New Mexico businesses need to navigate various tax regulations, and Non-Taxable Transaction Certificates (NTTCs) are a crucial aspect of the state’s gross receipts tax system. This guide provides essential information about NTTCs, explaining their purpose, who needs them, and how to obtain and use them effectively. NTTCs are specifically relevant to New Mexico gross receipts tax deductions, offering a formal way for certain transactions to be exempt from tax. This article will explore the details of NTTCs to help businesses in New Mexico comply with tax laws and manage their financial operations efficiently.
NTTCs: Key Information for Businesses
The New Mexico Taxation and Revenue Department (TRD) categorizes NTTCs by type, with each type corresponding to specific tax deductions. For a detailed understanding of NTTC types, it’s recommended to consult FYI-204: Nontaxable Transaction Certificates (NTTCs) or Form ACD-31050, Application for Nontaxable Transaction Certificates (NTTC).. These official resources offer comprehensive explanations and are vital for businesses seeking to utilize NTTCs.
NTTCs for Sellers and Lessors: Deducting Gross Receipts Tax
In New Mexico, sellers and lessors bear the legal responsibility for gross receipts tax. While they have the option to charge this tax to customers, NTTCs offer a mechanism to deduct receipts from qualified transactions. If you are a seller or lessor, obtaining an NTTC from the Taxation and Revenue Department enables you to legally deduct receipts from your gross income for eligible transactions.
Importantly, a seller or lessor only needs to secure a single NTTC from a customer to cover all transactions of the same type with that customer. When a customer provides a properly executed NTTC, the seller or lessor should not apply gross receipts tax to qualifying transactions with that customer.
NTTCs serve as conclusive evidence that transaction proceeds are deductible, provided the seller accepts a correctly executed certificate in good faith from the purchaser. However, it’s also important to note that for many deductions under the Gross Receipts and Compensating Tax Act, alternative documentation can be accepted instead of an NTTC, as outlined in Section 7-9-43 NMSA 1978. The exception to this is for deductions under Section 7-9-46 NMSA 1978, which specifically require a Type 11 or Type 12 NTTC.
Special Note on Type 6 NTTC: A Type 6 NTTC often requires contractor license verification. It’s crucial to be aware that as of April 1, 2016, the Construction Industries Division (CID) of the Regulation and Licensing Department no longer mandates licenses for certain classifications including GS-3 tile, GS-10 fencing, and others. For applicants in these categories seeking a Type 6 NTTC, they can apply through the Taxpayer Access Point portal https://tap.state.nm.us or contact the department at [email protected] for application assistance.
NTTCs for Resellers: Tax Exemption on Purchases
Resellers in New Mexico can also benefit from NTTCs. By using NTTCs, resellers may be exempt from paying gross receipts taxes on qualified purchases. After registering with the Taxation and Revenue Department and obtaining a New Mexico Business Tax Identification Number (NMBTIN), resellers can apply for and obtain NTTCs online through the Taxpayer Access Point (TAP).
It’s critical to understand that resale certificates from other states are not valid in New Mexico. However, for customers not required to register with New Mexico Taxation and Revenue, alternatives to a Type 2 NTTC may be acceptable. These include the Multijurisdictional Sales and Use Tax certificate issued by the Multistate Tax Commission, or a Border States Uniform Sale for Resale certificate. Further details on these alternatives are available in FYI-204: Nontaxable Transaction Certificates (NTTC’s).
Applying for and Executing NTTCs Online via Taxpayer Access Point (TAP)
The Taxpayer Access Point (TAP) is a convenient online system for managing NTTCs. Buyers or lessees holding a valid New Mexico Business Tax Identification Number (NMBTIN) can utilize TAP to obtain, execute, print, and view their New Mexico NTTCs electronically through Taxpayer Access Point.
A significant advantage of using TAP is that there is no need to print paper copies of electronically managed NTTCs. The electronic record maintained within the Taxation and Revenue Department system is considered an official and valid record of NTTC execution.
Utilizing Paper NTTCs
While electronic NTTC management is efficient, paper NTTCs are also a valid option. New Mexico law removed the expiration date for Series 1992 paper NTTCs, meaning all executed Series 1992 NTTCs remain valid indefinitely. Businesses can continue to use their existing supplies of paper NTTCs or obtain new ones by completing and submitting Form ACD-31050, Application for Nontaxable Transaction Certificates (NTTC)..
It’s important to note that applications for paper NTTCs are limited to a maximum of five certificates per application. The application form, ACD-31050, Application for Nontaxable Certificates, is available for download and completion.
Contact Information and Further Assistance
For any inquiries or further assistance regarding Non-Taxable Transaction Certificates, you can reach out to the New Mexico Taxation and Revenue Department through the following channels:
New Mexico Taxation and Revenue Department
P.O. Box 5557
Santa Fe, New Mexico 87502-5557
You can also visit your Local District Tax Office for in-person assistance.
For email inquiries, contact: [email protected]
Publications and Applications
For detailed information and application forms, refer to these resources:
