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Information for Non-profits

New Mexico considers you a tax-exempt organization if the federal government has first granted the status to you under Section 501(c) of the Internal Revenue Code with a classification as an educational or social entity.

Your gross receipts may be exempt from gross receipts tax under Section 7-9-29 NMSA 1978.

Generally, the receipts of a 501(c)(3) or 501(c)(6) organization are exempt from gross receipts tax, except for unrelated trade or business under the Internal Revenue Code. What you buy may not be exempt from taxation (please see note below). Unrelated business income is fully taxable at state and federal levels. See FYI-103: Information for Non-Profit Organizations See also  Brochure #4, 501(c)(3) Nonprofit Groups & New Mexico’s Gross Receipts Tax.

Note: Although the gross receipts of a 501(c)(3) organization are exempt, the organization will pay another business’s passed-on gross receipts tax when it buys tangible personal property unless it delivers a nontaxable transaction certificate (NTTC) to the seller. It may not deliver such a certificate when it buys services. Please see the “Who Must Register a Business?” section, or consult FYI-204: Nontaxable Transaction Certificates (NTTCs).

501(c)(6) organizations may not deliver NTTCs for buying tangible personal property or services.