital projects. State General Obligation Bonds come before the voters every two years in New Mexico and are general obligation indebtedness of the State. General Obligation Bonds issued by municipal entities or school districts are general obligation indebtedness of those entities and are generally financed through property tax assessments.

Under legislation, the State guarantees payment of School district debt and the guarantee is implemented through a Memorandum of Understanding between the State Treasurer’s Office and NMFA. If school district debt service is not received one day prior to the due date, the State Treasurer’s Office makes the payment to the Paying Agent and deducts the payment from the State Equalization Guarantee Distribution to the school district.

Net System Revenue

Net System Revenue is a pledge of the general operating revenues of entities such as water authorities, health care facilities, educational and cultural institutions and sports venues.

For water authorities and similar utilities, the pledge is based on, and relies on, rate payer assessments and the ability to adjust rates based on revenue and expense needs.

For community colleges and universities, net system revenues include net revenue from a variety of revenue sources such as tuition and fees, endowment earnings, fundraising campaigns, governmental appropriations and auxiliary income. Similarly, hospitals, museums, performing arts venues, sports arenas and other major self-standing institutions have many different sources of revenue to support their expense base. Sufficiency of net revenue after expenses determines an institution’s ability to finance bond or other debt issues based on a Net System Revenue pledge.