Incoming Los Alamos National Laboratory manager Triad National Security will indeed have to pay a state gross receipts tax of just over 7 percent, a spokesperson for the New Mexico Taxation and Revenue Department said this week.

Triad — a nonprofit organization encompassing nonprofit, tax-exempt senior partners Battelle Memorial Institute, the University of California, and Texas A&M University — should pay the Los Alamos gross-receipts tax rate of 7.3125% for the period beginning July 1, 2018, and ending Dec. 31, 2018, the state agency’s tax information and policy office determined.

The Taxation and Revenue Department informed Triad of the decision Aug. 15, following a July 24 query from the Department of Energy contractor. The spokesperson for the state agency said the company was on the hook for taxes because it is organized as a limited liability corporation and not a tax-exempt 501(c)(3).

The incumbent Los Alamos National Laboratory manager, Los Alamos National Security, also pays the state’s gross receipts tax, which is essentially a tax on revenue. National Technology and Engineering Solutions of Sandia, a wholly owned Honeywell [HON] subsidiary running the Sandia National Laboratories in Albuquerque, is also a for-profit entity.

Local New Mexico governments had worried a nonprofit laboratory operator might be exempt from the tax, as the University of California largely was during the roughly 60 years it managed the lab on its own.

In 2017, the majority-Democrat New Mexico Legislature overwhelmingly approved a bill that would have required nonprofit national lab operators in the state to pay the gross receipts tax. Gov. Susana Martinez, a Republican, vetoed the bill.

Triad is set to take over as lab manager Nov. 1 under a National Nuclear Security Administration management and operations contract awarded June 8 and worth more than $20 billion over 10 years, with options. Annual fees are capped at $50 million.

A Triad spokesperson said the company has notified the National Nuclear Security Administration about New Mexico’s decision. The spokesperson declined to comment further.