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The Department can enter into tax agreements with specific government entities.
Below is information about three types of agreements that the Department has entered into with other government entities: Tribal Cooperative Agreements, U.S. Government Agreements (Type 15 NTTCs) and Information Sharing Agreements.
Tribal Cooperative Agreements
Section 9-11-12.1 NMSA 1978, authorizes the Department to enter into agreements with the following Pueblos, Tribes and Nations to collect any gross receipts tax imposed by the Pueblos, Tribes or Nations:
- San Felipe
- San Ildefonso
- San Juan (Ohkay Owingeh)
- Santa Ana
- Santa Clara
- Santo Domingo (Kewa)
- Zia or Zuni
- The nineteen New Mexico pueblos acting collectively
- The Jicarilla Apache Nation
- The Mescalero Apache Tribe
If a pueblo, tribe or nation grants a 25% credit against its tax and meets other specified conditions, the state will grant a 75% credit against state and local gross receipts tax due from taxpayers subject to both taxes (Section 7-9-88.1 NMSA 1978). The result is that taxpayers pay the same tax they would under state and local taxes alone, avoiding dual taxation. Tribal taxes only apply to businesses operating on land owned by a tribe or held by the United States in trust for the tribe.
U.S. Government Agreements – Type 15 NTTCs
The purposes of the U.S. Government Agreements (Type 15 NTTCs) are to:
- Facilitate the prompt and economic accomplishment of the lawful objectives of the United States;
- Facilitate the equitable administration and enforcement of the revenue laws of the State of New Mexico;
- Prevent litigation between the parties, and between the Department and persons who claim to be contractors to and/or agents and instrumentalities of the United States.
The authorities for these agreements are found in federal and state law and regulations.
Receipts from selling tangible personal property to a federal contractor or subcontractor may be deducted from the seller’s gross receipts. This is done if the federal contractor or subcontractor executes a Type 15 Nontaxable Transaction Certificate (NTTC) to the seller. The federal contractor or subcontractor is authorized to issue a Type 15 NTTC only if the federal contract number is entered on the appropriate line of the Type 15 NTTC. In addition, all of the criteria contained in the agreement between New Mexico and the U.S. Government must be met. The contracting agency is one of the U.S. agencies that take part in the agreement.
The criteria contained in the agreement between New Mexico and the U.S. Government states:
The contract must be for services;
- The contract must be a cost or cost plus fixed fee;
- The contract must contain a title-passing clause. This means that title to all tangible personalpropertypurchased under the contract passes immediately to the federal government upon delivery to the contractorby the vendor; and
- The services performed pursuant to the contract must be subject to the gross receipts tax.
A federal contractor or subcontractor may not issue a Type 15 NTTC for the purchase of services (Regulation 184.108.40.206 NMAC). Compensating tax will be due from the contractor if the contractor executes a Type 15 NTTC for the purchase of tangible personal property not specifically identified in the contract and not subsequently turned over to the U.S. Government.
Information Sharing Agreements
Section 7-1-8.6 NMSA 1978 authorizes the Department to provide tax information to an authorized representative of an Indian nation, tribe or pueblo whose territory is within New Mexico. This is pursuant to an information-sharing agreement with the Indian nation, tribe or pueblo. The Indian nation, tribe or pueblo must have enacted a confidentiality statute similar to Section 7-1-8 NMSA 1978. The information exchanged under such an agreement is to be used by either government entity for the administration of its respective tax laws to ensure the proper enforcement of the tax laws of each government.