N.M. Admin. Code § 3.2.201.17

Current through Register Vol. 35, No. 23, December 10, 2024

Section 3.2.201.17 - SPECIAL NONTAXABLE TRANSACTION CERTIFICATE TYPE OSB AUTHORIZED FOR CERTAIN OUT-OF-STATE BUYERS

A. Any person engaging in business in New Mexico who, within the time required by the provisions of Section 7-9-43 NMSA 1978, accepts a nontaxable transaction certificate denominated as an nttc-osb in good faith that the purchaser will, in the ordinary course of business, either resell the property purchased or incorporate the property purchased as an ingredient or component part of a manufactured product, may deduct the receipts from the sale under Section 7-9-46 or 7-9-47 NMSA 1978. A person who performs a manufacturing service in New Mexico and who, within the time required by the provisions of Section 7-9-43 NMSA 1978, accepts a nttc-osb in good faith that the purchaser is in the business of manufacturing and will have the manufacturing service performed directly upon tangible personal property the purchaser is in the business of manufacturing, or ingredient or component parts thereof, may deduct the receipts from performing the manufacturing service under Section 7-9-75 NMSA 1978.

B. A purchaser qualifies to execute an nttc-osb if the purchaser:

(1) maintains its principle place of business and commercial domicile outside New Mexico;

(2) is registered with or licensed by the state or foreign jurisdiction in which the purchaser maintains a place of business for sales or similar taxes;

(3) does not maintain a business location in New Mexico;

(4) is not subject to New Mexico gross receipts tax pursuant to Section 7-9-4 NMSA 1978 on its receipts; and

(5) is not registered as an agent to collect and pay over New Mexico compensating tax pursuant to Section 7-9-10 NMSA 1978.

C. Any person who sells tangible personal property or performs a manufacturing service, who is engaged in business in New Mexico and who is registered with the department for gross receipts tax purposes, shall be referred to in Section 3.2.201.17 NMAC as a "seller" and may apply to receive blank nttc-osb forms. The seller may then provide a qualifying purchaser with a blank nttc-osb form which the purchaser shall complete and return to the seller. The seller shall not cause or allow the reproduction of any unissued certificate and shall rely on the department as the sole source of the nttc-osb forms. The department may or may not, at the discretion of the secretary or the secretary's delegate, provide any seller with a supply of nttc-osb forms. A seller, who has received a supply of blank nttc-osb forms, shall retain a copy of each executed form and account for each nttc-osb which has been issued by the department to that seller whether or not each form has been executed by an out-of-state purchaser. If it becomes necessary to void a nttc-osb form, the word "void" shall be written boldly across the face of the form; the seller shall retain and account for the voided certificate.

D. Prior to providing the purchaser with a nttc-osb, the seller shall obtain adequate proof that the purchaser is either registered with or licensed by the appropriate taxing agency of another state or foreign jurisdiction for a sales or similar tax program. To meet this requirement the seller must obtain the purchaser's license or other identification number issued by the appropriate agency of the state or foreign jurisdiction in which the purchaser engages in business and other documentation which clearly identifies that the purchaser is engaged in business in that state. Such other documentation includes, but is not limited to, a business card, purchase order or letterhead which identifies the purchaser, the location of the business, the type of business and the business name under which the purchaser engages in business. The seller shall attach the other documentation to the seller's copy of the executed nttc-osb and retain both in the same manner used by the seller to retain other nontaxable transaction certificates provided by other customers. Proper execution of the nttc-osb shall constitute registration with the department by the purchaser as required by Section 7-9-43 NMSA 1978 and Section 3.2.201.9 NMAC. Failure of the seller to obtain from the purchaser the documentation required by the provisions of Section 3.2.201.17 NMAC shall cause a presumption of acceptance of the nttc-osb without the required good faith that the purchaser will employ the property transferred in a nontaxable manner or had the manufacturing service performed directly on tangible personal property, or ingredient or component parts thereof, that the purchaser is in the business of manufacturing. In this instance, the transaction shall be presumed to be subject to the gross receipts tax and no deduction shall be allowed. If the purchaser fails to provide all information required to be provided by the purchaser on the face of the nttc-osb or if the purchaser either fails or refuses to sign the statement contained within the nttc-osb, such nttc-osb shall not be valid and no deduction shall be allowed for the receipts from selling to that purchaser.

E. The provisions of Section 3.2.201.17 NMAC are applicable to transactions occurring on or after April 1, 1994.

N.M. Admin. Code § 3.2.201.17

10/28/94, 11/15/96, 12/15/99; 3.2.201.17 NMAC - Rn, 3 NMAC 2.43.1.17 & A, 5/31/01