New Mexico Resale Certificate (NTTC Type 2): How to Get, Use, and Accept One
New Mexico Resale Certificate (NTTC Type 2): How to Get, Use, and Accept One
TL;DR
For tangible goods or licenses bought for resale, obtain a Type 2 NTTC through TAP and execute one to each seller. One certificate covers repeat purchases of the same type. Paper certificates from the 1992 series onward have no expiration date. Qualifying out-of-state buyers may use an NTTC-OSB or an accepted multistate form.
New Mexico taxes the seller’s gross receipts. An NTTC supports the seller’s deduction for a qualifying sale. It does not exempt the buyer’s purchase from a sales tax.
New Mexico resale certificate: how the NTTC supports a gross receipts tax deduction
New Mexico imposes gross receipts tax (GRT) on a seller’s taxable receipts. When a sale qualifies for a resale deduction, the seller can subtract that receipt from the amount subject to GRT if the seller has the required documentation. In a typical sales-tax state, a resale certificate instead tells the seller not to collect sales tax on a qualifying purchase.
New Mexico calls the document a nontaxable transaction certificate, or NTTC. A buyer purchasing goods for resale provides the applicable NTTC to the seller, who uses it to support the deduction. The resale classification is one of several NTTC types. Calling the document a “New Mexico resale certificate” can help you search for it, but you must use the NTTC type that fits the transaction. An NTTC does not make a purchase deductible merely because the buyer presents one.
Who needs an NTTC and when it applies
A New Mexico buyer uses a Type 2 nontaxable transaction certificate (NTTC) for qualifying purchases of tangible personal property or licenses for resale in the ordinary course of business under Section 7-9-47 NMSA 1978. Type 2 also covers a manufacturer's qualifying purchases of ingredients or components. For services bought for resale, use Type 5 instead. New Mexico buyers must register with the Taxation and Revenue Department (TRD) and obtain a New Mexico Business Tax Identification Number (NMBTIN) before obtaining an NTTC.
A seller uses the applicable NTTC to support a deduction from gross receipts when the sale qualifies. The buyer should give the seller the certificate, and the seller should confirm that it covers the transaction before claiming the deduction.
An out-of-state buyer who is not required to register with TRD may qualify to use a Multistate Tax Commission multijurisdiction certificate or Border States Uniform Sale for Resale certificate instead of a Type 2 NTTC, as TRD explains in its NTTC guidance. A resale certificate issued by another state on its own is not valid in New Mexico. Another route is the Type OSB certificate. The New Mexico seller applies for it on Form ACD-31050 and gives it to an eligible out-of-state buyer purchasing tangible personal property for resale or as a manufacturing ingredient. The buyer must be based and registered outside New Mexico, without a New Mexico business location or receipts, and the seller must keep proof of that registration.
Buyer steps: obtaining and delivering an NTTC
Confirm eligibility. Use a Type 2 NTTC for qualifying tangible personal property or licenses bought for resale in the ordinary course of business, or for qualifying manufacturing ingredients or components. Use Type 5 for services bought for resale. Register with TRD and obtain an NMBTIN before requesting a New Mexico NTTC. If you are not required to register in New Mexico, use the applicable out-of-state documentation route.
Obtain and execute Type 2. After registering for an NMBTIN, request Type 2 certificates through the Taxpayer Access Point (TAP). TAP issues electronic certificates immediately. To obtain paper certificates instead, submit Form ACD-31050 to TRD. Each paper application can request up to five certificates.
Execute the certificate to the seller. Provide one Type 2 NTTC to each seller for qualifying purchases. That NTTC covers subsequent transactions of the same type with the same seller. Keep your purchase records and a copy of any paper certificate. NTTCs executed in TAP appear in both your account and the seller’s.
If you later use or consume goods you bought for resale, the original resale purpose no longer describes those goods. Identify the affected purchases and check TRD’s current guidance for the tax and reporting procedure that applies. Do not assume that issuing the NTTC settles your obligation when your use of the goods changes.
Seller steps: accepting and verifying an NTTC
Before claiming a gross receipts tax deduction, match the buyer’s NTTC to the sale. Check the buyer and seller identities, the certificate number, and the NTTC type against the invoice and the goods sold. Review the execution details required on TRD’s current form. A certificate for a different transaction type does not establish a resale deduction.
Sellers can verify a buyer's NTTC in TAP before taking the deduction. An NTTC executed electronically appears in both buyer and seller TAP accounts. Paper NTTCs from the 1992 series onward do not expire, but a certificate cannot support transactions after the buyer's gross receipts tax account closes. A seller that accepts a properly executed NTTC on time and in good faith that the buyer will use the goods in a nontaxable way is protected: under NMSA 7-9-43(A), the certificate is conclusive evidence that the receipts are deductible.
Keep the NTTC with the invoices and other records supporting the deducted receipts. New Mexico sets no fixed retention period, but TRD can generally assess tax for three years from the end of the year the tax was due, and up to six years if receipts were underreported by 25% or more. Keep NTTCs for at least that long, and as long as you keep selling to the buyer, since one certificate covers all later purchases. If a certificate is incomplete or its details conflict with the sale, ask the buyer for corrected documentation. Do not claim the deduction unless you can support it under TRD’s rules.
Buyer and seller checklist
Buyer actions
Confirm your NMBTIN and eligibility to use a Type 2 NTTC.
Complete the NTTC and give it to the seller for a qualifying purchase.
Keep a copy with your purchase records for the applicable recordkeeping period.
Seller actions
Collect the buyer’s completed NTTC before relying on a gross receipts tax deduction.
Check that the certificate covers the transaction and has no missing or invalid details.
Keep the certificate with your sales records for the applicable recordkeeping period.
When NTTC errors create tax exposure
A missing or invalid NTTC can leave a seller owing gross receipts tax on a sale the seller deducted. Before relying on the deduction, the seller should resolve certificate gaps and keep the documentation that supports the transaction. If an earlier deduction lacks support, the seller may need to address tax from a prior period.
A buyer who uses or consumes goods purchased for resale may also face tax liability because the goods were not resold. The buyer should identify those purchases and confirm the reporting treatment with the New Mexico Taxation and Revenue Department.
Taxwire can review certificate gaps and run voluntary disclosure agreements when a review identifies prior-period uncollected tax.
FAQs
Do New Mexico NTTCs expire or require renewal? Paper NTTCs from the 1992 series onward have no expiration date. An NTTC cannot support transactions after the buyer closes its gross receipts tax account.
Can one NTTC cover multiple purchases? Yes. One NTTC covers all transactions of the same type between the same buyer and seller.
What if a buyer cannot provide an NTTC at the time of sale? Do not take the deduction without an NTTC or other evidence TRD accepts for that deduction. Get the NTTC as soon as possible. If TRD audits you and sends a notice requiring the certificates, you have 60 days to produce them or the deduction can be denied. In limited cases TRD may accept other evidence to support a resale deduction, but don’t rely on that as a plan.
Conclusion
New Mexico’s NTTC supports a seller’s gross receipts tax deduction for a qualifying transaction. It does not give the buyer a general sales tax exemption. Buyers and sellers should treat the certificate as documentation for the seller’s specific deduction, not as permission to leave tax off any purchase.