FAR Section 29.401-2

SUBPART 29.4—CONTRACT CLAUSES

Subpart 29.4—Contract Clauses
29.401 Domestic contracts.
29.401-1 Indefinite-delivery contracts for leased
equipment.
Insert the clause at 52.229-1, State and Local Taxes, in
solicitations and contracts for leased equipment when—
(a) A fixed-price indefinite-delivery contract is
contemplated;
(b) The contract will be performed wholly or partly in the
United States or its outlying areas; and
(c) The place or places of delivery are not known at the time
of contracting.
29.401-2 Construction contracts performed in North
Carolina.
The contracting officer shall insert the clause at 52.229-2,
North Carolina State and Local Sales and Use Tax, in solicitations and contracts for construction to be performed in North
Carolina. If the requirement is for vessel repair to be performed in North Carolina, the clause shall be used with its
Alternate I.
29.401-3 Federal, State, and local taxes.
(a) Except as provided in paragraph (b) of this section,
insert the clause at 52.229-3, Federal, State, and Local Taxes,
in solicitations and contracts if—
(1) The contract is to be performed wholly or partly in
the United States or its outlying areas;
(2) A fixed-price contract is contemplated; and
(3) The contract is expected to exceed the simplified
acquisition threshold.
(b) In a noncompetitive contract that meets all the conditions in paragraph (a) of this section, the contracting officer
may insert the clause at 52.229-4, Federal, State, and Local
Taxes (State and Local Adjustments), instead of the clause at
52.229-3, if the price would otherwise include an inappropriate contingency for potential postaward change(s) in State or
local taxes.
29.401-4 New Mexico gross receipts and compensating
tax.
(a) Definition.
“Services,” as used in this subsection, is as defined in the
Gross Receipts and Compensating Tax Act of the State of New
Mexico, Sec 7-9-3(k) NM SA 1978, and means all activities
engaged in for other persons for a consideration, which activities involve predominately the performance of a service as
distinguished from selling or leasing property. “Services”
includes activities performed by a person for its members or
shareholders. In determining what is a service, the intended

29.401-4
use, principal objective or ultimate objective of the contracting parties shall not be controlling. “Services” also includes
construction activities and all tangible personal property that
will become an ingredient or component part of a construction
project. Such 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. However, 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.
(b) Contract clause. The contracting officer shall insert the
clause at 52.229-10, State of New Mexico Gross Receipts and
Compensating Tax, in solicitations and contracts issued by the
agencies identified in paragraph (c) of this subsection when
all three of the following conditions exist:
(1) The contractor will be performing a cost-reimbursement contract.
(2) The contract directs or authorizes the contractor to
acquire tangible personal property as a direct cost under a contract and title to such property passes directly to and vests in
the United States upon delivery of the property by the vendor.
(3) The contract will be for services to be performed in
whole or in part within the State of New Mexico.
(c) Participating agencies. (1) The agencies listed below
have entered into an agreement with the State of New Mexico
to eliminate the double taxation of Government cost-reimbursement contracts when contractors and their subcontractors purchase tangible personal property to be used in
performing services in whole or in part in the State of New
Mexico and for which title to such property will pass to the
United States upon delivery of the property to the contractor
and its subcontractors by the vendor. Therefore, the clause
applies only to solicitations and contracts issued by the—
United States Defense Threat Reduction Agency;
United States Department of Agriculture;
United States Department of the Air Force;
United States Department of the Army;
United States Department of Energy;
United States Department of Health and Human Services;
United States Department of the Interior;
United States Department of Labor;
United States Department of the Navy;
United States Department of Transportation;
United States General Services Administration;
United States Missile Defense Agency; and
United States National Aeronautics and Space
Administration.

(2) Any other Federal agency which expects to award
cost-reimbursement contracts to be performed in New Mexico
should contact the New Mexico Taxation and Revenue
Department to execute a similar agreement.
29.4-1