New Mexico § 7-1-55 - Contractor's bond for gross receipts; tax; penalty

§ 7-1-55. Contractor's bond for gross receipts; tax; penalty

A. A person engaged in the construction business who does not have a principal place

of business in New Mexico and who enters into a prime construction contract to be

performed in this state shall, at the time such contract is entered into, furnish

the secretary or the secretary's delegate with a surety bond, or other acceptable

security, in a sum equivalent to the gross receipts to be paid under the contract

multiplied by the sum of the applicable rate of the gross receipts tax imposed by Section 7-9-4 NMSA 1978 plus the applicable rate or rates of tax imposed pursuant to local option gross receipts

taxes to secure payment of the tax imposed on the gross receipts from the contract

and shall obtain a certificate from the secretary or the secretary's delegate that

the requirements of this subsection have been met. B. If the total sum to be paid under the contract is changed by ten percent or more

subsequent to the date the surety bond or other acceptable security is furnished to

the secretary or the secretary's delegate, such person shall increase or decrease,

as the case may be, the amount of the bond or security within fourteen days after

the change. C. If a person fails to comply with Subsection A or B of this section, the secretary

or the secretary's delegate: (1) may demand of the person by certified mail or in person that the person comply. Upon the failure of the person to comply within ten days of the date of the mailing

of such demand, the secretary may institute a proceeding to enjoin the person from

doing business as provided in Section 7-1-53 NMSA 1978; or (2) may, when a serious and immediate risk exists that an amount of tax due or reasonably

expected to become due from the person on gross receipts from a prime construction

contract will not be paid, request the person to comply with Subsections A and B of

this section, and, upon failure immediately to comply, the secretary may, without

further notice of any kind, apply to any district court of the state for an injunction

as provided in Section 7-1-53 NMSA 1978 . D. Subsections A, B and C of this section shall not apply if the total gross receipts

to be paid under the construction contract, including any change in such amount, are

less than fifty thousand dollars ($50,000). E. As used in this section, “ construction ” shall have the meaning set forth in Section 7-9-3.4 NMSA 1978 and “ engaging in business ” shall have the meaning set forth in Section 7-9-3.3 NMSA 1978 . F. A municipality or other political subdivision of the state or any agency of the

state shall not issue a building or other construction permit to any person subject

to the requirements of Subsection A of this section without first having been furnished

by the construction contractor with the certificate from the secretary or the secretary's

delegate specified in Subsection A of this section. Any person who issues any such permit before receiving the certificate shall be

deemed guilty of a misdemeanor and, upon conviction, be fined not less than fifty

dollars ($50.00) nor more than one hundred dollars ($100) for each offense.