When a business purchases inventory to resell, it can do so without paying gross receipts tax.  In order to do so, the retailer will need to provide a New Mexico Non-Taxable Transaction Certificate (NTTC), which is sometimes referred to as a Resale Certificate or Sales Tax Exemption Certificate, to their vendor. 

Learn more about how a New Mexico Non-Taxable Transcription Certificate works, how to get one, and more.

Related: Guide to starting a business in New Mexico

What is a New Mexico Non-Taxable Transaction Certificate?

When retailers purchase products to resell, they often don’t pay sales tax to the supplier on the purchase. The state sales tax will still be paid, but instead of the retailer paying sales tax, the retailer charges sales tax to their customer on the final value of the merchandise.

For instance, when a bookstore in New Mexico orders books to sell in their shop, by having a non-taxable transaction certificate, the bookstore owner won’t be charged state sales tax on that transaction. When a customer comes to the store to purchase a book, the bookstore will charge sales tax to the final user based on the full price of the book.

The bookstore gathers the sales tax from all its transactions and, typically once a month, sends the accumulated sales taxes to the New Mexico Taxation & Revenue Department.

The sales tax exemption is only intended for inventory that will be resold and is not intended for the tax-free purchase of items used in normal business operations, such as paper, pens, etc.

How to fill out the New Mexico NTTC (Form ACD-31050)

Before a business starts to sell products or provide taxable services, it must first register for a New Mexico CRS Identification Number (sometimes called a sales tax permit) from the New Mexico Taxation and Revenue Department. After receiving the number, the NTTC can be filled out and used with vendors to purchase tax-free.

Step 1: Begin by downloading the New Mexico Non-Taxable Transaction Certificate Form ACD-31050 or logging into the New Mexico Taxation & Revenue website and completing an electronic certificate. 

Step 2: Identify the name, business address, and phone number of the buyer

Step 3: Enter the New Mexico CRS Identification Number of the buyer

Step 4: Choose the type of NTTC

• Type 2: for tangibles for resale, lease, or re-lease, or for purchase by the manufacturer
• Type 5: for services for resale, for export, or for services performed on manufactured products
• Type 6: for the construction contractor’s purchase of construction materials, construction services, construction-related services, or for the lease of construction equipment
• Type 9: for purchase of tangible personal property by New Mexico or United States governments, 501(c)(3) organization, or credit unions
• Type 10: for purchase or lease of tangible personal property or services by a person who holds an interest in a qualified generating facility
• Type 11: for purchase of tangible personal property that is consumed in the manufacturing process
• Type 12: for purchase of utilities that are consumed in the manufacturing process
• Type 15: for tangible personal property purchased by qualified federal contractors
• Type 16: for sales of property, services, and leases to qualified film production companies, accredited foreign missions, and their accredited members

Step 5 – Indicate the number of certificates being requested.  The Department will only issue a maximum of 5 NTTCs to be used at a later date.

Step 6 – The purchaser will print and sign the certificate. 

ACD-31050 Non-Taxable Transaction Certificate Form

New Mexico Non-Taxable Transaction Certificate FAQs