Q. Why would I need a Nontaxable Transaction Certificate?
In transactions for which state law provides gross receipts tax deductions, the buyer or lessee may give the seller or lessor a New Mexico nontaxable transaction certificate (NTTC) to document the business’s deduction of its receipts. Deductible receipts are not subject to gross receipts tax. They are subtracted from gross receipts before the tax is calculated.In deductible transactions, the seller or lessor incurs no gross receipts tax to pass along to the customer, so the customer makes the purchase “tax free.” Although deductible receipts are not subject to gross receipts tax, they must be reported to the New Mexico Taxation and Revenue Department (TRD) on a Form CRS-1
. Under state law, exempt receipts do not need to be reported.
Q. Will New Mexico accept tax-exempt certificates from another state?
Because the gross receipts tax structure differs fundamentally from a sales tax, New Mexico does not accept any tax exemption or deduction certificates issued by other states. New Mexico does, however, accept Multijurisdictional Uniform Sales and Use Tax Certificates (MTCs) and Border States Uniform Sale for Resale Certificates (BSCs).
Q. What types of documentation are required to support a deduction from gross receipts tax?
The nontaxable transaction certificate (NTTC) is the only acceptable proof of certain deductions. The buyer obtains an NTTC from TRD to give to a seller. The seller then may deduct those receipts when determining taxable gross receipts. In practice, this means the buyer can buy goods and services free of the gross receipts tax that is usually passed along by the seller. The seller must accept an NTTC in good faith, reasonably confident that the buyer executing the NTTC will use the property or service in the manner stated on the NTTC. The seller needs only one NTTC from each buyer to cover all transactions of the same type with that buyer.
New Mexico businesses that sell to out-of-state buyers may obtain the out-of-state buyer certificate, NTTC-OSB. Unlike other NTTCs that the buyer obtains from TRD, the NTTC-OSB is obtained by the seller. The New Mexico seller completes Form ACD-31050, Application for Nontaxable Transaction Certificates (NTTCs)
, and the seller then provides the NTTC-OSBs to out-of-state customers who are: 1) buying tangible personal property either for resale or for use as an ingredient or part of a manufactured product, or (2) buying manufacturing services that are performed directly upon either tangible personal property the purchaser is in the business of manufacturing or in the manufactured item’s ingredients or parts. The buyer must provide all the required information on an NTTC-OSB and give it to the New Mexico seller.
Q. How do I get NTTCs and NTTC-OSBs?
Q. Ca n I request NTTC’s Online?
Yes. As a registered New Mexico gross receipts taxpayer, you can obtain, execute and record the use of NTTCs through NTTC-NET
. To contact persons who can assist you with this online program, please click the Contact Us button. You may use NTTC-NET to make both initial and additional applications for NTTCs. If you are the seller or lessor, you can use your CRS identification number to execute an NTTC online. If you know the NTTC recipient’s CRS identification number, you may execute multiple NTTCs online. You can print an NTTC on a local printer, although you need not print an NTTC to execute it.