The state of New Mexico does not have a simplified sales tax (SST). States, local governments, and companies collaborated to create the Streamlined Sales Tax Agreement in order to streamline and modernize the collection and administration of sales and use taxes. The SST program’s objective is to lessen the cost of tax compliance on businesses and simplify the collection and remittance of sales tax.
A tax known as the Gross Receipts Tax (GRT), which is comparable to a sales tax, does exist in New Mexico. The GRT, which is deducted from a company’s gross receipts, is a tax on the right to conduct business in the state. The GRT is imposed on the seller rather than the buyer, unlike a sales tax. The GRT rate varies according to the business’s location and the nature of the products or services it offers.
A resale certificate can be required if you are a business in New Mexico. If a firm intends to resell the goods or services they purchase, they can use a resale certificate to purchase them tax-free. You must submit an application to the New Mexico Taxation and Revenue Department (TRD) in order to receive a resale certificate there.
In New Mexico, resale certificates are good for four years after the date of issuance. The buyer must pay the GRT on the purchase price if the certificate is used to make a tax-free transaction and the products or services are not resold.
The TRD website has Form ACD-31015, which you can use to apply for a resale certificate in New Mexico. Along with your business name, address, and tax ID number, you must also list the products or services you intend to resell. A copy of your New Mexico business registration as well as any further relevant papers must be provided.
In conclusion, even though New Mexico does not have a sales tax, it does have a general sales tax (GRT). To buy products or services tax-free for resale in New Mexico, businesses might need to obtain a resale certificate. Businesses must apply to the TRD for a resale certificate, which is good for four years from the date of issuance in New Mexico.
Non-Taxable Transaction Certificate is referred to as NTTC. A buyer can purchase tangible personal property or services without paying state gross receipts tax with the help of a certificate provided by the New Mexico Taxation and Revenue Department. When a buyer is buying goods or services for resale or as part of their own business activities, the NTTC is often utilized in business-to-business transactions.