Understanding and utilizing Non-Taxable Transaction Certificates (NTTCs) is crucial for businesses operating in New Mexico to manage gross receipts tax effectively. This guide provides essential information on NTTCs, helping sellers, lessors, and resellers navigate the process of obtaining and using these certificates to ensure tax compliance and maximize eligible deductions.
Understanding NTTCs: Your Key to New Mexico Gross Receipts Tax Deductions
The New Mexico Taxation and Revenue Department (TRD) uses Non-Taxable Transaction Certificates (NTTCs) to streamline the process of claiming deductions on gross receipts tax. Each NTTC type corresponds to specific deductions, simplifying tax administration for both businesses and the state. For a detailed overview of NTTC types and their associated deductions, refer to the official FYI-204: Nontaxable Transaction Certificates (NTTCs) publication or Form ACD-31050, Application for Nontaxable Transaction Certificates (NTTC).. These resources offer comprehensive descriptions and are vital for any business engaging with NTTCs.
NTTCs for Sellers and Lessors: Reducing Your Gross Receipts Tax Burden
In New Mexico, sellers and lessors are legally responsible for gross receipts tax. While you have the option to pass this tax on to your customers, NTTCs offer a valuable mechanism to deduct receipts from qualifying transactions, thereby reducing your overall tax liability.
Obtaining an NTTC from the Taxation and Revenue Department allows you to exempt specific transactions from gross receipts tax. Importantly, you only need to secure a single NTTC from a customer to cover all transactions of the same type with that customer, simplifying ongoing business operations.
When a customer provides you with a properly executed NTTC, it serves as conclusive evidence that the transaction is eligible for deduction. This protects you, the seller or lessor, from having to collect gross receipts tax on those qualified sales. Accepting an NTTC in good faith provides a clear and legally sound basis for tax deductions.
It’s worth noting that while NTTCs are a primary method for claiming deductions, New Mexico law (Section 7-9-43 NMSA 1978) allows for alternative evidence in many cases. This means that for many deductions, you may not always need an NTTC if you can provide sufficient alternative documentation. However, deductions under Section 7-9-46 NMSA 1978 specifically require Type 11 or Type 12 NTTCs, highlighting the importance of understanding specific deduction requirements.
Important Note regarding Type 6 NTTC: For businesses that previously required a contractor’s license for certain classifications (GS-3 tile, GS-10 fencing, etc.), licensing is no longer required as of April 1, 2016. However, if you fall into one of these categories and need a Type 6 NTTC, you can still apply through the Taxpayer Access Point portal: https://tap.state.nm.us or by contacting the department directly at [email protected].
NTTCs for Resellers: Exempting Your Purchases from Gross Receipts Tax
If your business operates as a reseller, NTTCs can exempt you from paying gross receipts taxes on qualified purchases. After registering with the New Mexico Taxation and Revenue Department and obtaining a New Mexico Business Tax Identification Number (NMBTIN), you can acquire NTTCs online via the Taxpayer Access Point (TAP).
It’s critical to understand that resale certificates from other states are not valid in New Mexico. While a Type 2 NTTC is generally required for resellers, the state does recognize some exceptions. Customers not obligated to register with the Taxation and Revenue Department might be able to use a Multijurisdictional Sales and Use Tax certificate (issued by the Multistate Tax Commission) or a Border States Uniform Sale for Resale certificate. More details on these alternatives can be found in FYI-204: Nontaxable Transaction Certificates (NTTC’s).
Utilizing the Taxpayer Access Point (TAP) for Online NTTC Management
The Taxpayer Access Point (TAP) system offers a convenient online platform for managing NTTCs. If you are a buyer or lessee with a valid NMBTIN, TAP allows you to:
- Obtain new NTTCs
- Execute and manage existing NTTCs electronically
- Print NTTCs when necessary
- View your NTTC records
Electronic NTTC management through TAP provides official record-keeping. You are not required to print physical copies of NTTCs managed electronically, as the digital record maintained by the Taxation and Revenue Department is considered official and legally valid.
Paper NTTCs: Continued Validity and Application Process
While electronic NTTC management is encouraged, paper NTTCs remain a valid option. Series 1992 paper NTTCs do not expire and continue to be accepted. You can continue using your current stock of paper NTTCs or obtain new ones by completing and submitting Form ACD-31050, Application for Nontaxable Transaction Certificates (NTTC).
Applications for paper NTTCs are limited to a maximum of five certificates per application. The application form, ACD-31050, Application for Nontaxable Certificates, is readily available and provides instructions for submission.
Need Assistance? Contact the New Mexico Taxation and Revenue Department
For any questions or further clarification regarding NTTCs, the New Mexico Taxation and Revenue Department provides multiple contact avenues:
Mailing Address:
New Mexico Taxation and Revenue Department
P.O. Box 5557
Santa Fe, New Mexico 87502-5557
Local Assistance:
Contact your Local District Tax Office for 지역 specific support.
Email Inquiry:
Reach out via email at [email protected] for direct assistance with NTTC-related inquiries.
Essential Resources: Publications and Applications
- FYI 204- Nontaxable Transaction Certificates NTTCs: Comprehensive guide to NTTCs.
- ACD-31050, Application for Nontaxable Transaction Certificates (NTTC): Application form for obtaining paper NTTCs.
By understanding and correctly utilizing NTTCs, businesses in New Mexico can effectively manage their gross receipts tax obligations and ensure compliance while maximizing eligible deductions. This guide and the linked resources provide a solid foundation for navigating the NTTC system.
