This is an appeal from the decision and order of the Commissioner of Revenue assessing gross receipts tax on two, hauling and road maintenance, of several operations performed by the taxpayer under its contract with Duke City Lumber Company, Inc. (Duke) for a period from January 1, 1974 through September 30, 1976.
Most of the pertinent facts are set forth in the findings of the Commissioner:
“3. This taxpayer has been engaged in the logging business in New Mexico for a number of years. During 1975 and 1976, the taxpayer had contracts with Duke City Lumber Company, Inc., (Duke) which provided that the taxpayer was to cut, limb, skid, and load timber located on Federal land and haul it to Duke’s sawmill in Española, New Mexico. Duke had previously entered into agreements with the United States Forest Service which enabled Duke to cut and remove designated timber and Duke had contracted with the taxpayer to perform specified functions.
“4. From time to time the Forest Service advertises the proposed sale of specified timber located in the National Forests and sets a minimum price at which the timber will be sold. Lumber companies, such as Duke, bid on these sales and the successful bidder must comply with the rules of the Forest Service; this includes the building of temporary roads, and maintenance of present roads, the disposal of slash and exercising erosion control. When Duke contracts with the taxpayer, the taxpayer is required to perform these functions.
“5. When Duke contracts with the taxpayer, Duke agrees to pay the taxpayer a specified amount of money — based on per M, (1,000 feet) Gross, Less Culls,— for all logs cut, skidded, loaded and hauled to the Española mill. The taxpayer gets paid only if the timber is delivered to the mill.
“6. There is no breakdown in the contract of the money paid for each function performed by the taxpayer; neither Duke’s records nor the taxpayer’s records segregate payments made or received for the several functions performed under the contract.”
Section 7-9-4, N.M.S.A.1978 (formerly § 72-16A-4, N.M.S.A.1953 (Supp.1975)) of the Gross Receipts and Compensating Tax Act provides in pertinent part:
“A. For the privilege of engaging in business, an excise tax equal to four percent of gross receipts is imposed on any person engaging in business in New Mexico.
“B. The .tax imposed by this section shall be referred to as the ‘gross receipts tax.’ ”
Section 7-9-35, N.M.S.A.1978 (formerly § 72-16A-12.23, N.M.S.A.1953 (Supp.1975)) of the Act provides:
“When a privilege tax is imposed by the Resources Excise Tax Act * * *, the provisions of the act shall apply and determine the full measure of tax liability for the privilege of engaging in the business stated in the act and no provision of the Gross Receipts and Compen*593sating Tax Act shall apply to or create a tax liability for such privilege * * *.”
The following are the pertinent parts of the Resources Excise Tax Act necessary to the discussion of taxpayer’s points of error.
Section 7 -25- 3, N.M.S.A.1978 (formerly § 72 -16A-22, N.M.S.A.1953 (Supp.1975)):
“B. ‘natural resources’ means timber and any product thereof and any metalliferous or nonmetalliferous mineral product, combination or compound thereof, but does not include oil, natural gas, liquid hydrocarbon individually or any combination thereof or carbon dioxide;
* * * * * *
“F. ‘service charge’ means the total amount of money or the reasonable value of other consideration received for severing or processing any natural resources by any person who is not the owner of the natural resource. However, if the money received does not represent the value of the severing or processing performed, ‘service charge’ means the reasonable value of the severing or processing performed;
“G. ‘severer’ means any person engaging in the business of severing natural resources that he owns, or any person who is the owner of natural resources and who has another person perform the severing of such natural resources;
“H. ‘severing’ means mining, quarrying, extracting, felling or producing any natural resource in New Mexico for sale, profit or commercial use; and
“I. ‘taxable value’ means the value after severing or processing, without deduction of any kind other than specified in this subsection, of any natural resource severed or processed in New Mexico. ‡ % ‡
Section 7-25 -4, N.M.S.A.1978 (formerly § 72-16A-23, N.M.S.A.1953 (Supp.1975)):
“A. For the privilege of severing natural resources, there is imposed on any severer of natural resources in New Mexico an excise tax at the following rates on the taxable value of the natural resources:
(1) All natural resources except potash and molybdenum — three-quarters of one percent;
(2) potash — one-half of one percent; and
(3) molybdenum — one-eighth of one percent.”
Section 7 -25 -6, N.M.S.A.1978 (formerly § 72 -16A-25, N.M.S.A.1953 (Supp.1975)):
“A. For the privilege of severing or processing in New Mexico natural resources that are owned by another person, and are not otherwise taxed by Sections 4 and 5 [7-25-4, 7-25-5 NMSA 1978] of the Resources Excise Tax Act, there is imposed on the service charge of any person severing or processing natural resources that are owned by another person an excise tax at the same rate that would be imposed on an owner of natural resources for performing the same function.
“B. The tax imposed by this section shall be referred to as the ‘service tax.’ ”
Taxpayer alleges two points of error. The first being that all of the services performed by it are either “severing” or “processing” subject to the service tax. The second point is that all of the receipts received by it are exempt from the gross receipts tax.
Essentially, the Bureau’s argument is that the taxpayer’s activities should be separated into two parts for purposes of taxation. Stated differently, the “road maintenance” and “hauling” activities of the taxpayer are not an integral part of “severing” as contemplated by § 7-25-6A, supra. Why just into two parts? Why not into five parts (felling, building of temporary roads, maintenance of present roads, disposal of slash and erosion control); it would be just as logical or illogical. We do not believe that this is what the legislature intended. Looking again at § 7-25-3(H), supra, it states in pertinent part that: “ ‘severing’ means * * * felling * * * for sale, profit or commercial use * * A tree at the location where it was felled would have very little value in comparison with its value at a lumber mill. The cost of felling *594a tree is just a small part of what makes up the total cost of preparation for sale or commercial use. All of these five activities are integral parts of “severing” in this situation.
The primary purpose of the Resources Excise Tax Act is obviously to encourage the development of the extractive industries of the state because the rates imposed are a fraction of the Gross Receipts Tax. To adopt the narrow interpretation advocated by the Bureau would not be consonant with the basic purpose of the Act. “The chief aim of statutory construction is to arrive at true legislative intent.” Montoya v. McManus, 68 N.M. 381, 388, 362 P.2d 771, 776 (1961). The Forest Service dictated the terms and conditions for severing the timber in question. None of the several activities prescribed could be eliminated. The Forest Service had roughly estimated the cost of each activity solely for the purpose of setting the minimum bid figure. It is our decision that “road maintenance” and “hauling” were an integral and indispensable part of taxpayer’s activity of severing and as such were exempt from the Gross Receipts Tax by the provisions of § 7-9-35, supra.
The decision and order of the Commissioner is reversed and the Bureau’s interpretive regulation G.R. Regulation 12.23:3 is declared void, insofar as it applies to the facts herein.
IT IS SO ORDERED.
SUTIN, J., specially concurring.
LOPEZ, J., concurs.