If you run an Ecommerce or CPG business in New Mexico, securing a New Mexico Resale Certificate is a smart move to protect your margins and streamline operations.
This certificate lets you buy inventory and raw materials tax-free. It helps lower upfront costs, keep your prices competitive, and stay compliant with New Mexico Gross Receipts Tax laws.
Understanding Resale Certificates in New Mexico
What is a New Mexico Resale Certificate?
In New Mexico, the state refers to a resale certificate as a Nontaxable Transaction Certificate (NTTC). The New Mexico Taxation and Revenue Department (TRD) issues the NTTC to:
- Purchase goods without their supplier incurring gross receipts tax on the sale, provided these goods are intended for resale to their customers in the normal course of their business.
- Claim deductions from gross receipts when buyers present a valid NTTC to their suppliers for qualifying transactions.
The NTTC helps prevent double taxation. It removes tax at both the wholesale and retail stages of the transaction. However, businesses must still collect gross receipts tax from customers when required.
Why do you need a New Mexico Resale Certificate?
Obtaining a resale certificate in New Mexico offers several significant advantages for businesses that purchase goods for resale.
Here are some key benefits:
- Avoid Paying Sales Tax on Inventory: The most direct benefit is purchasing inventory and materials that will be resold to customers without paying New Mexico’s sales tax upfront.
- Maintain Competitive Pricing: By not paying sales tax on the cost of goods, businesses have more flexibility in setting competitive prices for products in the New Mexico market. This can be a crucial advantage, especially in price-sensitive industries.
- Legal Compliance: Possessing and using a valid resale certificate for eligible purchases ensures that businesses comply with New Mexico’s sales tax laws and regulations, thereby avoiding penalties.
In New Mexico, the required resale certificate is the Nontaxable Transaction Certificate (NTTC). When completing an application for an NTTC (Form ACD-31050), the buyer must include their CRS or NM Tax ID to show they are registered with the TRD. You can access the official application form here: Form ACD-31050 – Application for NTTC.
Resale Certificate vs. Sales Tax Permit: What’s the Difference?
A New Mexico Sales Tax Permit (also called a CRS number or NM Tax ID) allows your business to collect and remit gross receipts tax on sales made to customers.
A New Mexico Resale Certificate (NTTC), in contrast, the NTTC lets you purchase goods tax-free from suppliers if those items are intended for resale.
To issue or use an NTTC, your business must first be registered with the state and hold an active New Mexico sales tax permit.
Who Can Use a Resale Certificate in New Mexico?
Businesses that purchase goods for resale can use a New Mexico Resale Certificate, formally known as a Nontaxable Transaction Certificate (NTTC). The requirements to use one vary depending on whether the business is located in New Mexico or out-of-state.
To issue and use an NTTC, a business must be actively engaged in reselling taxable tangible goods and must hold a valid New Mexico Sales Tax Permit (CRS Number).
Once registered, the business can obtain NTTCs through the Taxpayer Access Point (TAP) or by submitting Form ACD-31050 for paper certificates. These NTTCs are then presented to vendors to make qualified tax-exempt purchases.
For Out-of-State Businesses: Out-of-state businesses that buy from New Mexico suppliers for resale outside the state may still qualify for a resale exemption. This applies even if they’re not required to register with the TRD. In such cases, one of the following may apply:
- The buyer may provide the Multistate Tax Commission’s Uniform Sales & Use Tax Certificate, if accepted by the vendor.
- The buyer may use the Border States Uniform Sale for Resale Certificate (Form 60-008.1). It is valid for purchases by businesses in AZ, CA, OK, TX, UT, and Mexico under qualifying conditions.
- Alternatively, the seller may issue a Type OSB NTTC to the out-of-state buyer through the TAP portal, specifically for transactions involving tangible goods transported outside of New Mexico.
How to Get a Resale Certificate in New Mexico: A Step-by-Step Guide
Getting a resale certificate in New Mexico is simple, but you’ll need to meet a few key requirements first. Here’s how to do it:
1. Make Sure You’re Eligible
Your business must be engaged in selling taxable goods or services in New Mexico and be registered with the New Mexico Taxation and Revenue Department (TRD). Only businesses that hold an active New Mexico Sales Tax Permit can apply for and use a Nontaxable Transaction Certificate (NTTC).
2. Get a New Mexico Sales Tax Permit
If you don’t already have one, apply for a New Mexico Sales Tax Permit through the Taxpayer Access Point (TAP). You’ll need this permit before you can apply for or use a Nontaxable Transaction Certificate (NTTC).
Need help? Read our blog: How to Get a Seller’s Permit in New Mexico
3. Gather Your Business Information: You’ll need basic business details to complete the resale certificate, including:
- Business Identification Information: Legal Business Name, Physical Address, Mailing Address
- Business Entity Structure (i.e., Sole Proprietorship, Partnership, Subchapter S Corp., Corporation, LLC, etc.)
- Federal Employer Identification Number (EIN or FEIN)
- Name, Address, and SSN of Owners, Partners, or Officers
- Business Activity Details: Date & State of Incorporation
- Copy of your IRS Notice Letter CP 575/EIN Confirmation Letter
- NAICS Code
4. Complete Form ACD-31050
Download and fill out Form ACD-31050, Application for Nontaxable Transaction Certificates (NTTC), available on the TRD website or directly through TAP. This form allows you to request paper NTTCs for resale purchases.
You’ll present these NTTCs to suppliers when making tax-exempt purchases of qualifying items. You can also apply for and manage NTTCs electronically through the TAP portal without needing to print them.
5. Submission
Once you get your NTTCs, either paper or through TAP, you must give them to suppliers when making tax-exempt purchases. If you’re using paper NTTCs, you might need to report the executed NTTC to the TRD by submitting a Nontaxable Transaction Certificate Report (Form ACD-31098) or by logging the execution online through TAP.
If you’re using NTTC-NET, New Mexico’s electronic NTTC system, the system automatically records NTTC executions. By completing them online, it eliminates the need for additional paperwork.
6. Pay Any Applicable Fees
The New Mexico Sales Tax Permit is issued free of charge. There are no state-level fees associated with obtaining this permit.
7. Understanding Validity and Compliance
Your NTTCs stay valid as long as your New Mexico Sales Tax Permit remains active and compliant (CRS Number) with the TRD. While NTTCs, whether issued electronically or as 1992 Series paper certificates, typically do not have a printed expiration date.
Your ability to make tax-exempt purchases depends entirely on keeping your tax registration in good standing. Suppliers must accept valid NTTCs in good faith. They can verify the buyer’s CRS number using the TAP verification tool.
How to Use a Resale Certificate in New Mexico
To properly use a resale certificate in New Mexico, you must present a valid Nontaxable Transaction Certificate (NTTC) to your supplier at the time of purchase. NTTCs can be managed electronically through the Taxpayer Access Point (TAP) or issued in paper form using Form ACD-31050.
New Mexico’s deduction resale exemption system is unique: the state generally does not broadly accept resale certificates issued by other states as a substitute for an NTTC.
However, there are a few exceptions that allow certain multi-jurisdictional certificates to be used under specific conditions.
Here’s what sellers and buyers need to know:
- NTTC Required: For most resale transactions, by New Mexico-registered buyers, the buyer must provide a valid NTTC to the seller. This document allows the seller to deduct the transaction from gross receipts tax.
- Out-of-State Buyers: If you’re an out-of-state buyer purchasing goods from a New Mexico vendor and are not required to register with the state, you may be able to use an approved multi-jurisdictional form if the vendor agrees to accept it and all requirements are met. Acceptable alternatives include the Multistate Tax Commission’s Uniform Sales & Use Tax Certificate or the Border States Uniform Sales for Resale Certificate (Form 60-008.1), which applies to buyers based in border states such as AZ, CA, OK, TX, UT, and Mexico.
- Vendor Responsibility: Sellers must ensure they receive a properly completed NTTC or accepted alternative documentation before excluding gross receipts tax from the sale. Failure to do so could result in liability during an audit.
For more details or to manage NTTCs electronically, visit the official TAP portal: https://tap.state.nm.us.
Multi-Jurisdictional Resale Certificates
A multi-jurisdictional resale certificate is a standardized form to simplify tax-exempt purchases for businesses that operate and make purchases for resale across state lines.
Unlike a standard resale certificate issued by a single state, a multi-jurisdictional certificate aims to be recognized and accepted by multiple states as valid proof that the goods being purchased are intended for resale and are therefore exempt from sales tax at the time of purchase.
However, it’s crucial to understand that not all states accept these multi-state forms, and acceptance can come with specific conditions.
- Uniform Sales & Use Tax Resale Certificate – Multijurisdiction Form: Issued by the Multistate Tax Commission, some New Mexico vendors may accept this certificate, but only for tangible personal property intended for resale or incorporation into a manufactured product for resale. It is generally not accepted for the purchase of taxable services for resale, which typically require a New Mexico NTTC.
- Border States Uniform Sale for Resale Certificate (Form 60-008.1): This certificate is intended for buyers in Arizona, California, Oklahoma, Texas, Utah, or Mexico who purchase goods for resale and have them shipped out of New Mexico. Vendors can accept this form instead of an NTTC if the transaction qualifies those border-state criteria and the property will be transported across state or national boundaries for resale.
- Streamlined Sales Tax (SST) Certificate of Exemption: While New Mexico is not a member of the Streamlined Sales Tax (SST) Agreement, some sellers may decide to accept this form at their own discretion. However, it is not officially recognized as a substitute for a valid NTTC, and sellers bear the risk during audits if they rely solely on this document.
Businesses need to verify whether New Mexico accepts these multi-jurisdictional certificates and if there are any specific requirements or limitations on their use within the state. This is to avoid any audit issues.
Responsibilities When Using or Accepting a New Mexico Resale Certificate
Buyer Responsibilities
Using or accepting a New Mexico resale certificate, formally known as a Nontaxable Transaction Certificate (NTTC), buyers and sellers each carry specific legal responsibilities when using or accepting an NTTC.. Misuse can result in penalties, back taxes, or audit exposure for both parties. Here’s what buyers and sellers need to know.
- New Mexico-based buyers: If your business is registered in New Mexico and holds an active CRS number (New Mexico Business Tax ID), you must obtain the appropriate NTTC type (e.g., Type 2 for tangible personal property for resale) for your specific resale activity. These are categorized by transaction type, and you must apply for the correct one via the Taxpayer Access Point (TAP) or using Form ACD-31050. You only need one NTTC per seller for all qualifying transactions of the same type, but you must ensure it’s properly executed and recorded (if a paper NTTC) before claiming any deductions.
- Out-of-state buyers: If you’re not registered in New Mexico, you cannot obtain a standard NTTC from the state as a New Mexico-registered business. However, you may be able to use a Multistate Tax Commission Uniform Sales & Use Tax Certificate or the Border States Certificate for certain resale transactions, provided the New Mexico vendor accepts it and the transaction meets New Mexico’s statutory requirements for such certificates. You are responsible for making sure the documentation is accurate and presented at the time of purchase. These forms are only valid for tangible goods, not for taxable services in New Mexico.
Seller Responsibilities
If you are a seller in New Mexico accepting a resale certificate (NTTC or approved alternative), you are legally responsible for ensuring the documentation is valid and retained for audit protection. Here’s what you must do:
- Accept the certificate in good faith
- Ensure it includes all required information: buyer’s name, address, sales tax permit number (or equivalent), reason for exemption, and signature
- Reject the certificate if the items aren’t for resale (e.g., personal or business use)
- Keep records for at least 4 years: The standard audit window for Gross Receipts Tax in New Mexico is three years. But the TRD can extend it up to ten years for non-filing, fraud, or major underreporting. For this reason, it is best practice to retain all resale documentation, including NTTCs and acceptable alternative exemption forms for at least four years. This retention period aligns with common industry standards and helps protect your business in the event of an extended audit or retroactive tax assessment.
Frequently Asked Questions About the New Mexico Resale Certificate
Are There Penalties for Misusing a New Mexico Resale Certificate?
Yes. Misusing a resale certificate, formally referred to as a Nontaxable Transaction Certificate (NTTC), can lead to serious penalties. Using an NTTC to avoid tax on personal or business-use purchases (such as office equipment) is illegal.
Penalties vary based on the nature of the violation and may include fines, back taxes, and interest. According to the New Mexico Taxation and Revenue Department, submitting false information or improperly claiming a deduction may also subject the taxpayer to additional assessments or legal action.
Always use NTTCs only for qualified resale transactions, and ensure the form is properly executed and documented.
Does a New Mexico Resale Certificate Expire?
New Mexico’s paper resale certificates (NTTCs from the 1992 Series) do not have an expiration date. Once executed, these certificates remain valid as long as the buyer’s New Mexico Sales Tax Permit (CRS number) remains active.
For electronic NTTCs issued through the Taxpayer Access Point (TAP), electronic NTTCs also remain valid only while your tax registration is active. If the sales tax permit becomes inactive, revoked, or cancelled, the NTTC is no longer valid, even if it appears complete and accurate on paper.
How Do I Verify a Resale Certificate in New Mexico?
If you’re a seller in New Mexico, it’s your responsibility to verify the resale certificate before excluding gross receipts tax from the transaction. Here’s how:
If you’re a seller in New Mexico, here’s how to validate a buyer’s resale certificate:
- Step 1: Request a completed NTTC or multistate certificate from the buyer.
- Step 2: Locate the buyer’s New Mexico CRS number on the form (this is their state-issued business tax ID).
- Step 3: Visit the official Taxpayer Access Point (TAP) and use the “Check CRS Status” tool to confirm whether the permit is active.
How TaxHero Can Help
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