This bill introduces new deductions for gross receipts tax related to 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 for deductions from gross receipts for sales of new residential housing, with limits set at $125,000 for sales intended for ownership and $75,000 for sales intended for lease. The bill also stipulates that these deductions cannot be claimed simultaneously with each other or with other specified deductions within a twelve-month period.

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.