What exactly is a gross receipts tax? Here is the New Mexico Taxation and Revenue Department’s definition:
“The gross receipts tax is a tax on the privilege of doing business in the state. It applies to the total amount of money or other considerations (barter, for instance) that a business receives for its transactions here in New Mexico. The taxable amount is the gross amount–not net after business expenses–and the tax liability belongs to the business instead of the customer. The gross taxable amount includes all reimbursed expenses billed to the customer: meals, travel, hotels, shipping, handling, postage, etc.”
According to Harry Messenheimer, a senior fellow with the New Mexico-based Rio Grande Foundation, this definition is similar to the definition of gross receipts taxes levied in other states.
— Paul J. Gessing