The second exclusion: letting outsiders use the amenities

“If a homeowners association allows the use of the common areas or facilities by persons other than members…the association's receipts from use…by such non-members are not exempt from gross receipts tax.”

This is the one that catches boards trying to close a budget gap. A clubhouse rented to the public for events, a pool opened to a neighbourhood swim team for a fee, a meeting room let to a local business — each is a taxable receipt, not incremental dues revenue. An association that starts renting its facilities has created a gross receipts tax liability in the same act that created the income.

The third exclusion: selling or leasing association property

“The receipts of any homeowner association from the sale or lease of property to any individual…are not exempt from the gross receipts tax under Section 7-9-20 NMSA 1978.”

Leasing a parking space, a storage unit, a boat slip or a strip of common land to an owner is a lease of property. The fact that the lessee is a member does not bring it back inside the exemption, because the exemption is written for dues and assessments, not for consideration paid for the use of property.

The fourth exclusion: work on an individual lot

“The receipts…from…service…are not exempt from the gross receipts tax…when the service is not performed on common areas served or controlled by the association.”

The classic example is the enforcement charge-back: the association mows, cleans or repairs a delinquent owner's yard under its self-help powers and bills the owner. That is a service performed on an individual lot, and the receipt is taxable — even though the amount usually lands on the owner's ledger alongside genuinely exempt assessments.

Associations that use charge-backs as a routine enforcement tool are the ones most likely to have accumulated exposure here without noticing, because the charge is administered as if it were an assessment.

Why this is current rather than historical

The rule is thirty years old, which makes it settled law that few boards read rather than news. But it was checked against the state's own cumulative indexes of the New Mexico Register for both 2025 and 2026: the Taxation and Revenue Department's adopted rules in that window were confined to tax-credit provisions and general gross receipts provisions. 3.2.108 was not touched in either year.

So the line drawn in 1996 is the line that applies to a New Mexico association's 2027 budget.

Where the exposure sits

Run the association's revenue lines against the four exclusions. Any receipt that is not a dues or assessment payment from an owner-member, applied to the common areas, deserves a specific answer rather than an assumption. Where facility rentals to outsiders, charge-backs or property leases are a regular feature of the budget, the question is not whether to register — it is how long the practice has been running.