This bill introduces new gross receipts tax deductions aimed at promoting the construction and sale of new residential housing in New Mexico. Specifically, it allows taxpayers to deduct receipts from selling labor incurred during the construction of new residential housing and provides deductions for sales of new residential housing, with limits set at $125,000 for general sales and $75,000 for properties intended for lease within a twelve-month period. However, deductions are not permitted for receipts related to renovation or remodeling, and taxpayers cannot claim deductions from both sections of the bill simultaneously.

Additionally, the bill establishes a hold harmless distribution to municipalities and counties to offset the impact of these gross receipts tax deductions. This distribution will be calculated based on the total deductions claimed by taxpayers in each municipality and county, ensuring that local governments are compensated for potential revenue losses. The effective date for these provisions is set for July 1, 2025.