This bill introduces new provisions related to gross receipts tax deductions for labor incurred during the construction of new residential housing and for the sale of residential housing in New Mexico. It establishes a hold harmless distribution to municipalities and counties, ensuring they receive compensation equal to the total deductions claimed by taxpayers for these activities. The bill outlines specific calculations for these distributions based on local option gross receipts tax rates and the business locations of the taxpayers.

Additionally, the bill allows taxpayers to deduct receipts from selling labor for new residential housing construction and provides specific limits on deductions for sales of new residential housing, including amounts for properties intended for lease. It stipulates that taxpayers cannot claim deductions under both sections of the bill simultaneously and requires separate reporting of these deductions. The provisions of this act are set to take effect on July 1, 2025.