As used in the Gross Receipts and Compensating Tax Act:

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A. “buying” or “selling” means a transfer of property for consideration or the performance of service for consideration;

B. “department” means the taxation and revenue department, the secretary of taxation and revenue or an employee of the department exercising authority lawfully delegated to that employee by the secretary;

C. “digital good” means a digital product delivered electronically, including software, music, photography, video, reading material, an application and a ringtone;

D. “disclosed agency” means a person receiving money from a third party on behalf of another if the person receiving the money, or the person on whose behalf the money is received, disclosed the relationship to the third party from whom the person receives money, or if the third party otherwise has actual knowledge that the person to whom the money is paid receives the money on behalf of another;

E. “financial corporation” means a savings and loan association or an incorporated savings and loan company, trust company, mortgage banking company, consumer finance company or other financial corporation;

F. “initial use” or “initially used” means the first employment for the intended purpose and does not include the following activities:

(1)     observation of tests conducted by the performer of services;

(2)     participation in progress reviews, briefings, consultations and conferences conducted by the performer of services;

(3)     review of preliminary drafts, drawings and other materials prepared by the performer of services;

(4)     inspection of preliminary prototypes developed by the performer of services; or

(5)     similar activities;

G. “lease” or “leasing” means an arrangement whereby, for a consideration, the owner of property grants another person the exclusive right to possess and use the property for a definite term;

H. “licensing” or “license” means an arrangement whereby, for a consideration, the owner of property grants another person a revocable, non-exclusive right to use the property;

I. “local option gross receipts tax” means a tax authorized to be imposed by a county or municipality upon a taxpayer’s gross receipts and required to be collected by the department at the same time and in the same manner as the gross receipts tax;

J. “manufactured home” means a movable or portable housing structure for human occupancy that exceeds either a width of eight feet or a length of forty feet constructed to be towed on its own chassis and designed to be installed with or without a permanent foundation;

K. “manufacturing” means combining or processing components or materials to increase their value for sale in the ordinary course of business, but does not include construction services; farming; electric power generation; processing of natural resources, including hydrocarbons; or the processing or preparation of meals for immediate consumption;

L. “manufacturing service” means the service of combining or processing components or materials owned by another, but does not include construction services; farming; electric power generation; processing of natural resources, including hydrocarbons; or the processing or preparation of meals for immediate consumption;

M. “marketplace provider” means a person who facilitates the sale, lease or license of tangible personal property or services or licenses for use of real property on a marketplace seller’s behalf, or on the marketplace provider’s own behalf, by:

(1)     listing or advertising the sale, lease or license, by any means, whether physical or electronic, including by catalog, internet website or television or radio broadcast; and

(2)     either directly or indirectly, through agreements or arrangements with third parties collecting payment from the customer and transmitting that payment to the seller, regardless of whether the marketplace provider receives compensation or other consideration in exchange for the marketplace provider’s services;

N. “marketplace seller” means a person who sells, leases or licenses tangible personal property or services or who licenses the use of real property through a marketplace provider;

O. “person” means:

(1)     an individual, estate, trust, receiver, cooperative association, club, corporation, company, firm, partnership, limited liability company, limited liability partnership, joint venture, syndicate or other entity, including any gas, water or electric utility owned or operated by a county, municipality or other political subdivision of the state; or

(2)     a national, federal, state, Indian or other governmental unit or subdivision, or an agency, department or instrumentality of any of the foregoing;

P. “property” means: (1)     real property;

(2)     tangible personal property, including electricity and manufactured homes;

(3)     licenses, including licenses of digital goods, but not including the licenses of copyrights, trademarks or patents; and

(4)     franchises;

Q. “research and development services” means an activity engaged in for other persons for consideration, for one or more of the following purposes:

(1)     advancing basic knowledge in a recognized field of natural science; (2)     advancing technology in a field of technical endeavor;

(3)     developing a new or improved product, process or system with new or improved function, performance, reliability or quality, whether or not the new or improved product, process or system is offered for sale, lease or other transfer;

(4)     developing new uses or applications for an existing product, process or system, whether or not the new use or application is offered as the rationale for purchase, lease or other transfer of the product, process or system;

(5)     developing analytical or survey activities incorporating technology review, application, trade-off study, modeling, simulation, conceptual design or similar activities, whether or not offered for sale, lease or other transfer; or

(6)     designing and developing prototypes or integrating systems incorporating the advances, developments or improvements included in Paragraphs (1) through (5) of this subsection;

R. “secretary” means the secretary of taxation and revenue or the secretary’s delegate;

S. “service” means all activities engaged in for other persons for a consideration, which activities involve predominantly the performance of a service as distinguished from selling or leasing property. “Service” includes activities performed by a person for

its members or shareholders. In determining what is a service, the intended use, principal objective or ultimate objective of the contracting parties shall not be controlling. “Service” includes construction activities and all tangible personal property that will become an ingredient or component part of a construction project. That tangible personal property retains its character as tangible personal property until it is installed as an ingredient or component part of a construction project in New Mexico. Sales of tangible personal property that will become an ingredient or component part of a construction project to persons engaged in the construction business are sales of tangible personal property; and

T. “use” or “using” includes use, consumption or storage other than storage for subsequent sale in the ordinary course of business or for use solely outside this state.